Disliked{quote} It all depends on your risk tolerance, personally to me not matter if it goes to $6k or $8k or $10k because its still a small amount of my overall investment potential. If you have a total of $10,000 to trade with then its a different story, lot size should only be 5-10k lots, so 3000 pips is $1500-$3000 or less. Not take years because average month pips is 2200 so return to equity high is short time. The crucial equation is average month pips/expected worst drawdown as this defines how long to return to equity high. If a system only return...Ignored
$10,000 Profit a Month Personal Challenge
{quote} It all depends on your risk tolerance, personally to me not matter if it goes to $6k or $8k or $10k because its still a small amount of my overall investment potential. If you have a total of $10,000 to trade with then its a different story, lot size should only be 5-10k lots, so 3000 pips is $1500-$3000 or less. Not take years because average month pips is 2200 so return to equity high is short time. The crucial equation is average month pips/expected worst drawdown as this defines how long to return to equity high. If a system only return...
The age old problem of DD still remains then! I was hoping you had made a breakthrough
What happens if it goes to beyond -10k or even -20k. You must have some 'pull the plug' value.
No one like accepting a loss, but the problem risks getting bigger and bigger. The capital backing the 'right' position is not the issue. Even LTCM proved that to themselves.
I understand that the larger the 'Emergency Close DD', the less likely it will be called in.
My experience is that it usually only delays the ultimate pain, because when it does occur, (and it will), the pain is greater. The Principle of 'Conservation of Pain'.
Most people focus on how to win a trade. Perhaps their focus should be on handling the DD (Small and often, or larger and less often) that definitely will challenge their system, and maybe themselves also.
Getting a handle on possibility of DD (by backtesting) is useful to some extent. Statistics are a great thing, but because we are dealing with 'as good as random' movements, especially on the lower TFs they are determined more by luck than 'skill' at entry. The large gray duck may hit 2 or even 3 times in quick succession!!
Mind you, with some common sense input, you can stretch out the lucky period - just not forever.
I find the main concept to grasp is not to confuse 'skill' and 'luck'. You are probably well aware of that. Not sure all readers here are. Maybe too much money?
Just my take on the DD problem.
You probably have the best path to the future with managing other peoples money. They take the risk. You take the profit. Might try it myself. Got a couple of EAs which make profit (most of the time)! Just got to talk with PT Barnam.
By the way, thanks for the demo EA you sent. I assume part of your grand plan is to 'negotiate' a live account version? You have collected my email address, so will wait and see what happens next!! I will not bother testing it.
Good luck and may your 'skill' continue.
harry
{quote} Dax, thanks for the clarification. The age old problem of DD still remains then! I was hoping you had made a breakthrough
TBH its not in nature of system to have continued and continued losses because using partial hedging so always have win positions in any case. I have over 2 years real trading on system, so have good idea of DD expectation. Yes, it can exceed, but this is the risk i am willing to take to get the gains.
If client wants no risk, then no problem, Bank of America offering 1.5% interest per annum.
{quote} Dax, thanks for the clarification. The age old problem of DD still remains then! I was hoping you had made a breakthrough
http://www.leaprate.com/2017/01/odey...es-50-in-2016/
- #192
- Edited Jan 7, 2017 1:34am Jan 6, 2017 8:13pm | Edited Jan 7, 2017 1:34am
- Joined May 2011 | Status: Trader | 594 Posts
Good to see a positive thread demonstrating that one can make consistent profits in fx. Not easy but possible. 
I've decided to finally add my trade explorer, just to show it's possible to make consistent profits (after years of losing first!).
I've decided to finally add my trade explorer, just to show it's possible to make consistent profits (after years of losing first!).
- #195
- Jan 7, 2017 1:09pm Jan 7, 2017 1:09pm
- Joined Dec 2015 | Status: Suuka Maadik | 3,630 Posts
Maadik Hugiis. IQ 69.
- #197
- Jan 7, 2017 1:50pm Jan 7, 2017 1:50pm
- Joined Dec 2015 | Status: Suuka Maadik | 3,630 Posts
Maadik Hugiis. IQ 69.
- #199
- Jan 7, 2017 2:15pm Jan 7, 2017 2:15pm
- | Commercial User | Joined Aug 2014 | 3,922 Posts
there is always, always another trade!!
- #200
- Jan 7, 2017 2:16pm Jan 7, 2017 2:16pm
- Joined Dec 2015 | Status: Suuka Maadik | 3,630 Posts
Maadik Hugiis. IQ 69.