Your largest drawdown

momothebored

Active member
139 1
Like a little over $500. There's no excuse for having large drawdowns.

I was thinking more in terms of % of AUM.

Why do you say that though?
Things like slippage, nasty surprises, bad streaks of luck etc..

even with careful management a bad run of luck can ruin people.
 

drtro

Active member
216 21
I was thinking more in terms of % of AUM.

Why do you say that though?
Things like slippage, nasty surprises, bad streaks of luck etc..

even with careful management a bad run of luck can ruin people.

If you have a bad run, then you aren't using careful risk management.

Biggest loss i had was I think $580 something to be exact. I've since come up with a risk management plan, and the most I lost in a day now is maybe $250.
 

momothebored

Active member
139 1
If you have a bad run, then you aren't using careful risk management.

Biggest loss i had was I think $580 something to be exact. I've since come up with a risk management plan, and the most I lost in a day now is maybe $250.


Going by your logic, no professional trader would ever go out of business.
No fund would ever close shop.

It's taken for granted even basic retail traders would have a semblance of a risk management plan.

How does that stop the inherent failure rate from compounding in a bad run?

e.g. You use risk 2% account equity per trade and your setup has a 60% probability of success.

Losing 5 in a row when your setup hits a bad run still results in a ((1.02)^5 -1) % loss in account equity in a perfect world with no brokerage costs and zero slippage.

I have no idea what you're talking about.


If you never had a bad run, you wouldn't be trading hundreds of dollars either. :cheesy:
 

drtro

Active member
216 21
Going by your logic, no professional trader would ever go out of business.
No fund would ever close shop.

It's taken for granted even basic retail traders would have a semblance of a risk management plan.

How does that stop the inherent failure rate from compounding in a bad run?

e.g. You use risk 2% account equity per trade and your setup has a 60% probability of success.

Losing 5 in a row when your setup hits a bad run still results in a ((1.02)^5 -1) % loss in account equity in a perfect world with no brokerage costs and zero slippage.

I have no idea what you're talking about.


If you never had a bad run, you wouldn't be trading hundreds of dollars either. :cheesy:

Those people just didn't hold up on their end. You can make excuses for everything, like every other 99%er does.
 

momothebored

Active member
139 1
Those people just didn't hold up on their end. You can make excuses for everything, like every other 99%er does.

Oh that's right, do excuse me top 1% trader that has never had a bad run.

I like how your magic risk management system allows you to circumvent the laws of basic statistics.

My, my, and here you are risking a few hundred dollars a trade with such a wonderful weapon? :LOL:

Shame on all those hedge funds and IBs you're obviously better than. :cheesy:
 

drtro

Active member
216 21
Oh that's right, do excuse me top 1% trader that has never had a bad run.

I like how your magic risk management system allows you to circumvent the laws of basic statistics.

My, my, and here you are risking a few hundred dollars a trade with such a wonderful weapon? :LOL:

Shame on all those hedge funds and IBs you're obviously better than. :cheesy:

That's the problem people have. Trading isn't statistics. There's no law of "statistics" that says a Quarterback can never throw a 100% game. You live by the average expectation, you will never be more than average. Make excuses for failure and move on. The American way
 

momothebored

Active member
139 1
That's the problem people have. Trading isn't statistics. There's no law of "statistics" that says a Quarterback can never throw a 100% game. You live by the average expectation, you will never be more than average. Make excuses for failure and move on. The American way


Let me know after you've made your 1st trillion dollars with your 100% game.


Like i said, i have no idea what you're talking about, but i AM sure you don't either. :D


Trading is nothing but applied statistics and probability whether you're looking at it from a technical, quant, fundamental or macro perspective.

Seriously, don't forget to PM when you hit your 1st trillion.
 

drtro

Active member
216 21
Let me know after you've made your 1st trillion dollars with your 100% game.


Like i said, i have no idea what you're talking about, but i AM sure you don't either. :D


Trading is nothing but applied statistics and probability whether you're looking at it from a technical, quant, fundamental or macro perspective.

Seriously, don't forget to PM when you hit your 1st trillion.

You're confusing consistently and actually following a risk management plan to being 100%. There's no holy grail, but that doesn't mean you can just excuse everything you planned because of "slippage" or "commissions!"
 

momothebored

Active member
139 1
You're confusing consistently and actually following a risk management plan to being 100%. There's no holy grail, but that doesn't mean you can just excuse everything you planned because of "slippage" or "commissions!"



1. You brought up your silly analogy of a 100% game

2. How on EARTH did you get the idea i'm excusing everything i planned because of "slippage" or "commissions"?

Re-read, slowly this time.

3. Like i said, since you can avoid having any serious draw-downs of any kind, let me know when you've made your $1 trillion. You'd have to be the best in the world, easily :D Just a matter of time before you hit the $1T with no serious drawdowns in your path
 

drtro

Active member
216 21
1. You brought up your silly analogy of a 100% game

2. How on EARTH did you get the idea i'm excusing everything i planned because of "slippage" or "commissions"?

Re-read, slowly this time.

3. Like i said, since you can avoid having any serious draw-downs of any kind, let me know when you've made your $1 trillion. You'd have to be the best in the world, easily :D Just a matter of time before you hit the $1T with no serious drawdowns in your path

You're dancing around the fire my friend. Nothing you're saying is relevant.

Statistics is useless. It's just a theory. Something being executed purely statistically is useless because nobody knows the accuracy of statistics. People like to use statistics to make important decisions. Statistics can be used as a guide, but nobody knows how accurate it really is. Just because a problem seems impossible to solve does not mean that statistics is the next best thing. The fact that DNA testing is based off of statistic gives me the chills. Can I be given the death penalty soley because of statistics? Could a murderer be released from jail soley because of statistics?

Your point that "statistically x is impossible" makes me assume you never studied Statistics at all, because any statistics major knows that statistics is nothing more than a collection of data. There's no "law" or rule behind them. Statistically there's 50% probability of a coin landing on heads. That doesn't not guarantee you will get 5 heads and 5 tails after 10 coin flips.

It's absurd that you assume a proper risk management strategy leads to 100% or $1T. You sound like a typical home trader, who thinks everything is 100% or 0%.
 

ScalpingRus

Junior member
22 1
If I may, drawdown as far as % isn't anything compared to the account size of which you are trading. I honestly never have looked at my drawdown in dollars nor in % as much as I look at the formation which I am trading, and adjusting my lot size based on the formation.
Many people talk about trade management, money management, risk management, but the reality is none of the three is worth speaking about unless you have a defined system which works. Imagine if you had a system which NEVER experiences more then 4 straight losses in a row. Based on those stats how would you adjust your money,risk, and trade management?
 

new_trader

Legendary member
6,527 1,417
If you have a bad run, then you aren't using careful risk management.

Biggest loss I had was I think $580 something to be exact. I've since come up with a risk management plan, and the most I lost in a day now is maybe $250.

The most you've lost in a day is not what I think the OP means by drawdown.

From Investopedia:

DEFINITION of 'Drawdown'

The peak-to-trough decline during a specific record period of an investment, fund or commodity. A drawdown is usually quoted as the percentage between the peak and the trough.


I've easily gone more than 50% in the early days, even with the strict use of tight stops.
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock