@TrungLN My posts 11,23 and 24 in this thread are all that smart investor needs regarding entering on DD.Post 11 contains links to blog of one of the best traders at Darwinex,who is also educated,smart person.He did very good statistical analysis on this problem.Use google translate to read his blog posts.I am more 'common sense ' variety of analyst and I came to the same conclusion and strategy as him.
About psychological aspects of entering on High or DD I wrote everything that is needed,but it is scattered in many posts...
Unfortunately there will always be unscrupulous traders and impatient investors suggesting entering on highs is OK.When DD gets serious,they become silent and/or start panicking.For example provider of SUG was very aggressive in this and previous forum about entering on highs,but anybody entering now or more than a year ago in his darwin would be in the same spot.Well,not quite so:investor entering a year earlier would have paid taxes on profits that have evaporated since then,performance and management fees and suffered a bit of Divergence(that depends on each individual darwin-some are really problematic).
Early investor,buying on highs a year ago when that darwin was hot,winning Darwinia and promoted would have what red line indicates(even less than that if you count taxes,but that depends how people are taxed in their countries...). Patient investor would start now and have what grey line indicates.
There is also opportunity cost:money invested in darwin during DD will start profiting very soon,while same money invested on Highs can spend 1 year earning nothing if darwin goes into DD .DD and climbing out of it can take 6-12 months easily.
My post 55 in thread Alternatives to Darwinex has a table of 50 elite traders(2019) on eToro investment platform:half of them were 12 or more months from their ATM(all time high). Such are realities about Draw-downs.