Drawdowns

S

sKaLpZ

Let's face it. If it weren't for drawdowns we'd all be billionaires.

how do you deal with them?

what percentile of your account cap (or trade cap) do you typically have in drawdown.

In currency trading, with its high margin (up to 400:1) it's been difficult to estimate profits vs risks.

therefore I've ended up maintaining a low drawdown to cap ratio but it's also severely limited my equity curve (how much money I make).

When you put on a trade, and it goes into drawdown, how do you handle it, by just killing the trade on a pre-defined basis aka using a Stop Loss?

Or do you have better ways of dealing with it?
 
i bet 40,000 eur/usd per trade, if it goes against me 5 pts i bet 80,000 more if that goes against me 10pts more i bet 160,000 more etc..... until i get my 5 pip reaction and get out even, try it, it works!
 
Quote from jonnysharp:

i bet 40,000 eur/usd per trade, if it goes against me 5 pts i bet 80,000 more if that goes against me 10pts more i bet 160,000 more etc..... until i get my 5 pip reaction and get out even, try it, it works!
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some day it wont.
 
Quote from sKaLpZ:

therefore I've ended up maintaining a low drawdown to cap ratio but it's also severely limited my equity curve (how much money I make).

When you put on a trade, and it goes into drawdown, how do you handle it, by just killing the trade on a pre-defined basis aka using a Stop Loss?

Or do you have better ways of dealing with it?
More...

Well either you trade "to be right", or you trade to make money.

You can use tiny incremental lot sizes to facilitate averaging down and get a very good chance of eventually getting out "even", and never having to admit you were wrong -- but you won't make very much on your good calls either.

The flipside to that is to use a much more meaningful position size with stops to limit the damage. Concentrate on good timing for entries and the use of stops will start to "make sense".
 
Quote from illiquid:

The flipside to that is to use a much more meaningful position size with stops to limit the damage.

Concentrate on good timing for entries and the use of stops will start to "make sense".
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that's the dumbest fckin' thing I ever heard in my life.

you've gone from flaming to being stupid. an advancement, I suppose.

I'd like to know how Neil managed his euro long positions as the market tumbled 18-cents against him.
 
How are the carry traders making out today? I bet a few of them have had bad days. servant, how are you making out. I feel bad for you today is just about the worst series of events that could of happened to you.
 
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