earlier you said that your max drawdown was around 6%. was this calculated based on the method you described here (i.e., cash balance only)?
if the answer is yes, what was your max drawdown based on cash balance + open trade equity? i understand your point on using cash balance only, but the other method is the method that a money manager must use to report their returns and drawdowns (i think).
if you want feel free to pm me.
if the answer is yes, what was your max drawdown based on cash balance + open trade equity? i understand your point on using cash balance only, but the other method is the method that a money manager must use to report their returns and drawdowns (i think).
if you want feel free to pm me.
Quote from Buy1Sell2:
Simplistic? yes. Powerful? yes.
There are many ways to make money trading but just one proper way which will enable the greatest reward and that is to aim for homeruns.
Losers stay in trades that are not in the black. Very different than what I do.
My short position is nearly guaranteed to be profitable. I am short from nearly 1489 and will stop out above 1410. As yet, there has been no drawdown on my position. Correct calculation of drawdown is with relation to cash balance (realized profits). Many traders calculate drawdown based upon cash balance plus open trade equity. This is not the correct way as it will cause a trader to make too many trades(decisions) and get scared out of the pot. --Good fortune to all.
