So let's assume that a trader has indeed

[Millionaire]

I think you're too humble. It's very easy to blow up a 300K account trading with leverage. I saw at least one guy on this board almost do it. He went silent, so maybe he actually did blow up. Another guy took 10K to 100K rather quickly and then lost it all again...

Consistency and managing drawdowns/risk is the hard part in this game, IMO.

There is never any excuse to blowup an account. Or exceed predefined drawdown limits.
If you never want to lose more than 25% of your account, that is almost completely in your control. You cant bet 2.5% on a trade or you can bet 0.25% or even 0.1%. So you can control your downside.

But drawdown duration is not under you control. You cant control how long a drawdown will last. And if you attempt to do so, you could just as easily make it last longer.

 

[wmwmw]

Usually 30 points, in rare case it would be 80 points.
But most of these two type would be avoid because I have intraday signals that can avoid a big down(or up) day.
The problem with my system is, if I lower my leverage, it would be lower my profitability significantly.

 

[Millionaire]

Usually 30 points, in rare case it would be 80 points.
But most of these two type would be avoid because I have some intraday signal that can avoid a big down(or up) day.
The problem with my system is, if I lower my leverage, it would be lower my profitability significantly.

That sounds about ok if your stats are correct, risking $4000 per $15000 allocation. Equates to 26%.
But you have to make sure your method really produces close to 80% winners, with at least a 1:1 RR. Otherwise 26% will be way too much and you will end up blowing up your account for sure. So you need to be really sure.
If you are only demo trading at the moment then it is not a real concern for now.

 

[fullautotrading]

It's almost a philosophical question. Anything less than a lifetime isn't enough to prove a track record without a doubt.

lol at that point not even the lifetimes of all multiverses

The strategy must make sense conceptually, in the first place all the rest is usually curve fitting

There is no profit without (non-lunatic) reasons for it

 

[JustAnotherCog]

created a great trading system....solid stats....logical risk management.....proper scaling ladder.

What are the next steps for him to create his own hedge fund?

Many people clearly have a view on this with comments such as "prove it" etc. And although they are warranted to an extent because trading is genuinely difficult and few will be capable of being hedge fund managers, I still feel the comments do not really offer any constructive advice.

I would extend the feedback by saying, "Yes prove it. But do this by 'actually' proving it in an environment where you can start up a small hedge fund, and if your results concur with what you are saying then your hedge fund will grow".

There are a couple of platforms where you can do this without incurring any hedge fund start-up costs. One of the best imo is www.darwinex.com. Here, you can start to get investment if you genuinely perform well, and there are ways to eventually scale up when you grow your fund by moving onto the Darwinex Pro offering. Then you really will be managing a hedge fund.

But the key is that you will have no start-up costs and both you and your investors will be covered by robust regulation (UK FCA/CNMV MIFID), so it is all completely legal. What have you got to lose? Prove to us all on this forum you really can deliver what you say Post links to your results on Darwinex so that we can see them. Who knows, we may even be future investors...

 

[murray t turtle]

There is never any excuse to blowup an account. Or exceed predefined drawdown limits.
If you never want to lose more than 25% of your account, that is almost completely in your control. You cant bet 2.5% on a trade or you can bet 0.25% or even 0.1%. So you can control your downside.

But drawdown duration is not under you control. You cant control how long a drawdown will last. And if you attempt to do so, you could just as easily make it last longer.

%%
Good points, as my banker dad used to say ''accidents don't just happen son , they are caused.''
Blowing an account up could be a good thing for a younger trader\easier to replace. And replace the flawed plan that permitted it