The Trader 01 Return Today:
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Drawdown % vs. Profit 11 replies
What drawdown does everyone use? 18 replies
Best way to reduce DrawDown 8 replies
How do I read a statement (drawdown)? 0 replies
Delta&DrawDown? 0 replies
DislikedIt really depends on the trader and strategy. Professionally managed funds tend to shut down after about a 20% loss. That said, if I recall correctly the turtle traders could have >60% drawdowns and come back so there's no finite rule.Ignored
Disliked{quote} The Turtles were trading at a time of very large commodity trends. This enabled them to recoup larger DDs. Look at all the jokers in the prop thread insisting on 10% to 12% drawdowns, then poof account blown - something I know occurs, but none of them every confess to it.Ignored
Disliked{quote} Yes, and I think a drawdown in the 60% range is probably a mistake. Imagine the psychology of riding a sinking ship that far down before coming back up. A real practical downside of that kind of drawdown is its very unforgiving. If you have a strategy and understand it's reasonable to expect a 10% drawdown, then you're down 15% you can take a hard look at what you're doing and retire the strategy if needed. If you're expecting to be down 60% at some point, and then you're down 70%, there's no coming back from it if your strategy is failing....Ignored
DislikedI tried to maintained drawdown below 5%. Is it possible. What is the drawdown rate for successful trader.Ignored
Disliked{quote} Among employed traders, with professional risk managers, 4% has usually and widely been considered an "industry standard". I’ve heard 5% quoted, as well, in some places. Of course "employed trader" is not quite the same thing as "successful trader," though. Some are independent and successful (but those are never trading spot forex or CFDs, for all the obvious reasons.)Ignored
Disliked"Appropriate" drawdown always depends on amount of Profit you wish you can make. I try to earned 8-10% a month, 100% a year, therefore I am OK with 15-20% DD, but anymore and my technique will become obsolete.(so far so good)Ignored
Dislikedwhen you trade some years, you will start not believe this trading mistakes from othersIgnored
Dislikedyou should not write this wrong fact again and again in a forum, or you teach your wrong information to othersIgnored
Dislikedand also helps yourself to get over the beginner trader level more easy.Ignored
Disliked{quote} But with 10% profit per month it is not possible to recover 20% loss. What is the math behind that numbers? It make no sense.Ignored
Disliked{quote} Thanks very much for correcting my inexperienced impression. {quote} So sorry, I won’t post any more to try to help people, then. {quote} Many thanks. I’m obviously slow with that. I’ve only been trading professionally for 34 years so far, and for only 2 investment banks and 2 hedge funds, so I must still have a lot to learn. I just guessed (obviously wrongly) that not many people here would know about the standard "industry 4% rule" which seemed to be the exact answer to the specific question asked in the original post. It's lucky for everyone...Ignored