DD values

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Christian Schuller
2359
Christian Schuller  

Hello,

what DD value in average is a good one?

For sure, the lower the better, but then your performance might be too small depending on the strategy.

Are there any publications about this?

Regards

Meng Yin Teoh
2200
Meng Yin Teoh  
Christian Schuller:

Hello,

what DD value in average is a good one?

For sure, the lower the better, but then your performance might be too small depending on the strategy.

Are there any publications about this?

Regards


drawdown is a function of risk you take per trade. For example, if you risk 2% of your account balance per trade and your drawdown is 40%, then you may reduce your drawdown to 20% by reducing your risk to 1% of account balance per trade.

How much you want to risk is completely depends on your personal risk appetite. The rule of thumb is the bigger is your capital, the smaller drawdown you should look for. Most people can accept losing 50% of $1k, but I doubt if anyone is ok with losing 50% of $1mil.

Christian Schuller
2359
Christian Schuller  
Meng Yin Teoh:


drawdown is a function of risk you take per trade. For example, if you risk 2% of your account balance per trade and your drawdown is 40%, then you may reduce your drawdown to 20% by reducing your risk to 1% of account balance per trade.

How much you want to risk is completely depends on your personal risk appetite. The rule of thumb is the bigger is your capital, the smaller drawdown you should look for. Most people can accept losing 50% of $1k, but I doubt if anyone is ok with losing 50% of $1mil.

Thank you
Grigorios Papaioannou
561
Grigorios Papaioannou  
Depends the initial capital, its nothing to start with 100-200$ and use a 50% DD system if it has returns above 100% per month, so a rule of thump is to use Return Monthly > DD%...so in one year you would have risked just the 10% of the total performace, you put 100$ and get 1000$ ;)  
Waseem Raza
10027
Waseem Raza  
Just a simple way to win as annual growth
Set a task of 3% growth monthly and with setting this task mostly you gains 5% , and this controls everything from leverage to DD.
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