Donex posted: I suppose DD is relative to your risk tolerance and the amount money traded relative to what you can afford to lose. If for EG, you can afford to lose 5k without it really affecting your life then you could easily trade that 5K into a high risk high DD system. 30% 40% 50% DD no big deal.
Now the flip side is the amount of money that would affect your lifestyle. Eg lets say 100K, You think you could tolerate a 30%, 40% 50% DD?
Many of these systems that have incredible gains with high DD usually have small amounts of money. Can they turn that $250 into 100K? Maybe if they're lucky enough, I suppose, don't know, doubt it.
DD is a significant psychological component of trading. In case you trade with large enough funds to make a decent living with, then probably you would not tolerate larger than 20% DD. I guess, you would start jittering at 10% already.
So - in my opinion - any strategy is useless for the purpose of making a living which has a >20% DD. These strategies are good only as HOBBY activities and to show off on MyFxBook.
I think 5% is extremely conservative, albeit I too don't like DD, but the whole idea of trading FOREX, Futures, options or any other highly leveraged instrument is to have higher than average returns and higher DDs are part of the package. Otherwise why trade these instruments? Better off trading less leveraged instruments, blue chip stocks for eg.
Personally I could accept as high as 20% (as long as the return is worth it) but would find it hard to sleep. 10% to 15% would be a lot more comfortable. 5% DD with exceptional returns, well that would be heaven.
If you have a strategy with a Monthly Profit/Max.DD ratio at least at 1:1 (preferable at 2:1 or better) for at least 8-10 months, then you can scale the strategy to reduce the DD <5%. You may become millionaire a little bit later, but at least you can sleep better.
In other words the DD itself does not matter on any showcase account, as any strategy can be scaled down to fit one's individual risk tolerance. What really matters is the Monthly Profit/Max.DD ratio.
ProTradersGroup posted: If you want to trade for living you would minimum your risk. Max DD 5% is good enough for long run.
You sound like the scam group trying to live off someone that works hard...off course I could be proven wrong by showing me 2 years worth of skill trading which includes a profitable trading portfolio, otherwise go hide in your hole
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