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SwapTrader
Jul 10 2018 at 10:10
24 posts
Professional4X posted:
Drawdown isn't a data point of primary concern over the long term.

Consider this, if you have a DD of 10% and then one day a trade goes bad, and another and another, and those 3 bad trades go against the account, and you end up with 60% DD because of one day of your trades. But prior to that, you had a great DD.

If we take into consideration when, why, and how the DD occurred, then it's a more realistic analysis of the account.

If however, the strategy being used for trading regularly uses 60% DD against the account, then it's a serious problem for the investor. It means that they aren't using safe money management, and they are probably trading with a higher leverage than they should be.

There is a BIG difference when trading 0.5 lot size on a $100.00 account, and trading 0.5 lot size on a $100,000.00 account.


Agree! DD shows the worst the level an account has reached, not necessarily how the account is performing.

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