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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.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.
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