Drawdown max and profit

Hi all Traders,

It is interesting that most people want a system that is low on drawdown like 15%, 20%, 30% max.


In my testing with any expert advisors, a small increase in DD max can bring big long term gain.


The below is an example:

Initial balance= 10,000.
Setup Profit No. Trades DD max Min size
1 321701 101 77.8% 3
2 315950 101 80.5% 3.5
3 122704 90 67.2% 2.5
4 37073 81 56.7% 2
5 15699 77 44.1% 1.5
6 6192 76 30.7% 1
7 1831 76 15.8% 0.5


Which setup you prefer?

Note that we can always add more money when the DD go too low, say 50%, 60%. Also, we can always withdraw the profit to keep it for emergency situation like DD= 50% stated above.

Cuong VC

Over what time period did you test data? Usually a large DD indicates that the strategy will fail in the long term.

That test is 8 months long.

If you have to keep depositing money into your investment account just to keep it from getting blown from bad trades, then you are CLEARLY trading badly.

Learn to properly trade with a highly regulated brokerage that provides extensive asset protections.

I don't have to, I just want more from my money.

Consider this two scenarios which is an EA trade for us 100%:
 1/ (Setup 4 above 4): profit $37,073 with one or two time the drawdown reach near 56.7% which the traders/investor need to deposit some money to pass through the difficult time (the EA will alert us).
 2/ (Setup 7 above): profit $1,831 and the trader/investor just dont have to do anything.

I will pick scenario 1.

Professional4X posted:
If you have to keep depositing money into your investment account just to keep it from getting blown from bad trades, then you are CLEARLY trading badly. Learn to properly trade with a highly regulated brokerage that provides extensive asset protections.

CuongVC posted:
I don't have to, I just want more from my money.

Exactly. You have no desire to learn to actually trade properly.

CuongVC posted:
Consider this two scenarios which is an EA trade for us 100%:
 1/ (Setup 4 above 4): profit $37,073 with one or two time the drawdown reach near 56.7% which the traders/investor need to deposit some money to pass through the difficult time (the EA will alert us).
 2/ (Setup 7 above): profit $1,831 and the trader/investor just dont have to do anything.
I will pick scenario 1.

You are ignoring reality. Rather than closing out your bad trades, you are just letting them run without any actual understanding of how the markets work.

You assume incorrectly that you can just keep putting money into your account until it turns profitable.


Look at what is really happening with your account ok?

Say for example you have $100,000.00 in your investment account.
You open a series of trades which all go against your account.
You are now at 60% DD because of your currently active bad trades, and you say 'Ok ill just put more money in to cover it.'

Meanwhile, since it is 60% of the account holding bad trades against your capital, you have already lost $60,000.00 if those trades don't turn around soon. But your idea is to just keep adding money so it can be lost as well.

Letting trades go bad and then just letting them run forever to keep getting worse is a very ignorant method of trading.

It shows you have absolutely no real understanding of the markets.
You use NO money management.
You have no real strategy other than 'ok Ill just keep putting money into this dumpster fire, and hopefully it will make me a profit eventually'. That is completely absurd to think that is a good idea.

Stop acting like you have any clue about properly protecting your investment capital and making a profit.

Just throwing gasoline onto a dumpster fire does not make you a firefighter, so why would throwing money away make you a good trader?

It doesn't.

Learn to trade properly.

Interesting logic.

I don't really want to persuade you.

I just want to see how people pick their option. I pick option 1 because I am fine tuning my EA and see that with a small increase in DD max allowable, there come a big increase in profit.

CuongVC posted:
Interesting logic.

It is solid logic to use proper money management and to focus on asset protections.

CuongVC posted:
I don't really want to persuade you.
I just want to see how people pick their option. I pick option 1 because I am fine tuning my EA and see that with a small increase in DD max allowable, there come a big increase in profit.

Small increase in DD?
You have an 80% DD for your Example of trading.
Depending on your brokerage rules for live trading, you've just effectively blown your account trading at those levels.


See below:

CuongVC posted:
Setup Profit No. Trades DD max Min size
1 321701 101 77.8% 3 <--------------------- 77.8% DD?
2 315950 101 80.5% 3.5 <--------------------- 80.5% DD?
3 122704 90 67.2% 2.5 <--------------------- 67.2% DD?

And you consider those levels to be acceptable? Over 80% DD? That is beyond absurd.
On a $100,000.00 USD Live account, 80.5% would be over -$80,000.00 in loss on those bad trades that you allowed to run.

The way you are trading, you will blow your account if you continue this way.

You do not understand how to properly trade.

You do not understand proper money management.

You do not understand how the markets work.

This is the original info. in a easier to read layout:
Setup... Profit.............No. Trades .....DD max.......Min size
1.........321701...........101.................77.8%.............3
2.........315950...........101.................80.5%.............3.5
3.........122704............90..................67.2%.............2.5
4...........37073............81..................56.7%.............2
5...........15699............77..................44.1%.............1.5
6.............6192............76..................30.7%.............1
7.............1831............76..................15.8%.............0.5

Yes setup 1, 2, 3 have too high DD to me too. But let point out these:

- From setup 7 to setup 6: an increase of DD max from ~16% to ~30% bring more than three times of profit.
- From setup 6 to setup 5: an increase of DD max from ~30% to ~44% bring more than two times of profit.
- From setup 5 to setup 4: an increase of DD max from ~44% to ~57% bring more than two times of profit.

So I would pick setup 5 or even 4. I won't pick setup 1,2 or 3 (don't assume that I do).

I have plenty of time to do some deposit when the DD approaching 40%. And my test showed this happen only one or two times in it's test period.


The information above is from a test, not how I trade. I don't think you know how I trade yet. I have traded from 2006 so please don't consider I am new to this Forex world and save your 'teaching' and fast conclusion. I don't know if you are a successful trader or not because I couldn't see any system on your profile. Only see the 'professional' in the name. It is better you show some real account performance before teaching.

Cheer

CuongVC posted:
I don't know if you are a successful trader or not because I couldn't see any system on your profile.

I am considered a quite successful trader by people who actually know me.

And no, I don't have any systems for public viewing.
I used to, but I no longer do because of reasons which are not open for discussion.

CuongVC posted:
Only see the 'professional' in the name. It is better you show some real account performance before teaching.

Listen to my opinion, or don't. The choice is yours.

I'm not the one making absurd claims with 80% DD and thinking that it's ok to do so.

I have nothing to prove to you.

Who said that 80% DD is ok, sir? Read carefully before making conclusion because many of your conclusion are too fast and wrong.

You have nothing to prove to me. Same here, so stop your 'teaching' because all the teaching you did in this are not new or some even wrong to me. But there is no time for discussion on that. That is not the purpose of this thread.

It doesn't have to go this way if you were more careful with your words.

I hope this is enough, we need to focus the effort in something else that is more beneficial.

I just ask all traders here 'what setup do you prefer?' in the original post. That is the purpose of the post, not asking how to trade.

Cheer

 

CuongVC posted:
Who said that 80% DD is ok, sir? Read carefully before making conclusion because many of your conclusion are too fast and wrong.

You have nothing to prove to me. Same here, so stop your 'teaching'.
[/quit]

CuongVC posted:
It doesn't have to go this way if you are more careful with your words.

I hope this is enough, we need to focus the effort in something else that is more beneficial.

You would do well to pay attention when actual professionals try to talk to you.

They say that ignorance is bliss.

Enjoy.

CuongVC posted:
I just ask all traders here 'what setup do you prefer?' in the original post. That is the purpose of the post, not asking how to trade.
 

And my answer was that your options are horrible and absurd with unreasonable 80% DD.


Regardless though. Don't bother responding.

I need to correct what you said that is not right about me:

The setups (in the original post) are not my options. That are the test optimization's results, sir. And of course I won't pick the one having 80% DD (as stated earlier). That was another fast conclusion of yours.

Chill out guys. It's getting a bit heated here. No one is saying that 80%% DD is ok. This is meant to be a discussion about how increasing potential DD (risk) can lead to increased profits (reward). This is a fair enough discussion

Thank you SkaterOnIce.

Professional4X posted:
If you have to keep depositing money into your investment account just to keep it from getting blown from bad trades, then you are CLEARLY trading badly.

That`s for sure. 50-60% DD?! That`s madness.

momo3HC posted:

Professional4X posted:
If you have to keep depositing money into your investment account just to keep it from getting blown from bad trades, then you are CLEARLY trading badly.

That`s for sure. 50-60% DD?! That`s madness.

Yes; it’s horrible ratio! This is why; we should follow the rules of money management as well as rik management policies!

95% of traders are loosing. So the common 'knowledge' is most likely not really a true knowledge.

This thread just to know what the majority traders/Investors would like to see their DD and Profit. Thank you for the input.


Show your trading performance!

CuongVC posted:
95% of traders are loosing. So the common 'knowledge' is most likely not really a true knowledge.

This thread just to know what the majority traders/Investors would like to see their DD and Profit. Thank you for the input.


Show your trading performance!

I think so; only basic trading instruction is not enough here! Advance trading knowledge the essential thing; pro traders are very comfortable because of their pro trading skill.