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These costs will return you for 2-3 months and in the future you can safely extract from Forex Prop firm about 2-5K$ per month (without scaling).
(if you have doubts, ask the developer of the system in a private message)
Thanks for the reply. My question though was targeted at your leverage use rather than the leverage limits. I have seen lots of strategies including forex collapse when they employ methods that have spikes in leverage that coincide with drawdowns. These strategies often keep the drawdowns small for a while then the leverage use eventually backfires and a large sudden drawdown occurs. I didn’t know if it concerns you or if you have some methodology to adjust for it.
For example this strategy would only ever get to about 10 or 12 leverage which doesn’t seem high. However it eventually backfired.
No, that particular strategy crashed and burned because the trade leader allowed a losing trade to become huge, period, leverage has nothing to do with the problem.
Here are the losing trades responsible for that spectacular loss (February 26, 2020 and March 15, 2020):
As we can clearly see, the losses did NOT happen suddenly, overnight or because of some unexpected financial events, the losing positions lasted for days so the trade leader was fully aware that he was losing big money day after day.
This is called very poor money management, leverage has nothing to do with the problem, at least in this case.
That’s the opposite, the location of your stop and your percentage stop (4% for instance) will automatically give you the right leverage to use, not the other way around.
We are of course assuming that the trade leader is trading relatively liquid assets that create minimal slippage when the market makes a sudden move against him/her.
The location of the stop must be based on sound technical analysis, not on leverage used.
And leverage itself depends on the percentage of trading capital the trader is willing to lose on the trade.
Trading with no stop is the dumbest thing to do, because the trader is basically saying to the Market : “Here, you can take up to 100% of my trading capital.”
So yes, in that case a crash is inevitable, it’s just a matter of time, especially if the trader is trading on margin.
That may be so, but look at his C2 track record, after 1056 trades his biggest “loss” per trade is 1.82%, and his average loss per trade is 0.08%, even though his average leverage is 9.09 and his maximum leverage is 47.76 !!
This allowed him to produce a 41.5% return so far with a (“whopping”) 5.5% maximum drawdown.
This clearly shows that great returns can be obtained with high leverage AND minimal risk (assuming the trader never deviates from his tight risk control protocol)
His track record is here: FT Forex 3
I don’t know who WiseTrading @WiseTrading is. I can see you just joined the forums within the last week. Welcome! All else being equal more leverage is more risky. If you don’t agree with that I don’t want to discuss further because claiming it isn’t is something I have seen before.
Your claims are very similar to people I have had a very similar, long, and unproductive, discussion with multiple times. You may be the same person or someone entirely different.
Either way if anyone thinks leverage isn’t more risky I challenge them to run a strategy with over 20x average leverage use and prove me wrong. As it stands no one on here has been able to do that and survive for long periods of time. Make me eat my words. Prove that leverage isn’t more risky.
PS stops cannot solve the problem as more leverage increases the likelihood of getting stopped out and more frequent losses.
Only one strategy has survived for 1,200 days with an actual positive return while using 7.10 average leverage. None have gotten close to 20x average leverage and survived that long with a positive return. Noah in the grid screenshot seems to be an error or something as the link shows it did not have a successful history.
Good point, but if you study the drawdown per trade of each 20X leverage C2 system that failed, you will notice that it clearly exceeds 5%, 10%, 25% or even 50% on almost each closed position.
No trading system, no matter how good, can continue to survive with that kind of risk per trade, I guess we can both agree on that.
So what really caused the failure of these systems, is it really the high leverage used, or simply the trader’s willingness to allow a 25% loss or more on a single trade?
Again, it is all about money management and discipline.
If used wisely and with strict money management rules, leverage (which is only a tool) can double, triple or quadruple the return of any profitable system, while still keeping the risk within reasonable limits.
On the other hand leverage can and will crush any system if the trader uses it to trade illiquid assets.
With illiquid instruments, stops become virtually worthless.
I agree leverage is not a problem, as long as you put tight stops. I myself is also demonstrating an S&P ES automated day trading system with high leverage (8X) and is demonstrating at C2 (only live for less than 3 months though):
My question is with more than 40X, how tight those stops would be, and whether an effective, profitable trading system cab be realistic? I figure the stops would be often triggered (again, it is not a problem). I am not familiar with the forex trading market - I think it is 24-hour a day training - are you going to watch the market every minutes? Or use machine to put in stops automatically? I cannot imagine with 40X leverage i would dare to leave my computer any second. I know that is not what did, you only occasionally do that high leverage trading, and probably you do watch the market during those hours.
My system has been backtested for 5+ years and it survives, with 865% return : https://zen1.us/. Sure it won’t represent the forward looking system performance. I hope I can demonstrate a long-term good performance here at C2.