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I want to intive you to monitor my system trading on the FX (GBPUSD and USDJPY only) called the EW Trends. I am working with the max possible DD as 2% for a tradea and a day. I use 15 pips stoploss points initially. I take 4 pips profits in general.
I prefer working with monthly profits and losses borders in my strategy. The EW Trends touched more than 10% growth. Thus, it stopped to trade for this month. I think this is necessary to be in the game and be profitable for the long term.
What do you think about my statistics? And, what is your borders preference in general?
Don’t worry too much about max drawdown per trade.
You see, most trading books and self-proclaimed trading “experts” tell us that we should never risk more than 1 to 2% of our capital on each trade.
It is indeed an excellent trading advice, in general.
However, it all depends on the logic of each trading system!
Some trading strategies need a tight stop (less than 2% for instance), while other systems will outperform the market with 3 or 4% stops ONLY.
That said here is another very important point to keep in mind : Numerous studies have shown that when the stop routinely exceeds 5% of capital, the risk of ruin is virtually GUARANTEED in the long run.
I agree with you in general. However, the being long term profitable is related Reward/Risk ratio and the Win rate. The working low DD are related saving money and getting low percent growth (but for big capital). If we have good Reward/Risk ratio and win rate, we can prefer working with little bit more DD to obtain good returns, I think. Thanks for your words!!
The EW Trends EA has just complete its first week tradings. It obtained 5.49% growth with max about 0.80% drawdowns in only a week. This strategy’s first aim to save our money by working max possible 0.5% drawdown for a trade. According to my opinion 5.49% growth in a week respect to max 0.80% daily drawdown is quite good.
You can examine the strategy’s today and weekly performance via follwing table.