Why do you limit the maximum drawdown on the account? - page 22
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Specific situation. There are two options:
1. Working with a deposit of $100,000 and a loss limit of $20,000 (20%);
2. Working with a deposit of $20,000 and a loss limit of $20,000 (100%, theoretically);
I think that is how I understood the terms of the topicstarter... Let him correct me, if I am wrong.
it's like this
it's like this
For your system, what is the probability of a 20% drawdown and what is the probability of a 100% drawdown? The size of the deposit is not taken into account.
I can set a loss limit of 20, I can set a loss limit of 100. In both cases it is equally likely that a drawdown will occur.
1. Working with a deposit of $100,000 and a loss limit of $20,000 (20%);
2. Working with a deposit of $20,000 and a loss limit of $20,000 (100%, theoretically);
1. Earnings more, risk less.
2. The earnings are less, the risk is greater.
So what's the point?
1. Earnings more, risk less.
2. The earnings are less, the risk is greater.
So what's the point?
There can't be more or less, everything is the same in money, except for the fact that in the first example most of the money is not involved in the work, which means the work in the first example is less effective. there is no need to count anything, everything is right at the palm, both use only 20K
It can. More funds take a bigger share of the manager's capital, so they get a bigger percentage.
If you want to say that in the second case you increase the load by a factor of 5 to get the same profit as in the first case, then that's not goooood ))))
It can. More funds take a bigger share of the manager's capital, so they get a bigger percentage.
If you mean to say that in the second case you increase the load by a factor of 5 to get the same profit as in the first case, then that's not goooood ))))
you can and can)
in the second case, the load is optimal, it does not need to be increased.
What do you think optimum load means?
What do you think optimum utilisation means?
where all account funds are used, i.e. where the loss limit is 100%
You mean 100%?
So you are not using all your funds - you are borrowing money from the brokerage company against your entire deposit, under the terms of leverage.
Do not confuse the flies with the cutlets - the flies are separate, the cutlets are separate ))))
When you deposit $100 000 and trade with 1 lot, you are trading with what you have - i.e. using all of your own funds without borrowing them from a brokerage company.
And when you credit your account with $1000 and trade 1 lot, using 100 leverage and thus loading your deposit under 100% - this is pure self-deception. You just borrowed from the brokerage company on all of your deposit on the terms of leverage.