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A drawdown is something that no trader wants to see. We all prefer good results and profitable systems.
Why do people think that 50 or 100 trades would be any indicator that a system works? I often reverse my original idea. For example, I increased the take profit points and now I would do the opposite and decrease them. Why would you do the opposite of what you thought could be a market advantage? Because if I found a real market advantage, I should be able to measure it.
Do you agree to that? If you can stick to a few basic rules, you will lose no sleep.
Most traders probably would have no problem to lose $0.17. Everybody has his or her own idea about how much is too much. I have found one thing that is very significant and a great advantage. If you only do one thing, you should really do this process with positionbased stop losses. Because you will find that your stop loss settings have the biggest impact on your trading results.
One of the biggest banks in Germany called Deutsche Bank, lost over €130,000,000 in 2015. They have the biggest buildings, the best equipment, and the smartest experts, but they still lost a lot of money. Even if everything with your trading account is running well, your broker might decide to close a particular account type in the middle of the game. From time to time you will not see a lot of positions in a back test. But is this not actually a good thing?
Trading manually, mistakes seemed to be unavoidable. I simply was unable to improve my results. Some of my systems run with more than 20 currency pairs at the same time.
Just do some testing, use different settings, entry signals and trading years, and you will find out what works and why it works.
I always decrease the risk setting when I see a drawdown that is too big for me. Depending on your capitalization, that might be something entirely different for you.
I gave up the trading excitement for something automated that I consider to be more reliable. Let’s talk about the false conception that people have about automated trading systems, okay? They think they can predict the future.
You might drive the same route each day, but you might have different situations depending on the traffic. In the winter, you maybe need more time to reach your destination.
We all know that it should be easy to pick the right direction. The price can either go up or down, not too hard. But in reality, I have never seen somebody who was able to really predict the future.
To get good results, you need to adjust the settings for your situation. That includes the account size, the currency pair you pick, and the account conditions. If you are able to deal with strict rules without manipulation, you have good chances to become profitable in the long run.