Drawdowns – Have you got the Stomach??

• 04/13/2018 at 7:55 AM #68241
  jebus89

  I think drawdowns and the ability to cope with it is something you learn from experience.

  We are all humans and the psychology is a big factor here. Some are built for risk-taking, some get sick from taking risks. personally im a sensitive kinda guy with lots of feelings, my stomach has twisted and turned so much that i had to remove myself from the trading-equation! So i started with algos and that has helped me alot.

  when you read books about trading (f example market wizards or “how i lost 1 million dollars” (RECOMMENDED!!) you get to hear about the same emotions and feelings that you go through, EVERYONE goes through them, even traders with 40+ years experience, feel the pain when trades are going against you.

  And the ONLY way to survive in this trading-world is to have something that you can repeat and that continues to give profitable trades. If you have a strategy that does this for you, you need to backtest, check it, optimize it, keep shit tight and sturdy and when your 100% sure everything is as good as you can make them for now: you run it in demo 1-2 months. If everything feels right and the strategy (win or loose) does exactly what its suppose to do, you run it live! WITH CONFIDENCE!! 🙂

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  GraHal

  

  jebus89

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  05/12/2018 at 8:11 PM #70269
  shug

  Most of the ‘trading system sellers’ out there are ‘dealing’ with drawdowns in there accounts by selling bogus systems!, probably make more money selling those systems to poor souls like me LOL

  If anyone out there with a high degree of success and consistency in the markets has a heart pleeeeeeeeeeeeeeeze share with me this scarce commodity.

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  GraHal

  

  shug

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  06/13/2018 at 2:01 PM #73098
  Vonasi

  I thought that I would bring this thread back to life!

  I have been thinking about draw down and how to avoid it and then I got to thinking it would be quite useful to know what the maximum draw down for a market has historically been. At least that way we have something to gauge our own strategies draw down against. So I wrote this very simple strategy. Run it on any market on any time frame and the draw down in your results will be the maximum draw down for your available data. This can be displayed as a value or a percentage of the closing price.

  There are two graph lines. One is the biggest all time draw down and the other is the current draw down which is valid until a new all time high is made.

  ITF file also attached.

  

  // Biggest Draw Down Analysis Tool //By Vonasi //13 June 2018 //Percentage = 0 IF High > lastHigh then LowestLow = low LastHigh = high ENDIF IF High < LastHigh then LowestLow = Min(LowestLow,low) DrawDown = LastHigh - LowestLow BiggestDD = Max(BiggestDD, DrawDown) endif IF Percentage then DrawDownRes = (DrawDown/close)*100 BiggestDDRes = (BiggestDD/close)*100 ELSE DrawDownRes = DrawDown BiggestDDRes = BiggestDD ENDIF return -DrawDownRes coloured(0,0,255) as "Draw Down", -BiggestDDRes coloured(128,0,0) as "Biggest Draw Down"

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  // Biggest Draw Down Analysis Tool //By Vonasi //13 June 2018   //Percentage = 0   IF High > lastHigh then LowestLow = low LastHigh = high ENDIF   IF High < LastHigh then LowestLow = Min(LowestLow,low) DrawDown = LastHigh - LowestLow BiggestDD = Max(BiggestDD, DrawDown) endif   IF Percentage then DrawDownRes = (DrawDown/close)*100 BiggestDDRes = (BiggestDD/close)*100 ELSE DrawDownRes = DrawDown BiggestDDRes = BiggestDD ENDIF   return -DrawDownRes coloured(0,0,255) as "Draw Down", -BiggestDDRes coloured(128,0,0) as "Biggest Draw Down"

   

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  gabri, GraHal

  

  Vonasi

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  06/13/2018 at 4:35 PM #73114
  GraHal

  Added as row 38 to here Snippet Link Library

   

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  Vonasi

  

  GraHal

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  06/13/2018 at 5:29 PM #73117
  Vonasi

  Now – if I only had a pound for every snippet in the library?

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  GraHal

  

  Vonasi

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