Do you worry about this as much as your risk per trade? Maybe you have some safe levels/ranges and then caution levels and then critical levels. Like a stop light, green, yellow, red.
Or maybe as long as you aren’t margin called, you’re good!
How do you guys approach drawdown?
Reading this as I just closed my biggest losing trade of all time lol.
RE: safe levels/ranges, does this mean having a plan of action depending on where you end up like if you’ve found yourself at the caution/critical levels?
The whole purpose is to manage your risk exposure so as not to blow your account. And no, I never worry as that is what I do.
just fyi, it is possible to invest and to have NO DRAWDOWN, and only profit.
Tell us more! Only profit sounds… not possible.
So stick to the 1-2% per trade rule. Cut losers. Preserve capital.
it seems that even chatgpt agrees with you.
ASK CHATGPT:
is it possible to invest money with no risk of drawdown?
ChatGPT:
No investment comes with absolutely zero risk of drawdown. All investments carry some level of risk, and the potential for drawdown (a decrease in the value of your investment) is inherent in almost every investment opportunity.
How far would you let things slide before deciding it’s time to change up the strategy or something about your trading? 10%? 20%
Or is that too high?
My aim is to gradually increase my account size, so that a 1% risk per trade moves up the profits. My trend trade strategy is profitable, so I do not have to be overly concerned about losing trades.
And as I add spare money to my account size each month, it is compounding to higher levels.
As for letting things slide is for others, not me…
Yup, I’ve been adding to my account size too. Nice to see the balance go up for sure however it happens.