Drawdowns

Money Management is something that you should examine only after you have considered survivability. Therefore, we must look drawdowns first.

Drawdown is the maximum distance from a equity high before you make a new equity high. It is the risk you would take if you began your trading system at the worst possible time. A drawdown is usually quoted as the percentage between the peak and the trough.

Drawdowns are always bigger in real-life than in paper trade. Often things happen in real-life that never happen in theoretical tests.

The most important question that we can conclude from the largest drawdown is the following:

How much capital do I need to trade in one particular Market?

Capital is our most precious asset because it let us Trade and run our Trading System as a businnes. Even if you know that your system makes money over the Long Run you need moeny to trade.

Rate of Return, or Return on Invesment (ROI) is something that you should examine only after you have considered survivability. Therefore, we must look drawdowns first.

Risk and Reward

Our Online Real-Time Signals tell you the Risk and Reward (Profit and Loss) of your GamePlan with predefined Targets and Stop Losses.

Positioning Sizing: How much to Buy or Sell?

Diversification: Spreading Risk across the Target Levels making similar position on different Levels to increase the opportunity for profit by increasing the opportunities for catching susseful trades by properly diversify positions.

Exit Scenarios: enhance the benefits of diversification, and increased the likehood that winning trades would offset losing trades by adjusting trading Size representing a constant amount of risk. This equalized the Risk across all entries and resulted in better diversification and a more robust risk management.

Performance to Build Confidence

Our Online Real-Time Signals tell you the Risk and Reward (Profit and Loss) of your GamePlan with predefined Targets and Stop Losses.

Exit Strategy

Many expert traders agree that implementing a professional-level exit strategy is one of the primary cornerstones of futures trading. In fact, a strong exit strategy is as integral to a trader's success as a strong entry strategy. Before you put on a trade, you should know your exit strategy!

Market Losses

The deeper the losses the less likely you are to recover those losses as they require ever increasing gains just to break-even.

See the graphic below for a basic outline of the gains required to overcome investment losses.