Draw Down of Trading Strategy

Discussion in 'Risk & Money Management' started by Scalper, Nov 12, 2015.

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  1. Scalper

    Scalper New Member

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    Hello Friends,

    As I am Practising one trading strategy from last 3 months in Crude Oil Trading. In this Strategy I am facing 20 % Draw down in my Account with continuous 8 failed trades. Later My strategy giving positive results and giving around 10 % returns per month.

    Seniors please advise that Can I proceed with above draw down or better to reduce the Position Size? Is 20 % Draw down is Normal or it is a bit higher?
     
  2. vijayanscbe

    vijayanscbe Well-Known Member

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    3 months data is not sufficient to backtest a strategy. Atleast you need 3-5 yrs datas. More is better.

    Yes it is very higher for one loss streak.
     
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  3. Scalper

    Scalper New Member

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    Thank You Sir

    I did not have 3 to 5 years data. I did live trading for last 3 months as a begining I am trading very small amount on this strategy.

    I will increase my account size slowly. How much You will recommend the Drawdown Limit. Can I reduce my position size to half which may limit Drawdown to 10 %.

    Your Valuable reply is appreciated Sir.
     
  4. vijayanscbe

    vijayanscbe Well-Known Member

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    If your live trading experience 3months only means , You have to face many steep learning curves. Its takes atleast 2-3yrs to be a consistent trader. So trade very very light mode (1 lot crudemini) and learn.
     
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  5. Scalper

    Scalper New Member

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    Thank You Sir.

    I am also in the same plan sir. In 2 Years I want to be a full time Trader.
     
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