Suri sir,
are you telling for a single wrong entry? or continuos wrong entries?
Hello,
Professional Trader,
He is talking about Max.Drawdown that would be happened if u faces series of losses.
There are various types of Risk-managemet techniques that u can incorporate in ur methods/system.
Normally any professional trader design his Risk-management techniques according to his Objectives and goals that he/she is going to achieve...See these things depend on ur Psychology and trading system/method.....IMO Defensive approach is best in trading when Comes to Risk-management...
My way of approach....
1)No allocation of capital more than 25% in a Single Trade or Risk of 2% on total Equity(including Brokerage)....which ever is lesser i approach that.
2)My method of risk control is autamatic..i.e when in a drawdown period its reduces risk automatically and increase the risk when trades are in my favour
3)Exit are the main part when comes to risk-managemet effectively...these can reduce or increase ur drawdown...and if u design exits carefully u can always be in comfort zone regarding drawdown.
Regards,