Earlier in a thread I use to track how much money Viper and Dayfox are making me I made a calculation to determine if having Day Fox on risk 0.4 and Viper on 3x risk would be safe. I was basing this however on the equity drawdown and not at all looking at free margin which is always a lot lower than the equity. It appears an account could be blown at 40% draw down based on what I've seen with the margin available in my forex account so I'd like to ask what amount of equity drawdown would it take to have a blown account on 1:500 leverage with an account size of 30K?
Here is my old calculation when I wasn't thinking of margin, would I be safe or would the account be blown?
"Viper at 3x risk per month means a return of 7.8% per month and 3x risk is what Viper recommends you have him at. Day Fox at 1x gives you about 7.38% however as much as I would like to put him at 3x he does have a bigger drawdown at 1x risk at -22.91% vs viper at -13.81%. So based on past performance you could have Day Fox at 3x risk and not blow the account and gain 20% per month but that's not a risk I'm willing to take as tempting as it is knowing that could turn $30,000 into $267,000 in just 1 year.
So the moment I saw this I added Day Fox to my account at 0.4 risk (remember 0.69 is 1x risk). Overall I'm keeping him low because I really don't want to risk losing my entire account if they both go into drawdown at the same time. Based on past performance (which doesn't always predict the future) I would still be safe if both of them hit their worst draw down at the same time. Viper 3x would be 41.43% while Day Fox would be around 16% (based on my lower risk with him). So together that is about 56% drawdown. Yes that would be scary but overall the risk isn't too high on my account and I should be safe"
Would 56% drawdown be a blown account?
Here is my old calculation when I wasn't thinking of margin, would I be safe or would the account be blown?
"Viper at 3x risk per month means a return of 7.8% per month and 3x risk is what Viper recommends you have him at. Day Fox at 1x gives you about 7.38% however as much as I would like to put him at 3x he does have a bigger drawdown at 1x risk at -22.91% vs viper at -13.81%. So based on past performance you could have Day Fox at 3x risk and not blow the account and gain 20% per month but that's not a risk I'm willing to take as tempting as it is knowing that could turn $30,000 into $267,000 in just 1 year.
So the moment I saw this I added Day Fox to my account at 0.4 risk (remember 0.69 is 1x risk). Overall I'm keeping him low because I really don't want to risk losing my entire account if they both go into drawdown at the same time. Based on past performance (which doesn't always predict the future) I would still be safe if both of them hit their worst draw down at the same time. Viper 3x would be 41.43% while Day Fox would be around 16% (based on my lower risk with him). So together that is about 56% drawdown. Yes that would be scary but overall the risk isn't too high on my account and I should be safe"
Would 56% drawdown be a blown account?
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