Originally posted by Amadorian
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Originally posted by MrMcmahon View Post
Now you are just assuming .
Or don't you agree that trading with tight stops, trades get stopped out more often?
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Originally posted by Balboa View Post
If he has changed the approach to LARGER TPs and SMALLER SLs whereby the Reward:Risk ratio is greater then 2:1 then we are now seeing a transformation for the better.
But I still think that he should not be trading client funds until he has demonstrated that he can trade this strategy profitably for at least 6 months.
A strategy with high Reward:Risk ratio requires a very strong psychology as you could be losing around 50% to 60% of the times although the losses will be far smaller then the gains.
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Hey guys,
I've received a copy of SteadyCapture's new trading rules to pass on.- Overall maximum allowable percentage of Equity risked = 20%
- Commit to never draw down more than = 22%
- Use of Leverage per trade = Up to 10x Equity / trade
- Total Account Maximum use of Leverage allowed at any given time = 24x
- Maximum number of separate positions allowable at any given time = 14 with no limit on sub trades managed within those positions
- Maximum single position allowable loss = 16%
- Maximum allowable DD within 24 hours = 16%
- Maximum allowable DD within 1 week = 20%
- Maximum allowable DD within 1 month = 20%
- Maximum allowable DD within 1 year = 22%
- All such trades may also employ tighter stops for a portion of the overall allotted position size
- There will now be a more active use of trades using tighter stops and better risk to reward ratios. Such trades will be allowed in any pair or direction.
Jay expects to see trading activity within the next week as the path to recovery begins.
If you have any questions about the info above, please let me know.
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Originally posted by dazz1975 View PostHey Nick. I think this 16% drawdown In 1 day needs some clarification.
This sort of plan needs some layman's talk. Too confusing.
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The daily, weekly, monthly breakdown is what hedge funds do when allocating risk to traders, so he's using that model.
22% is the number that we all care about.
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Originally posted by Nick View Post
The thing that really counts is the 22% total drawdown.
The daily, weekly, monthly breakdown is what hedge funds do when allocating risk to traders, so he's using that model.
22% is the number that we all care about.
I really am struggling to see how the money management in this new plan is any different to the money management on the old plan.
The one positive I see here is the RIsk:Reward of 1:150. However that's a big R:R ratio and very unlikely to be hit.
But my concern is on the 22% max DD. It's a big DD. Good traders don't hit these kind of drawdowns including those that are making 50% ROI per annum.
Secondly what evidence is there that this strategy is profitable. Surely you would have tested it out before selling it onto your clients..
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