Hogwan's Forex Trading

In back tests you’re unlikely to pick up the worst possible eventuality and so most times a foreign exchange trading course will recommend at least doubling the drawdown that you find. In this situation that would come to 70% so the account would survive. If a run three times as bad occurred, our account would be wiped out. So having done a calculation like this, you may take a different view of what your risk per trade should be. Clearly the % losses during that bad run are going to rely on how much was lost per trade. Reduce that, either by moving the stop loss or reducing the number or size of lots, and you will reduce the losses during the bad run. Naturally you may also reduce profits that way there is, however, no point taking big risks to make gigantic profits if the result will be that at some point your profits and your original investment is wiped out. This foreign exchange trading course article helped you do that with the tenet of drawdown.