45% is way too high for intraday drawdown, never mind monthly. 20-25% is the absolute max anyone would tolerate in volatile conditions, 10-15% in quiet periods. You should adjust your position size according to your average monthly drawdown, big difference having a 45% drawdown on 10k vs. 100k.
Thanks d08..now I just have to figure out what all of that means! I am applying concepts that I learned from reading trend following strategies ala the Turtles. As mentioned earlier, I have been using options on corn to profit from moves on corn futures.
Because if I trade their $100,000 profitably and gain their trust, they are more likely to add additional funds. My goal is to manage a million. Securing $100,000 is phase 1 of achieving that goal.
Im sorry to say but your draw down is too much, 45% is crazy. I would not invest with you. Your investors are taking on way to much risk. I have a fund and the worst drawdown is 14% with 35% average return per year for the last 3 years. I specialize myself in reducing drawdown. I really don't care how much profit i make because profit will always be there. The market always gives you profit. One just has to control risk and risk control is the biggest thing that you have to concentrate on. I know friends of mine that have had 200% 400% return in a year but you look at their drawdown and you would jump off a ledge because it is so high. just my 2 cents
big money doesn't care about making money - no they care much more about risk control! your a cowboy with these numbers - so water it down ALLOT and you may have a winner.. de-leverage is all you need to do and your there. keep your max historical drawdown to 4% and you'll have billions. mb
Efranco: have a fund and the worst drawdown is 14% with 35% average return per year for the last 3 years. What size fund and what do you trade. I agree with you. Look for about a 3:1 reward/risk ratio. So a 30% return should be getign about 10% drwadowns. 60% about 20% 100% : 33%+ (would you like this rollercoaster?)