What kind of drawdown percentage is reasonable to you ?

Discussion in 'Risk Management' started by joesan, Aug 5, 2007.

What kind of drawdown percentage looks reasonable to you ?

  1. below 5%

    14 vote(s)
    15.7%
  2. 5%-10%

    20 vote(s)
    22.5%
  3. 10%-20%

    25 vote(s)
    28.1%
  4. 20%-30%

    9 vote(s)
    10.1%
  5. 30%-40%

    7 vote(s)
    7.9%
  6. above 40%

    14 vote(s)
    15.7%
  1. Max drawdowns is the FIRST stat I would want to see.

    Hobbyists that are trying to turn 20K into 100K...
    May reasonably tolerate drawdowns in the 20-30% range.
    (Anything more than that... your risk of ruin is almost certain).

    Professionals running a stable million dollar business...
    Might limit drawdowns to 5%... or 10% in the most extreme conditions...
    Otherwise your business is not "stable".

    And over the last 7 years... my biggest drawdown is about 4%.
    Hedging properly and scalping very actively... limits drawdowns to very tolerable levels.
     
    #11     Aug 11, 2007
  2. sporky

    sporky

    I'd have a hell of a time coming back from 10-20% DD.

    5-10% is doable for me, but beyond that I'd have to re-evaluate my strategy.
     
    #12     Aug 12, 2007