What's the worst drawdown you can handle?

Discussion in 'Psychology' started by a529612, May 11, 2006.

  1. I can handle 30% drawdown in my portfolio. More than that I'll have to be on suicidal watch. How about you?
     
  2. 5% for the whole capital.

    Trading stops once over.

    My trading style is the "Small lost trading"

    so makes it easier.
     
  3. vikana

    vikana Moderator

    i've sat through 20% a few times
     
  4. Buy-and-hold has seen drawdowns of 30% to 65% in the most recent ten years. It's actually rather fun to grab the data off Yahoo Finance for the Dow, the S&P 500, the Nasdaq 100, the Russell 2000, toss them into a spreadsheet, and calculate the drawdowns. (If you prefer, you can use Total Return series such as SPY etc.). Quite illuminating.

    If your mother can stomach 40% DD's in her B&H IRA, maybe that means you can handle 40% DD's in your actively traded account?
     
  5. 2 or 3% max
     
  6. My worst drawdown was 50% over a period of about four months, slowly bleeding. I was totally off my game. The following six months after the drawdown I quadroupled my account, as I got my act together.

    I'm a pure discretionary trader, and I believe 100% in myself and my abilities.
     
  7. How did you make your comeback? Did you blow everything out and start fresh?
     
  8. -5 % will give me concerns.

    -7.5% will make me feel like a failure and is time to regroup.

    -10% is time to QUIT...
     
  9. ja, that's already sickenin' enough
     
  10. 10% to 30%, depending on situation.

    Normally 10%.
     
    #10     May 11, 2006