Worst drawdown you can handle?

What's the worst drawdown you can handle that you know you can realistically trade out of and get back to breakeven?

 

20%

 

-33%... really...

 

-40% worst case, but then i expect to see +400% in a good year on the upside too.

 

My worse-case DD the over the last two years was ~15%. I have 5% swings at least a few times per year.

 

The percentages you guys have posted, are these typically "perfect storm" dd's, ie. several plays gone sour at once?

 

In my case, the 5% swings are simply "noise", where nothing is working for a week or two. Happens more than I like, but I don't think it can be eliminated.

The 15% was two nasty currency trades with monster overnight gaps. Took the losses over a two day period. Obviously, I had underestimated position risk as I would prefer to NOT lose close to 10% per position. I usually size each system such that i'm looking at a simulated worst-case DD of ~ 10% across the system portfolio.

Edit: a "perfect storm" for me, would probably be close to 30% DD (based on simulations).

 

One third of my average annual return.