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Daily drawdowns a function of your monthly/yearly targetted returns. Its really very simple. Leverage, no leverage, if you want to run a fund/money manager, your going to have to attract investors. To do that, you need to show a discipline that you stick to.
If you target a 30% annual return rate thats just 2.5% a month. If your looking to make 30% a year, you have to basically shut down the fund when your down 30% in the year. That means that any month over 2.5% losses you should stop for the month.
If your looking to limit yourself to 2-3% a month, then what is your daily drawdown?
This question depends on what type of trader you are. A position trader, a scalper...ect. So work with 3% a month more than your daily drawdown.
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