Quote:
Originally posted by CGM1
What is an acceptable daily drawdown?
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There is no simple answer for this one. Genarally those who trade other people’s money shoot for a smoother equity curve than people trading their own account. How much you risk per trade depends on many factors such as your ratio of winning to losing trades and your risk reward ratio. Aceptable daily drawdowns will vary depending on your timeframe and your tolorance for risk just to name a couple of factors. For a good discussion of all the variables that effect your profitability and ways to calculate what kind of risk is appropriate, read Trade Your Way to Financial Freedom by Van Tharp.