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Guy;
I definitely don't get it: if you risk 33 % of your capital on each trade, if
you have three losers in a row you are dead. 3% is not a number that has been
picked up randomly . If you test a system with 3, 4 or 5% you will get
differrent drawdowns (with 33% you are going to have a drawdown of 100% very
quickly) and you will choose the one you feel confortable with knowing that
the worst is always to come. You drawdonw will bve a fonction of you edge per
trade but also of the frequency of you trade. A 5% risk may , in some cases
be acceptable if you trade unfrequently.
We are very far from the initial margin.
Jean Jacques
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