EES FX 2.9

Forex Trading and Technology

You are here:: Trading

FAQ

DRS FAQ

What could be the max floating drawdown on open trades?

Author:: Rajesh Shetty
Date added:: Monday, 30 November 2009
Last revised:: Monday, 30 November 2009

Hits:: 5631
Rating:
Vote for this:: -
favoured:: 0

Answer

This is a loaded question because it depends soley on the risk settings.Â EES prefers to use DRS in an ultra-conservative manner, in which case (using only these conservative settings) the open drawdown would be limited to 1%.Â The answer to this question depends on the risk used.Â If 2% as a return is targeted, it can be expected to have a 1% drawdown generally and 2% max drawdown.Â DRS usually keeps a floating drawdown but rarely realizes a drawdown.Â That means there is almost always open floating loss in positions but only in extreme cases will it realize this loss.Â It would realize this loss if account protection targets are hit or stop loss levels are hit, due to volatile market conditions.

Category

EES FX Bulletin

EES FX Newsletter

SPECIFIC FOREX RISK DISCLOSURE STATEMENT: BEFORE PROCEEDING, YOU MUST READ AND AGREE TO OR DECLINE THE FOLLOWING INVESTMENT DISCLAIMER The risk of loss in trading foreign exchange markets (FOREX), also known as cash foreign currencies, or the FOREX markets, can be substantial. You should therefore carefully consider whether such trading is suitable for you given your financial condition. Elite E Services, Inc. (Elite E Services) does not control, and cannot endorse or vouch for the accuracy or completeness of any information or advice you may have received or may receive in the future from any other person not employed by Elite E Services regarding foreign currency trading or any managed account information. The factual information contained herein has been obtained from sources believed to be reliable but is NOT necessarily all-inclusive and is NOT guaranteed to be 100% accurate. The content herein is provided on a best efforts basis and is believed to be up-to-date and accurate; however, there are no explicit or implicit warranties of accuracy or timeliness made by Elite E Services or affiliates. FOREX trading involves substantial risk and is not for all investors. Investments or trading in the FOREX markets can be highly speculative and should only be done with risk capital which you can afford to lose and that, if lost, would not change or adversely affect your lifestyle. The high degree of leverage that is often possible in foreign exchange trading can work for you as well as against you. The use of leverage can lead to large losses as well as gains. Managed foreign exchange accounts can be subject to substantial charges for management and profit incentive Elite E Services, and in some cases (Introducing Brokers, Referring Parties) commissions or mark-ups that are above and beyond the ordinary spread generally provided on a trade execution platform. It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets. Performance results may vary due to account size, starting or closing date, the number of positions and/or markets traded and/or other factors. This brief statement cannot disclose all of the risks and other significant aspects of the foreign exchange markets. Therefore, you should carefully review the disclosures contained in this document to determine whether such trading is appropriate for you in light of you particular financial condition. There are also risks associated with utilizing an internet-based deal execution system software application, and computerized trading and money management tools including, but not limited to, the failure of the hardware and software. PAST PERFORMANCE DOES NOT NECESSARILY GUARANTEE FUTURE RESULTS, nor does it guarantee freedom from losses. The information contained herein should not be construed as an offer to buy or sell commodities, futures, securities, or any type of investment. Elite E Services highly recommends that before making a decision, the reader collects several opinions related to the decision and verify facts from several independent sources.

ADDITIONAL WEB DISCLAIMER: ALTHOUGH IT IS POSSIBLE TO PROFIT BY TRADING FOREIGN EXCHANGE, IT IS ALSO POSSIBLE TO LOSE 100% OF YOUR DEPOSIT. MATHEMATICALLY, THERE IS A HIGHER PROBABILITY OF LOSING VS. WINNING GIVEN ENOUGH TIME. FOREIGN EXCHANGE TRADING IS EXTREMELY RISKY AND IS ONLY FOR THE SOPHISTOCATED INVESTOR WITH AN ABOVE AVERAGE UNDERSTANDING OF CURRENCY MARKETS. RISK CAPITAL SHOULD BE USED WHEN TRADING FX SYSTEMS, DEFINED AS CAPITAL THAT ONE CAN AFFORD TO LOSE 100%. ANY INVESTOR MUST CONSIDER THE RISKS OF FOREX TRADING AND DETERMINE IF IT IS APPROPRIATE FOR HIM/HER.