Keeping the faith in the face of draw-downs

Over on Malcolm Pryor’s Spread Betting Central web site, Gabriel posed an interesting question about how far you should allow yourself to draw-down in the meantime when you think you have a long-term profitable strategy. You can read Gabriel’s question, my response, and maybe join the debate yourself here.

The question was actually in relation to an FX trading strategy, but I think that the question — and my response — are equally valid whatever you’re trading.

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Disclaimer: this posting is for general education only; it is not trading advice.