Hi, One question. Lets take an example. Two set of figures at different times in the same trading system. Max equity = 100,000, Drawdown = 20,000. Drawdown % = 20%Max equity = 1,000,000 Drawdown = 120,000. drawdown % = 12%.
So max drawdown % would be 20% or 12%. I guess 12%, but still confirming.
Max drawdown will be Rs 120,000. But it should be a percentage of max equity before the draw down occured. It is possible that max equity was recorded much later, but you suffered the drawdown on a different equity value.
Mr Sudhin Batheja asks:
How mcuh will the eps of your company go up as you are being paid for the ads. Can't help it as I track the eps of tech companies to arrive at the targets, cheers have a nice trading day.
My Notes: Currently I get enough from google to have two dinners every month, for four people, in a moderately priced South Indian restaurant. If I add a movie to this list, I will know whome to thank.
Mr Bathija also asks:
Based on the intraday setup what percent of the set up were you successful in getting, and how do arrive at the entry and exit levels. Also a word on setting the stop loss for the above.
My Notes: If I understand correctly, 'percent' successful refers to the hit rate. Now the 'hit rate' - percentage of trades that were profitable, is an absolutely meanigless idea. Suppose I have 90% profitable trades that make Rs 1 each and 10% losing trades that lose Rs 10/- each - the system wil be a loser.
Entry is when the oscillator moves up after a sustained decline. I usually enter on signs of strength (above the high)
Exit is after a range expansion. I move my stops below the last low.
Stop loss is below the swing low which is visible when I take the trade.
This is NOT a mechanical system. The first requirement is to have a view on the market. But, like most profitable trading methods, this one works because it is based on a common sense idea - buy dips in an uptrend.
You get better in trading this or any other method by practice. lots of practice. The Americans say it takes about ten thousand hours of practice to reach a level of sucess.