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Maximum risk percentage

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Legendary Market Wizard
Chicago Illinois USA
 
Trading Experience: Advanced
Broker/Data: IB, ToS
Favorite Futures: /ES, US Equities/Options
 
wldman's Avatar
 
Posts: 2,744 since Aug 2011
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FWIW..

I don't have a forceful valid objection to the method that you outlined.

If you want to limit max dollar draw down per day, does that imply that you do not carry positions. I wonder if you decreased the number of ticks against you and increased the number of contracts traded if you would be able to swing and give your winners room to run?

The other thought would be to adapt some type of element that takes into consideration volatility, especially in /CL. Perhaps 2X the average true range of whatever period you consider your focus?

Best of luck.

-Dan

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