Episode 45: Enduring Draw-Down and the Infinite Time Horizon on Success

by robbooker on May 14, 2012

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An expert in automated back-testing, Chris Davison joins us from the UK to give more advice on how to lose money and to discuss the two elements of draw-down: namely, how your system copes with draw-down and how you personally deal with draw-down.

Rob and Chris clarify the difference between risking 1% per trade versus risking 2% per trade, and they give advice on how to get to the point where you don’t worry when you’ve hit a losing streak. Rob brings us another “Dumb Things That Rob Does” segment, and Chris reveals some interesting findings that have occurred during the Wallabot Millionaire experiment.

There’s talk about how to give yourself “an infinite time horizon on success,” differentiating between investing and gambling, and Chris names the reason why he thinks most people lose money trading — and more. Please join us!

Chris Davison’s blog, where he monitors the performance of several automated systems: Chasing Pips

Understanding Draw-Down:

If you enjoy this episode, we also recommend The Traders Podcast, Episodes 1 — 3: “The Commandments of Automated Trading,” with guest Chris Davison:

Episode 1: Automated Trading Part 1

Episode 2: Automated Trading Part 2

Episode 3: Automated Trading Part 3

{ 1 comment… read it below or add one }

Natalie Pyles May 23, 2012 at 12:51 pm

I am such a fan! I’m not even a trader, but I love to listen to you guys take about trading. Keep the episodes coming guys!

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