Drawdown is a natural occurrence with any trading and should not cause unnecessary alarm. At the same time, we want to be responsible and make educated decisions that help avoid drawdown at the wrong times the lot size you decide along with other inputs will be determining factor of drawdown you experience. A more risky trading approach will lead to more drawdown as a conservative trading style will result in less drawdown.
Here are some factors that could cause unexpected drawdown
- News Events = If the software is running during an Economic News event that can cause high volatility in the market place can result in a higher drawdown experience with the Traide Ringer Software.
- Low Liquidity – When running the software during times of low liquidity; Bank Holidays, In between sessions and Fridays. This is because with low liquidity there is less volatility, which results in smaller movements in the market. When this takes place the software has less opportunity to close profit positions so you may experience more drawdown than normal.
- Choosing settings that cause the trader to make larger trades.