This is not the first time I have come across the opinion that over a long period of speculation on stock exchanges, the average annual profitability of a successful manager, usually, does not exceed the maximum drawdown for the same period. Вот и сейчас смотрел video одного успешного управляющего, confirmed this thesis. I, based on historical tests of profitable systems, would say, even, that the maximum drawdown is one and a half times greater than the average annual return.
If you believe this,then with the naked eye you can see what profitability is real with successful trading in relation to the attitude to risk. If the trade is very risky and drawdown is allowed 30%, then the average annual return, respectively, turns out to be about 20%. But hardly anyone wants to risk a drawdown more than 15-20%, and this is profitability 10-15% in year.
I constantly read about the rather modest, according to the authors, trading systems giving an average annual profit, for example 250% in case of drawdown 5%. But I read this and 5 And 8 years ago, and the authors of such systems over the years did not get into Forbes magazine as billionaires. Furthermore, are still trading on the RTS with a deposit 50 000 rubles at best, and at worst, they advocate a modest salary as analysts for various `` forex clubs ''. And all why? because, based on the above thesis, average annual profitability even in 66% fraught with drawdown 99%, that is, the loss of all money, even with successful trading. Just miscalculated the risks.
It still happens, write that they have been trading for several months, have already earned interest 500, and drawdowns, at all, did not have. But if you ask such a trader" how many years has it been in the market, he will answer — years 5-10-20. To the next question — and what is the average annual profitability over these years, we usually get the answer that we have not yet recaptured the losses received in previous years…… Comments are unnecessary here.
Note that all of the above applies to diversified trading.. Astrological-numerological divination on a single instrument is not even discussed.
