With 7 days left in the January forex trading contest, a majority of traders have a negative return on their portfolio.  TJ is in the lead with a return of 25.61% but he also has a maximum drawdown of -37.22%.  Elskid is in second with a return of 19.59%.  I'm still in third with a return of 11.14%.  I lost about 4% today though so third place probably won't hold with RotcaX and Uri close behind.  

Is a maximum drawdown of -37.22% acceptable? I'd say it is mostly because I don't know who could endure such a large drawdown in such a short period of time trading real money.  These are demo accounts so ultimately, who really cares.  I'm not trying to dilute the fact that TJ is performing the best based on portfolio return but I guess when I trade my demo, I treat it as close as possible to how I trade for real.  I don't know, maybe I'm wrong.  Anyone have any opinion on this drawdown? You can view more details of this contest at https://fx2.oanda.com/mod_perl/fxcontest/fxcontest.pl?rm=contestDetails&contestId=482.

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No. 1 :

TJ here. I have an opinion on that drawdown. It is most definitely unacceptable. I put on a xau/usd trade a week or so ago, who knows why I didn\'t put a stop on it and then got involved in my actual trading account and neglected the demo account. This is the first that I\'m hearing about it and fxgame is actually down right now, so I can\'t check on it...Regardless, I would ask that my return is disregarded as it does not reflect how I would trade an actual account. Is there a lesson here? Perhaps, as my accidental approach reflects some principles of trend following, so perhaps there is something to be learned here, but I will admit that I don\'t have quite the intestinal fortitude to ride out a 40% drawdown for the sake of ANY profit. Nor do I think that it is the wise approach even if I did. Though, I will say in defense of this account, that my lead previous to this trade was due to patience and prudence.

Submitted by Forex Trader • 2008-01-26 09:33:25

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