Hi Andi and Petko,
your thoughts are much appreciated and very encouraging!
Just a follow up question, please?! My understand is that it all comes down to profit / draw down ratio. I understand that adding more strategies with SL and TP and diversification through uncorrelated assets/currencies will improve my profit / draw down ratio further. But how do you determine your equity need for a portfolio?:
e.g. if I have $10k equity in an account at day 1. Assuming I have a 50% month on month return, I would theoretically have about $1.2m by day 365 (12 months later) assuming I compound every months wins and increase the lot sizes accordingly. If my max draw down would be just 10% more than my equity at day 1, that would not be an issue as I can easily put in $1000 bucks. But if I suddenly need to push in $120k because I have $1.2m in my account, that would mean a margin call.
So how do you determine the required equity for your portfolio across multiple strategies, currencies, asset classes to mitigate a margin call?
Or do you just not increase the lot sizes at the same pace as the account grows to minimise risks but make less return as a trade off?
Big thanks in advance for your thoughts!
Bastian