Hi guys, hi from Andrea Unger! Today, I would like to bust a myth that is widely spread among traders. In fact, many people believe that there are some techniques and systems that can enable us to create the perfect Equity Line. Unfortunately, this is just a myth.
I must admit that getting a perfect equity line in our balance is impossible. The income will never be that regular and, in any case, it will never be as regular as you want it to be.
There are always up and down moves and we can’t obviously forecast them. In fact, we can only forecast that they will be there, but we can’t tell when. If we could do that, we’d obviously switch our systems off one second before they went into inevitable drawdown.
The point is that the higher the exposure, and so the risk, the higher these up-and-downs, these rollercoasters (as it happens in championships, where up-and-downs are very heavy due to top-level risk).
What we have to be aware of is that these up-and-downs happen. They do happen, and the only thing we can do to face them is being mentally ready, so that we don’t get disappointed when our balance goes down for a period, and we don’t get too much excited when we see a ramp-up in the balance, because sooner or later there will probably be another nasty drawdown.
Ciao from Andrea Unger, see you next time with another post!