The relationship between the time a position is open and the possibility of larger drawdowns in continuous systems is direct. As a position remains open for a longer period, the risk of adverse market fluctuations increases, potentially leading to a higher drawdown. Continuous systems, which operate without closing positions early, are exposed to market fluctuations over extended periods. The longer a trade remains open, the higher the probability that the market will move against the position, thereby increasing the potential drawdown.
For example, Joseja 2 Mini Nasdaq operates in 22.9% of the sessions, with a maximum drawdown of $18,020 as of today.
In the case of Gaby Mini Nasdaq, it operates in 57.7% of the sessions, with a maximum drawdown of $40,168.
Lastly, Inception operates in 61.4% of the sessions, with a maximum drawdown of $50,566.
It’s essential to carefully analyze all the numbers before building a portfolio. You should review factors like the maximum drawdown, the percentage of operational sessions, the consistency of profits, and other risk factors. A well-structured portfolio is based on a detailed understanding of how each system behaves in different market conditions and how those systems complement each other. The key is to balance risk with expected performance to avoid unpleasant surprises during critical moments.
Enjoy Trading!
Disclaimer: The information provided is for informational purposes only and does not constitute financial, investment, or trading advice. Always conduct your own research and consult with a professional financial advisor before making any investment decisions. Trading and investing involve substantial risks, including the potential loss of principal. Past performance is not indicative of future results.