Trading drawdowns are always frustrating but inevitable for all traders. A drawdown is how much your account falls from the peak before it recovers.
Today we are going to look at the October Stage 5 trading results of Xue Jun Zhang, who secured 3rd place with a triple-digit return of 101.89%. Please note that trading is risky, and you can lose more than what you start with.
During this incredible month of trading, Xue Jun Zhang had a 23% drawdown, knocking the account down $914.16 in two trades on the China50 index.
Let's take a recap of the leaderboard from Stage 5.
Stage 5 saw three traders generate triple-digit returns, which has been a strong theme in every Stage this year. Every single month we've had three traders with returns in excess of 100%.
Xue Jun Zhang had one of the smoothest equity curves of all traders in October.
You can see there were only a few small 'blemishes' in terms of consecutive losses, and with respect to the size of all trades, they were relatively small.
The significant drawdown stands out, hitting a maximum of 23% across two China50 index trades, but you can see how swift the recovery was.
That drawdown was followed by 38 consecutive winning trades.
Once again, the number of winning trades is consistent among those who win or place high in the monthly results.
Xue Jun took 114 trades and won on 93% of them.
Not an easy task, given how volatile the markets were in October. And not just volatile, but choppy too.
There were no 'easy' trends to trade, making life difficult for all traders last month.
One statistic Xue will have to monitor more closely is the size of his average loss. At $201 relative to his average win size of $74, you don't want that to get out of control.
It is extremely difficult to get a win percentage at 93%, so if that figure drops and the same average win and average loss size stays similar, it will be a completely different result.
Below is a snapshot of the different instruments traded and how frequently he traded each.
Let's take a look at his best trade on Gold in October.
Xue tended to hold positions overnight but was willing to close positions earlier if needed.
Xue appears to be trading a reversal style system on this Gold trade, selling strength as Gold appeared to be topping out.
It's hard to grasp the style of exit he uses, as Gold fell heavily then rebounded.
But he was open to letting the trade run in his direction, waiting a full day before closing out his best trade.
It's never nice bringing up the worst trades, and hopefully, Xue isn't reading this blog.
But as you can see below, Xue was offside on the China50 trade immediately.
Clearly, there was a big announcement out over the weekend, and Monday saw the index rocket higher.
When looking at lower timeframes, Xue tried to sell the overbought position, but the move's strength saw the index continue rising rapidly.
With a cool head, Xue waited to see if the move would reverse but had to close out on the next trading day, as noted in the chart.
Hopefully, you have been benefitting from the trading statistics and breakdown of the leaders' charts.
They genuinely provide insight into their trading style, how they manage their positions throughout the month, and so much more.
The first thing you can do is start recording your stats. You can then begin comparing to see how they align with those of our champion traders.
Remember, MT4 and MT5 provide all these trading statistics for you, plus an equity curve of your custom timeframes.
Be sure to grab this data regularly and review your results.
Are you ready to join the next Stage? Click here to register an account.
Ashley Jessen is the author of CFDs Made Simple and Chief Operating Officer at ACY Securities. He has been in the financial services industry since the year 2000 and worked for some of the leading companies in the CFD, Forex and Online Trading space.