Just the opinion of a rusty student, who used to study these things at the University (around 10 years ago), then focused almost exclusively on Forex Trading after that.
I think that it is a nice comparison, since this DUNN Capital is not standard for CTAs and is more similar to Darwins.
The main characteristics of it, seem to be:
- High volatility strategy;
- Variable (adaptive) risk.
I guess that the intent is to massively outperform the underlying market, targeting high returns, at the expense of risk.
It is a good setup for people who are trying to build their capital, for people who don’t mind about having a higher risk, for people who focus only on returns etc.
It would be an amazing setup here on Darwinex
I would certainly walk away after a quick look at the PDF.
Something that is more for me: https://investor.vanguard.com/mutual-funds/profile/overview/vwiax
As a trader, I have to be able to go to sleep at night with peace of mind. As an investor, I guess it would be the same.
I wouldn’t say that, in order to keep realistic expectations, an investor should expect drawdowns like 40-50%, not even here on Darwinex.
I would say that you can reasonably expect and accept a drawdown that is half of the yearly return. If you see someone making +100% per year, on average, you can reasonably expect and accept a drawdown of -50%, just as a generic guideline.
It depends on too many things (ability of a trader, strategy used, markets traded etc.) to give a detailed guideline.
Of course, all of this is provided that the trader knows what he’s doing, otherwise no matter what, you should always expect to lose all your money
At the end, in terms of numbers, I think that the drawdown that HFD is having is quite normal, considering the profits he made so far.
What worries is the risk structure that comes out of the candlestick chart. A very marked tendency to recover every single bad trading day/week as soon as possible (this should also explain the incredible number of positive trading months).
Just my opinion, I think you know much more than me on this stuff