This tutorial explains why and how using excess leverage (trading with a high Value-at-Risk) drastically reduces a trader / trading strategy's odds of survival in the markets.
We describe with the help of trading strategy examples, how even the most robust of alphas, even strategies with high win-rates can fast turn from winning to losing strategies when excess leverage is used.
We shed light on what levels of Value-at-Risk are sensible, and beyond what VaR it becomes progressively improbable to recover from loss-making periods.
We also discuss how attracting investor capital on the DARWIN Exchange (where investors pay 20% performance fees on HWM profits) whilst maintaining survivable levels of risk, is the most sensible option for serious traders looking to make more meaningful returns from their trading.
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Topics: #darwinex #leverage #var #risk #montecarlo #trading #dleverage
