Thanks blaubär,

The timeframe I base my trading decisions on is 1hr, but I auto trade these once a day i.e. set my orders with stops and take profits during morning coffee break GMT, and see how they played out after work at US close 9pm GMT.

I perform much better auto trading than manual trading, boredom leads me to over trade. On days off I now still auto trade and spend the rest of my time learning to program zorro and researching trading systems.

On a daily basis I make an average of 4 trades with a max risk per day of 2.5%, so this method is not high frequency, and there would not be a large number of trades in my lifetime, I'd love to be able to calculate statistically at what number of trades would I have to be at to get 20 losses in a row. At that level a drawdown of 40-50%, alarm bells would be ringing.

Yes, I am clear that an automated strategy, that simply takes a fixed percentage of balance or equity including all profits to date will eventually get a margin call as described clearly in the manual.

The bit I'm unsure of is whether the act of stepping influences this. For significant periods (- months) in my method stake sizes are constant, and are constant during drawdowns. A huge issue as far as I can see with fixed % is that during drawdown periods, the winners shrink when you need them to be full sized most. I don't do this, trusting that the win rate and RR will pull me through.

I'm moving towards accepting the square root, but still confused as to how to step the now smaller increases in stake size, if this is safer, can it be applied daily for example in my method and does it apply to all profit ever earned or only the portion since I last increased it.

I am also confused by the lumpiness of equity injections. Yearly I can invest lumps of new equity into my method, at least until I can ditch the day job. How do I do that safely? How is injecting a €1000 extra equity into my account and trading at higher stake sizes any different than stepping up my stake sizes when I have €1000 profit made over the same period.

Perhaps my objective matters here: I want to trade full time. Withdrawing profits makes no sense when I am saving up money to get to sufficient equity so I can trade full time. When the mythical time arrives and I can safely replace my yearly income with trading income, I will be much less interested in capital growth, and much more interested in steady income and regular withdrawals and then could agree fully with your comparision.

If you inherited 10K from your dear aunt and wanted to use it for trading, would you only trade the square root of it?