So far we have seen that some of us would allow for up to 60-80% drawdown, yet some others would prefer drawdowns to not be larger than 15-30%. We would typically call the latter more conservative.

My claim is that the former have just undercapitalized accounts and that it is almost certain their accounts will get ruined pretty soon. The reason being that they just applied too much leverage, and it's a matter of time before they get a margin call and end with a wiped out account.

If the same streak of bad luck hits the traders from the conservative group, they will also experience a big drawdown, but their account will stand a chance to completely recover from the losses later on, as market conditions improve.

I also claim that account undercapitalization is the reason number ONE why most traders lose money.

To educate further, I recommend a simple "Account Undercapitalization" google search.

I'll finish with a small paragraph from the Tomasini/Jaekle's book (the one recommended on this forum), which I just started reading a few days ago. I don't need to mention that I agree 100% with the following text.

"The average tolerance of a drawdown for most professional traders and money managers ranges from 20% to 30%. Let's say that a drawdown of 10% is a wonderful accomplishment while a drawdown of 30% is much more painful and worrisome. A drawdown of 40% to 50% would be unbearable for most market players."