Escon deOjo's Forex

In back tests you are not likely to pick up the worst possible eventuality and so most times a forex trading course will counsel at least doubling the drawdown that you find. However, if a run three times as bad occurred, our account would be wiped out. So having done a calculation like this, you could take a different view of what your risk per trade should be. Reduce that, either by moving the stop loss or reducing the number or size of lots, and you will cut back the losses during the bad run. Naturally you will also reduce profits that way there is, however, no point taking massive risks to make gigantic profits if the result will be that sooner or later all your profits and your original investment is wiped out.

So that the way to respond to losses is to know what can be expected. This foreign exchange trading course article helped you do that with the tenet of drawdown.