An over-leveraging example that will shock you | Real-world Trading
This episode features a simulation of the leverage-risk relationship, using real data from the trading track record of one of his own trading strategies.
Over-leveraging can destroy a trading account even when using a consistently profitable strategy — this simulation shows exactly how.
Even though this strategy has performed consistently well over the past five years, the simulation shows how progressively increasing leverage can ultimately destroy a trading account.
The simulation tests progressively higher leverage levels to pinpoint exactly when drawdown becomes unrecoverable — powerfully demonstrating why over-leveraging is one of the most common and most avoidable causes of trading account failure.