A disciplined approach to risk for proprietary firm traders
The Forex Lounge is an independent trading education company. Our first publication, The Arithmetic of Drawdown, explains how loss limits, position size and losing streaks determine whether a proprietary firm account survives. It is available without charge to registered readers.
Publication
The Arithmetic of Drawdown
How proprietary firm accounts are lost
| Loss on account | Gain required |
|---|---|
| 5% | 5.3% |
| 10% | 11.1% |
| 20% | 25.0% |
| 30% | 42.9% |
| 50% | 100.0% |
Method: gain required = loss ÷ (1 − loss). Excludes fees and costs.
The Publication
The Arithmetic of Drawdown
A concise guide to the mathematics that governs a proprietary firm account.
What the guide covers
The relationship between position size and a firm’s loss limits.
How long losing streaks can last at a given win rate, and the drawdown they produce.
Why passing an evaluation and retaining the account afterwards call for different approaches to risk.
Early access to our programme
We are developing a structured education programme for proprietary firm traders. Registered readers will be informed before it is made available to the public.
Reader
Who the guide is for
Traders preparing for their first evaluation
Traders who have taken an evaluation and not yet passed
Traders managing a firm account who intend to keep it
The Forex Lounge does not provide trading signals, copy trading or account management.
Our Approach
Our principles
Risk before strategy
Registration
Request the guide
Provide your email address and we will send The Arithmetic of Drawdown once you have confirmed it.
Company
Founder
Greg Dlugi
Activity
We do not provide
About us
About The Forex Lounge
Company
Founder
Greg Dlugi
Activity
We do not provide
Questions
Frequently asked questions
Does The Forex Lounge provide financial advice?
No. We provide general education only. Nothing we publish constitutes a personal recommendation.
Do you provide signals or trade on behalf of clients?
No. We do not provide trading signals, manage client money or trade on anyone’s behalf.
Is The Forex Lounge affiliated with any proprietary trading firm?
No. We have no affiliate, referral or commercial arrangement with any proprietary trading firm.
How will you use my email address?
To send you the guide and, typically once a week, information on trading risk and our programme. We do not sell or share your details. Every email includes a link to unsubscribe.
