Investment Risk Management
Understanding Risk in Strategy and the Impact of Position Size

Our strategy already incorporates advanced risk management, limiting the maximum drawdown to 30%. This is an optimal balance point between return and risk, based on comprehensive research and optimization.

The simplest way to adjust the risk level to your personal needs is through position size.The larger percentage of the portfolio you allocate to the strategy, the greater the potential for return - but also the risk.

Choosing the appropriate allocation depends on many factors, including age, financial goals, investment horizon, and your psychological comfort with volatility.

An example of position size adjustment can be found on pages 28-29.It is important to emphasize that the strategy is in your hands, and the position size and allocation percentage can be customized in the settings to align with your individual preferences, as detailed on page 40.
The Significance of Limiting Drawdown to 30%

Limiting the maximum drawdown to 30% is not an arbitrary figure but an optimal balance point.Research in behavioral economics indicates that 30% is a significant psychological threshold: most investors can emotionally handle a portfolio decline of up to 30%, but beyond this level, the likelihood of making emotional and irrational decisions increases significantly.

It is important to note that 30% represents the worst-case scenario observed during the12-year testing period. Most of the time, drawdowns are much smaller (typically 5%-15%) and are followed by a relatively quick recovery.

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