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Canada’s government ramps up capital spending, keeping deficits low and supporting the BoC’s ability to maintain rates, underpinning the Canadian Dollar (CAD), BBH FX analysts report.

If you ask any professional trader what his number one priority is, the answer would be “capital preservation”.

The retail world is unfortunately 99% just marketing, so the focus is on gains as that is what sells the most.

You should be focusing first and foremost on risk.

The chart above shows you how much percentage gain you need just to get back to even. If you lose 50% of your money, you need to make 100% to get it back.

As you can see, above 10% drawdown, the math starts to work against you.

Ideally, you should keep your drawdown below that mark. You can trade comfortably in the 3-5% drawdown range, but above that, you should start to retrench.

Start reducing your size or get more picky with your trades until you get back on track. Trading when your account is at ATH (all-time high) is much easier than when it’s in a meaningful drawdown. You can trade in attack when you are around the highs, but you need to play in defence when you are in drawdown.

NEVER EVER increase size just to recoup your losses. That’s what kills trading accounts.

Managing drawdowns is critical because it will also define your annual returns. For example, if you make 20% in year 1, 2 and 3, your CAGR (compunded annual growth rate) will be 20%. On the other hand, if you lose 20% in year 3, your CAGR falls to just 4.83%. You can see how easy it is to ruin a track record.

Remember that traders have winning and losing streaks. How you manage those streaks will define your long-term success.

This article was written by Giuseppe Dellamotta at investinglive.com.

EUR/USD remains practically flat on Wednesday, hovering below the 1.1500 level, trading near 1.1480 at the time of writing.

New Zealand Dollar (NZD) recovered after soft Q3 labor data signaled weakening employment, with markets fully pricing in a November RBNZ rate cut, BBH FX analysts report.

Silver (XAG/USD) is posting a frail recovery on Wednesday, trimming losses after a three-day reversal.

Amazon CEO Andy Jassy has been overhauling the company’s corporate culture in recent years, and went even further last week, announcing 14,000 layoffs.

USD/JPY remains around 153.60 as Japan’s on-hold policy stance keeps the pair elevated despite yield-based valuation concerns, BBH FX analysts report.

Slight increase in upward momentum suggests US Dollar (USD) could edge higher to 7.1390. In the longer run, there is scope for USD to test 7.1450, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

A recovery in IPOs and mergers, falling interest rates and the AI boom will all drive a new growth cycle in private markets, according to Preqin.

Many financial advisors recommend rebalancing your portfolio at least once a year, if not more often. Here’s why now may be an opportune time.