Drawdown Control is Essential for Compounding Efficiency

We pursue what we refer to as "drawdown control" through individual position risk management, portfolio heat limits, and portfolio hedging for risk mitigation. 

Compounding efficiency isn't about how much we make—it's about how much we keep compounding.

If we start with $1,000,000 and compound at 10% annually, in 10 years, we’d have $2.59 million.

But take a -50% hit early on—it’s down to $500,000.

Now compound that same 10% for 10 years…

You end up with only $1.29 million.

That one drawdown cost $1.3 million—and a full decade of progress.

That’s the hidden cost of large losses: not just money, but time, momentum, and optionality.

Asymmetric trading systems structure trades with drawdown controls so we don’t need to recover—because we never fall that far to begin with. 

It's a core concept of ASYMMETRY^®_.