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Dimitri,
Thank you for continuing this Thread, It is an important part of any
traders success or failure.
Strategy and Money management are the two most important parts of any
trader's overall plan.
The best entry rule is useless without proper risk control. You can
almost perfectly analyze a developing market situation, find the best
strategy to exploit that situation, and be almost perfectly correct in
your forcast of what that market will do, and yet still lose money if
you do not use proper risk control and money management.
There are so many variables which constitute Money management , that
just pinning it to an Equity curve crossover would be dangerous for most
traders. In the 3 gifs that you have posted , the Drawdowns in the
equity curves appear to be excessive even though the equity curves are
above the 40 period EMA , how do you protect yourself from these
drawdowns ? Are you in that much cash to absorb these drawdowns ?
Anthony
Dimitris Tsokakis wrote:
> Another [interesting] example.Athens SE General Index had a nice
> fitting to the Stochastic CCI system from A [Aug 2000] toB [April
> 2001]. Take the Profits [nearly +60%] and stay in cash.The 40-day EMA
> cross at B is more than clear.The system is no good anymore for a
> quite long period.Slightest attempts for the Equity red curve to
> exceed its EMA were very dangerous until mid December 2001.A new
> fitting period seem to begin and give some interesting profits [+10%]
> till Feb 2002 and out of thesystem again and again.The actual Equity
> curve should point 17000, the equity without this type of management
> is at 7276.The all-season "blind backtesting" has no relation with
> real trading conditions.Any excellent system may change.You should be
> there to stop it, instead of insisting with some fanatism and loose
> the profits and a part of theinitial equity in the name of the holly
> system.Dimitris Tsokakis
>
>
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