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This is an important point. Market conditions change and your system might
fail during a period where the market behavior is such that the system can't
handle it well. You aren't really guaranteed how long this condition will
persist. Your system is theoretically designed so that it either filters
out the market conditions where it doesn't trade well, or limits it's losses
in some way. If your system backtested resulting in a maximum of 3
consecutive losses, that is only a statistical statement about the period
over which you tested it. It can be an indicator of how it will perform
going forward, but this obviously depends on numerous factors like how much
data you tested over, what the conditions were during that period, etc.
Kent
-----Original Message-----
From: Kevin243@xxxxxxx <Kevin243@xxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Thursday, April 13, 2000 9:19 PM
Subject: Re: Money Management Stops
However, trading systems and the resulting trades are not necessarily
independent. I personally haven't seen a system where the trades are
dependent, but I'm sure there are some.
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