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Is it a draw down problem or a basic flaw in the system you are using? You
should be able to analyze the situation and know immediately whether it is you
or the system. You have taken the first smart step and that is to stop trading
until you have found the answer. There are many that just go broke trying to
recover without figuring out what the problem is. There are even those that
double up. Ira
Brian Keith Voiles wrote:
> My daytrading system for the S&P 500 must be in a draw-down... is there any
> data,
> studies, or information in general about how long a draw-down period should
> last? I'm getting stopped out left and right... I've decided to go back to
> paper
> trading until the draw-down period is over -- hopefully I've got enough
> money in
> reserve to cover my butt in the meantime.
>
> Although the last 5 trading days in March didn't work out very well for me
> (that's
> when my draw-downs started) I still made 260% ROI after commissions and
> other costs.
> In February I made a 464% ROI... with just 1 losing day... a loss of $423.
> In January I made an 83% ROI... with just 1 losing day... a loss of $2,020.
>
> Now, here we are in the end of March and April and I've lost 31.7 points
> ($7,925)
> in the last 2 trading days... due to getting stopped out from the
> whipsawing in
> the price movement. (My research shows an optimum stop placement to be
> 4.8 points in the S&P -- Risking $1,200 per trade).
>
> I understand draw-downs are inevitable... but being fairly new to this game
> (just
> under 2 years) I'm concerned because this is how I've been making my living
> for over a year now. Any advice or suggestions are welcomed.
>
> Warmly,
> Brian Voiles
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