DD's will blow up your account eventually?
The drawdowns from any trading system will blow up the account if they're not managed.
In the example you show the robot was instructed to start searching from the 4 hour time frame and only take short trades. It entered a short phase on the 4H, between the two vertical lines, and looked for trades within the 1H, it entered following the two blue counter trends when the first red bars resumed. The red arrows he placed on the chart are deceptive because that isnt the entry point. It did not enter on the high point, it entered on the first red bar which is well off the high.
Its not necesary for all the bars to be red. If we're trading the 1H, the weekly and monthly have little influence over the short term action. They're additional confirmation of a longer term trend, and useful if we decide to hold a position.
I still think this system is totaly workable. You just need to decide on a workable exit strategy. Such as a t/p and a stop exit on a color change. This would limit the all of the drawdowns, but might also increase the number of losses. Depending on how well confirmed the longer term trend is the stop exit can be adjusted to match. |