One Day The System Dies

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Hey guys,

As we all know, one day every trading-system will die.

I try to find out a good way/indikator/signal that shows me when its time to switch off my trading-system.

i heard that some algo-traders use a moving average on the equity-curve.

looking forward hearing from you some tips&trick.

Greetings - Luke

 
Algo-Luke:

Hey guys,

As we all know, one day every trading-system will die.

Why ?
 

most trading-systems die (make losses) because the markets change. I think the technical analysis (especially in short timeframes) is a self-fullfilling-prophecy that changes into a self-destroying-prophecy by time.

 
Algo-Luke:

most trading-systems die (make losses) because the markets change. I think the technical analysis (especially in short timeframes) is a self-fullfilling-prophecy that changes into a self-destroying-prophecy by time.

I want to agree with Algo-Luke to an extend. If the system can only die by being struck by lightning, the system will eventually die by being struck by lightning. The only systems which cannot have such a fate in my opinion would be an Arbitrage Like system. Even those don't last forever as the other side either goes broke or becomes aware of the Arbitrator.
 
Algo-Luke:

I try to find out a good way/indikator/signal that shows me when its time to switch off my trading-system.

i heard that some algo-traders use a moving average on the equity-curve.

This article was popular at one point. It deals with what you're looking for.
 
Algo-Luke:
I try to find out a good way/indikator/signal that shows me when its time to switch off my trading-system.
The Trade Encouragement Factor, TEF, and Money Management, MM() - MQL4 forum
 
Algo-Luke:

Hey guys,

As we all know, one day every trading-system will die.

I try to find out a good way/indikator/signal that shows me when its time to switch off my trading-system.

i heard that some algo-traders use a moving average on the equity-curve.

looking forward hearing from you some tips&trick.

Greetings - Luke

It already happened. May 2010. The only way to resolve was turn off the entire buildings...shut everything down, and later got rid of the only trader who started it.

 
Algo-Luke:

most trading-systems die (make losses) because the markets change...

Yes. its a matter of changing strategies as macro-patterns change, so its best to know what conditions are good for your EA..
If you look at the indis below on EURUSD D1 between the vertical red lines (August 2011)

Extended pink-below-aqua shows bad news for trend-following & breakout systems because 'directionality' was low and falling, even though typical daily Hi-Lo amounts were high & increasing, as shown by red-above-yellow
So, within this period, I hope you were all range trading EURUSD!



FWIW

-BB-

PS

If you cant see the uploaded image - try here

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