How do you define that a trading strategy DOES NOT work?

Question

Do traders have any particular rules? Let's say, 3 month of negative results... may be certain percentage of loss... I know that each good system may hit bad times. How do you define, what is "bad time" and what is a "bad system"?

Answer 1

Find out what your trading system's draw down is (http://www.investopedia.com/terms/d/draw... If the lows of your drawdown keeps going lower but the highs stay the same, or worse, getting lower too, it's time to make some changes.

Hope this helps.

- Jim http://jsforex.blogspot.com

Answer 2

I am a trader who has built Auto-Trading systems in Tradestation that work.  You must build systems that can deal with all market conditions and all time frames based solely on price/momentum algorithms that can deal with those conditions earning gains on a consistent net basis.  The answer to your question is to continue working with your systems by trading them in simulation until you have built one that makes more gains than losses over time.

Answer 3

Thats a very good question.  I too would like to know.

Very interesting!