Way of the turtle
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Way of the turtle the secret methods of legendary traders PDFDrive
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- Figure 7-4 Large Drawdown Resulting from the October 1987 Price Shock Copyright 2006 Trading Blox, LLC. All rights reserved worldwide. • 95
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• Way of the Turtle Equity Curve - Linear Scale with Drawdowns Total Equity and Drawdowns $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 $3,500,000 $4,000,000 –80% –60% –40% –20% 0% Apr 1984 Jul 1984 Oct 1984 Jan 1985 Apr 1985 Jul 19 85 Oct 1985 Jan 1986 Apr 1986 Jul 19 86 Oct 19 86 Jan 1987 Apr 1987 Jul 19 87 Oct 19 87 Dec 1987 Figure 7-4 Large Drawdown Resulting from the October 1987 Price Shock Copyright 2006 Trading Blox, LLC. All rights reserved worldwide. • 95 • the greatest source of anxiety for new traders. They encounter a drawdown and then begin to question their methods: “Did I do something wrong in testing?” “Did the markets change in some way that makes my methods invalid?” “Is this going to continue?” Ways to mitigate the risk of system death will be discussed in later chapters. Unfortunately, however, since the markets are dynamic and are composed of many other participants, it is a reality that mar- kets change, and this can affect the results of systems and methods that previously worked; sometimes those changes can be perma- nent. One of the ways great traders distinguish themselves from average traders is by their ability to adhere to methods that others have tired of and discarded and be successful with them. This consequence that certain market participants stop trading with certain styles because they believe that those styles no longer work has an interesting side effect for trend followers. Every few years trend- following traders experience a period of losses, and inevitably some expert will announce the end of trend following. This usually coin- cides with a large withdrawal of money from trend-following funds. As more and more money flees from trend-following strategies, those strategies start to become profitable again, often spectacularly so. At least three or four times since the Turtle program began someone has made the claim that trend following has ceased to work. I always laugh at this, knowing that profitable markets are most likely quite near. Download 0.94 Mb. Do'stlaringiz bilan baham: 
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