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Article: Debunking the drawdown myth. (Technology & Trading).(Brief Article)
- Article from:
- Futures (Cedar Falls, IA)
- Article date:
- January 1, 2002
- Author:
CopyrightCOPYRIGHT 2002 Summit Business Media. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Properly measuring drawdowns is a difficult task in trading system development, and one that many traders don't give its full due. Here, we'll discuss the right way and the wrong way of assessing the drawdown statistics of trading systems. The conclusions may surprise you.
One of the big battles in trading system development is the battle between drawdown and system robustness. It's important for traders to know the truth about drawdown and how this statistic relates to system robustness and real-world trading. We also will discuss why most system vendors and traders fool themselves over this issue.
A lot of beginners will evaluate a trading system with ...
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