Trader X has 10 back-tested and profitable trading systems. He knows the average and maximum drawdown of each system. He start paper-trading each system with live data and when one of the system reaches the average (or maximum) drawdown, he trades that particular system with real money, virtually avoiding any further drawdown. What do you think?
Flawed because markets are "forever" changing. Simply, too many new variables arises multiple times per year that impact market conditions. Another way to look at it (assuming we're not talking about automation trading)...traders that are consistently profitable from year to year is because of their ability to adapt to those new variables. In addition, there's more to profitable trading than just trade signals. This is something newbie traders have an extreme difficult time in understanding because they're too fixated on trade signals.
Sorry but markets do NOT change over the years, they go up, they go down and they go sideways, that's all they have been doing since day one, open any chart (even a 100 year old chart from the US stock market) and see for yourself. Sure, some years are more volatile than others, but we all know that already. Quite the contrary, I can show you trading systems that are still profitable 30 years after their creation, using the same exact simple trading rules on 30 different commodities.
People who obsess over drawdowns are risk-averse. IMO risk-averse people make poor traders. Trading is inherently risky and it favors the risk-seeking and the risk-neutral. JMO The goal should be to maximize net-profits, not minimize losses. Profit maximization will involve some risk reduction but the only way to eliminate risk is to not trade at all