How to reduce drawdown?

Discussion in 'Technical Analysis' started by mrman500, Jan 6, 2009.

  1. I have been getting killed in oil since Christmas although it has not broken my m.a.. How have you handled drawdown in your system?
  2. MM 500;
    Several ways to reduce DD, I am interested in most of them;
    even if it means giving up some % gains.

    a] Trade smaller/less leverage[epecially since ''getting killed since Christmas!!'';
    [looked on 1 yr crudechart,3 years-USO....................................]

    b] Not in a strict mechanical way;
    but PSAR helps,with discretion. But since you said system-Parabolic stop and reverse has reversed ,mechanical signal on 12-31/end of day signal, still long/ bullish .
    50 dma still in sell signal, so get more measures,than that helpful ma.

    mm] More ways;
    but wisdom is- best to do your own research.:cool:
  3. Read Goldmans Sachs oil coverage and trade the opposite way of their recommendation / works ! :D
  4. ==============
    Speaking of trade/fade [opposite], i keep plenty of ma/trendlines on my chart;
    daily USO chart actually has a mechanical PSAR [dot sell signal,on friday] Incorrectly wrote it was still a [psar ]buy

    But as reported correctly earlier, i dont use it mechanicaly;
    USO already has gone down 4 or 5 days in a row,
    simply wouldnt sell there ,even if PSAR says sell USO........................................

  5. I seem to recall a $100 oil prediction a couple years ago when oil was at $40... I guess that's a suggestion that works until you bankrupt yourself and your extended family.
  6. Thanks for the responses. Fortunately, oil has dropped from $50 back to $41. I am now sleeping better.
  7. graintalk


    trading oil is like going to the river boat and having your wife bet red or black!
  8. ammo


    reduce drawdown by reducing # of trades,wait for setups(easier said than done)