It obviously lowers profitability considerably but it doesn't completely kill it. I'm saying that when conditions for a system are not favorable, it will lose very little or flatline the equity but that's alright because it outperforms when the conditions are right.
That's why trying to know when markets are trending or not is the most important, but also the most difficult, part of building a system. If you know when markets are trending, or not, you have already achieved the biggest part of the job. That part will be responsable for the major part of the performance. Building the rest will be much easier as it is only timing of entries and exits.
I totally agree....especially this:"The system should be adaptive". For example, it needs to adjust for volatility. Small range bound conditions can really prove to be challenging.
Yes, the system runs optimizations (adapts) internally. I don't manually optimize it daily. As that seems to matter to some here. To be simpler: As many have pointed out, there is chop, there is trend, there is flat. A system that optimizes daily can adjust on a dime to such market conditions. Also, it is based on an extremely customized kNN type algorithm that also utilizes machine learning ensemble methods.
Best bet is to get in and trade. Your losses are called tuition. If not able top turn a profit in 6 months, it's best to try your hand ta something else.