An interesting question was raised in the comments of one of the old posts.. Since most readers no longer reread old posts, then I decided to duplicate the discussion in a new topic.
—————————————————————————————-
Question: where is the stop on the entire portfolio of systems ?
JC: That is, on the entire capital of the J.C.? :)
There is no such stop.
Question: if the systems start to merge, then you will not stop trading ?
JC: Drawdowns are frequent, порою длительные. Sometimes individual systems are suspended. Появляются новые.
Question: I will ask differently.
let's say there are now on your accounts 100 USD,and a year later (after the shutdown of some systems and the introduction of new) left 50 USD . in this case, you will continue to trade ?
JC: I.e 50% losses from all capital. I have no idea what needs to happen for this to happen. Even in 2008 year, when there was almost no diversification (only traded stocks), as well as experience, loss of capital during the year reached a maximum of 33%.
Но всякое может быть. I can only say that I have no specific answer to this question.. I will look according to the circumstances.
For example, if this fall in capital occurs due to some catastrophic event, which has never been in history, or was it once in 100 years, then I will continue to trade, because it's not the systems to blame and, in theory, in the future they will earn as before.
It should be noted that I know why my systems earn, what market inefficiencies are used, it's not just a random selection of indicators. And if this inefficiency in the market remains, but systems are methodically merging, then the system must be stopped. For example, strong trends in the market, and the trend-following system merges. It is clear that something has become wrong. Либо, let's say a fantastic situation — a fixed price corridor was legally introduced for all goods — then it is clear that there will be no more trends and it is pointless to trade the trend following system.
All in all, I will look at the circumstances and make a subjective decision.
You also need to consider that I trade with reinvestment.. I.e, with an increase in capital, positions increase, and when decreasing, they decrease proportionally. That's why, if it was 100 Dollars, and a year later it became 50, that is, the capital decreased by 50%, then next year, with a decrease in capital by 50% останется 25 Dollars. Another year 12.5 dollars and so on. That is, capital, in theory, will NOT reset NEVER :)
