Learn How to Trade Step by Step Secrets to Understanding Profitable Trading in any Market

During the past 5 years I spent over 25 thousand dollars on a library full of books videos and seminars as well as thousands of hours in search of the elusive HOLY GRAIL of trading methods. On this system trading blog you will find the largest collection of system trading articles. I have complied the best tips tricks and tactics from the experts online.

Thursday, May 05, 2005

Trading Tips: Stock Trading Curve Drawdown and Commitment

All stock trading and investing methods must deal with the inevitable drawdown from the most recent peak in one's stock trading curve to a bottom before reversing and making a new high. Seasoned systems traders are well familiar with the drawdown phenomenon and the importance of drawdown as a percentage of annual average returns in evaluating a trading system. On the other hand, many "investors" that follow a "buy, hold and hope" approach to the markets for the long term, don't think in terms of a drawdown when their portfolios drop in value by 10%, 20%...75%, as has happened in the past few years. But what they have experienced is an stock trading curve drawdown.
more..