Monday, June 25, 2012

More on Alligator drawdown

The chart below shows the backtest equity curves for ESCombo 1.0 and 2.0. They may be instructive relative to the current Alligator drawdown. The ESCombo 1.0 development was finished in 2009, but there was a pronounced drawdown at the end of equity curve back then that I was unable to get rid of. This was somewhat disappointing, but eventually the system started to move up and it became publicly traded in 2010. It didn't do much for a while, but then moved up, but within the past year it experienced a it's biggest drawdown ever. Since then it has moved back up to make a new equity high just recently. This kind of thing could easily happen with Alligator, so anyone contemplating getting off the train might find that things got a lot better after they did. Obviously, no one knows, but these things do not move in a straight line. Everyone must decide on their own what is the best course of action, and live with the consequences.

No comments:

Post a Comment