My spec end breakout system has been in drawdown for 3 months now, while the market is pushing forwards pretty strongly. It's a strange feeling. I've been trading it close to 2 years now and i'm approaching my max drawdown - which is around 13%. Unlike when the overall market is falling, i'm finding it easier to trade correctly, but am more concerned that something has changed and the system is just not working here.
In the past the system has performed well in a rising market and fairly poorly in a falling one, especially a quickly falling one. Since the new year, performance has been terrible.
I'm not at the stage where i'm about to pull the pin, but I am after ideas. If I were to get to -20% drawdown in this sort of market I will need to look very carefully at what i'm doing, and that might mean stopping for a while until it improves.
When is a bad run a bad run? and when has something fundamental to the system changed?
Anyone else finding these conditions strange?