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It is my belief that a breakout as an entry is a very poor entry per se when assessed over all market conditions, significantly underperforming random entry in profitability and drawdown.I believe this is partly because it is known to be a very popular entry trigger and partly because there is a strong tendency towards mean reversion after a breakout.Note that the above statements are NOT mutually exclusive of a statement that breakout systems can be very profitable - it's just that they can be profitable DESPITE the entry, not BECAUSE of it.
It is my belief that a breakout as an entry is a very poor entry per se when assessed over all market conditions, significantly underperforming random entry in profitability and drawdown.
I believe this is partly because it is known to be a very popular entry trigger and partly because there is a strong tendency towards mean reversion after a breakout.
Note that the above statements are NOT mutually exclusive of a statement that breakout systems can be very profitable - it's just that they can be profitable DESPITE the entry, not BECAUSE of it.
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