All strategies eventually go sideways to down. Markets change, volatility changes, interest rates change, and fundamentals change. Adjustments have to be made.
With the degradation algorithm, you can almost welcome a drawdown in your strategy. The degradation algorithm is simply Rule 12 from our Money Management Algorithms along with Rule 6 or another combination of drawdown rules such as Rule 8 and 9. We showed this last week in QS II E-mini Nasdaq.
Today, we show how it works on Cobra CT Vb in Tradestation 10.