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The Degradation Algorithm

Posted by David Bean on

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.


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