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V-Reversal NQ Drawdown Entry Alert


V-Reversal E-mini Nasdaq is one of our top trading algorithms.


It can be traded individually as a subscription:


It can trade for you by a broker through Auto Trade:


It is also included in several of the portfolios of trading systems including the Stock Index Portfolio 11. Portfolios of trading systems offer diverse methodologies.


After making equity peaks on Friday April 17, ending that week with 4 winners in a row, two long trades and two short trades on Thursday 4/16 and Friday 4/17, we went through a series of 7 consecutive loses this week.


Testing the number of consecutive losers over a three-year period we see that there have been 5 occurrences where there have been 7 losers in a row.



The drawdown this week was -9705 per E-mini contracts with the max drawdown the last three years at almost -16K.


We discuss the concept of a drawdown entry alert or buying the dip in the equity curve in this video. We can clearly see the cycles in the equity curve.


Past performance is not indicative of future results.


After a series of winners or an equity peak, there can be a series of losers at some point. The timing of these cycles is not perfect and trying to dodge drawdowns can often times cause us to miss a series of favorable trades.


This week, the market environment was not as favorable for mean reversion strategies such as V-Reversal. Out of the 7 losses this week, 5 were reasonable and acceptable to understand while 2 were more challenging to accept. There was a short trade on Wednesday that was stopped out near the highs right before the market moved lower and a long trade on Friday that was stopped out by 1 point on the lows before moving higher.


These type of drawdown cycles and losing streaks are a normal part of trading and I look forward to trading next week. We like to combine trend and counter trend strategies in a portfolio of trading systems.


This strategy can be traded in Tradestation, Multicharts, and NinjaTrader 8


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