drawdown

If you want to run the numbers on drawdown and argue it's better than annuitisation, feel free.

Since its 1988 launch, the fund has lost money in only one year, 1989, which saw a drawdown of 4%.

I don't make 7-figures but I make consistent, steady, low drawdown thousands that add up to a 1%-er income.

The strategy switch was the result of the company's failure to compete with workstation manufacturers like Sun, and the company's rapid drawdown of its cash.

Amateurs tend to be much worse at limiting risk, so while they can win bigger, their drawdown/losses tend to be much higher than the professionals, too.

I lost a bunch of money in Jan - I saw a huge drawdown, discovered a fixable flaw in my strategy, panicked and closed my positions.

Judging from the dramatically lower drawdown and higher performance, it'd be reasonable to assume that the trade decisions made by these algorithms are correct far more often than not, which means technical indicators must have some degree of predictive power.

The more risk you take, the larger your potential profit, but also the greater your chance of a significant drawdown if your system generates a string of losing trades -- as it will from time to time.

This leads into another point, the wording of your post implies that the 'astounding' annual average of 38% net of fees is practically a 'sure thing' when you say that since the fund's launch it took one drawdown in 1989.

- mean-reversion on the second day after an earnings release - you can make money by going short if the stock price rises after the earnings call or vice-versa In the end, what matters is how much risk (volatility, max drawdown...) you're willing to take for superior returns.

Drawdown for the S&P500 is ~7% for the backtest period, and ~0.75% for the paper trading period, while performance is ~20% for both periods.