Downside Protection

[pistolpt]

What attributes do you all look for in your respective strategies for downside protection?
Besides the typical stop loss.

My trading strategy is longer-term, so I use a moving average overlay over the entire underlying strategy. i.e. if the 10-day SMA of the underlying strategy goes below the 30-day SMA of the underlying strategy it turns off, until the 10-day gets back above the 30-day.

I figure there have to be better tools out there...

 

[abattia]

Quote from pistolpt:
What attributes do you all look for in your respective strategies for downside protection?
Besides the typical stop loss.

My trading strategy is longer-term, so I use a moving average overlay over the entire underlying strategy. i.e. if the 10-day SMA of the underlying strategy goes below the 30-day SMA of the underlying strategy it turns off, until the 10-day gets back above the 30-day.

I figure there have to be better tools out there...

Sorry, is not a full answer to your question, but some related concepts were discussed in the following thread ... http://www.elitetrader.com/vb/showthread.php?s=&threadid=198742

 

[pistolpt]

Quote from abattia:

Sorry, is not a full answer to your question, but some related concepts were discussed in the following thread ... http://www.elitetrader.com/vb/showthread.php?s=&threadid=198742

Interesting thread. I agree with the whipsaw the moving average does on you.
My answer was to cut the moving average to 50%. That way if your strategy does start failing, at least you took some risk off the table, whereas if your strategy goes on a tear, at least you didn't sell everything.