Trading your equity curve

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Ialwayslearn

What are some considerations when doing this?

What did you use to determine the time frame of the moving average you used on your equity curve?

Has this been sucessful for you?
 
There are probably many interpretations of "trading the equity curve."

My interpretation is when I back test my system to risk 2 % of equity on each position. If I test 30 years of price history the initial account equity might be $ 10,000 but the final equity might be $ 1 million. I want to increase the position size as the account equity grows. Otherwise I might trade the same position size - say 100 shares - for 30 years even as the account gets big.
 
Sorry I was unclear.

What I was looking at is reversing the trade signals of your systems at some point when your actual equity curve crosses its moving average (of x periods) to minimize drawdowns and to go back to the signals when it crosses the MA again.

This would require two calculations as you would need to keep track of your original system's signals and simulated equity curve to determine when your equity curve would cross the MA from the underside again, thus signaling a return to following your original system's signals.

This, of course, would not work with every type of system. Some are better suited to this than others.
 
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