The three big reasons for trading drawdowns according to renown trading Psychologist Brett Steenbarger:

1)  They’re trading a strategy that doesn’t fit the present market;
2)  They’re trading the right strategy, but their head isn’t in the game and they’re not following their strategy;
3)  They’re trading the right strategy with a good mindset, but they’re employing the wrong tactics and thus not implementing their strategy the right way.

The may be so but I find the  STOP the simplest most effective and reliable way to stop drawdowns.

Oliva Engel of State Street helps fly the flag for us quant managers being the first to win the Blue Ribbon Award for best large-cap fund. She returned 14.5 % against the accumulation index gain of only 2.8%. Well done Olivia. The full article is on the front page of the AFR today 19/8/16.

“Emotions and psychology are the enemies of being a good investor”

“its tough but you have to stick to your creed (trade plan) – if you fall on hard times you don’t change your religion”, he says as investors grapple with an unattractive choice of accepting low returns on taking more risk.

Notwithstanding his wisdom our price analysis approach of disassociating ourselves from fundamental and emotional ‘noise’ and using market psychology to our advantage allows us to generate solid returns even in todays environment. Breakouts and trends still occur.

You just have to make the ‘giant leap’ of accepting and doing what the trading plan tells you.

Have a great day.