tom. Again, this is most likely a consequence of the current bear market and the
fact that none of the systems forming the strategy looks to go short.
However, although the current drawdown is quite significant in size, remem-
ber that it is a function of how much we risk per trade, and that it doesn’t come any-
where near the drawdowns of the indexes. Aside from the last few drawdowns gen-
erated by the bear market, the maximum drawdown is only 10 percent, and judging
from Figure 28.11, the most common drawdown seems to be around 5 percent.
STRATEGY 8
Long-term filter: Relative-strength bands
Short-term systems: Same as for Strategy 7, plus the stop-loss versions of
the Harris 3L-R pattern variation and the expert exits system, and the trail-
ing-stop version of the Harris 3L-R pattern variation
Markets: 10 Dow stocks, for a total of 60 symacs
For this strategy, we continue to use the relative-strength bands as the filter, but
substitute the three systems trading the NASDAQ stocks with three more systems
trading the Dow stocks. Thus, we are now trading the same 10 Dow stocks with
six different versions of the systems we have worked with throughout the book. To
the systems used in the previous strategy, we have added the stop-loss versions of
362 PART 4 Money Management
FIGURE 28.12
The drawdown curve for Strategy 8.