Let's say you have a trading strategy S. Even the best trading strategies tend to have a limited lifespan. What parameters can be used to determine that the strategy S is diverting from it's historical backtest performance, is no longer in sync with the market and should be stopped?
Few of the options can be :
1. S hitting its historical max drawdown
2. Net absolute loss
I apologize if this question has been asked before.
That is the one million dollar question: ¿When should one trading strategy be stopped?
When to quit a strategy is all about trading. Bibliography is hugh but here you are a simple and practical aproach:
https://www.financial-hacker.com/the-cold-blood-index/
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