A noob problem for smart algotraders: "Help the noob": I found lots of high win rate strategies but tail losses are keeping me down. Help me how to "prompt" this problem away
This is a noob question.
You found a strategy.
Nice equity curve, high win rate. But there are some losses that take down multiple profitable winner trades. the tail losses.
Everything looks perfect in the mt5 tester.
You go to live. The tail loss shows up . too weird. statistically it shouldn´t be showing up so early.
You got the high win rate but your drawdown is not being respected.
You are a noob. you are still clueless about how to detect "regime changes" automatically.
How do you prompt away problems like this one: high win rates but tail loss ( avg loss y multiple times avg profit)
Have you been in these situations when you found solid strategies but you got this nasty avg loss that not only may eat you multiple profitable trades but it likes to show up more frequently in live than in backtesting mode?