This roll-over reminds me a lot like the 2007-2008 period.

APRIL 29th

There are some things to remember when adopting a trading program with monthly/weekly charts (no daily charts with trading decisions limited to weekends).

1. In my opinion, trading weekly bars in the manner discussed above is COMPLETELY incompatible with monitoring the markets during the week (even if it is an end-of-day review). If I were to adopt this approach to trading it would have direct implications on the nature of communications to members of the Factor Service.

2. In that weekly price bars (or closing prices) would determine entry and initial protective stop levels, a 50 BP risk would likely cut in half or more the sizing of trades. My guess (using assumptions not discussed herein) is that net performance would be less than halved and Profit Factor would deteriorate by 30% or so. Marked-to-the-market drawdowns would also increase to 10% or more.

3. I can easily argue that the risk per trade on a longer-term program could be bumped from 60 or so BPs to 100 BPs as long as highly correlated trades are not simultaneously held.

4. Trade management would need to become much more mechanical and rules-based than is my current practice.

5. All significant changes in a trading program have unintended consequences.