Well I always say to people that one of the biggest challenges of benefiting from this back-tested research is living through the drawdowns.
This is one of those moments! It offers a great test of how you really feel about being in a drawdown and whether you are comfortable with the amount of risk you're taking. If you are feeling extremely uncomfortable with this drawdown, you can consider dialing back your position size for future trades to find your sweet spot (although dialing down your position size lowers not only your risk but also your potential reward).
For me personally, I'm definitely not changing anything. It's almost like the market punched me in the mouth this week, but I'm still standing strong and nothing is going to convince me to get out of the ring. My account is at about a 17% drawdown right now, so this is no joke. But all the research I've done suggests there might be a reward for those who can stick to the plan.
It doesn't necessarily mean that profits are in my immediate future! And it also doesn't mean you have to do exactly what I'm doing. This is what's right for me and my risk tolerances. It's up to you which trades you make.
I picked up Discover today (DFS). I am out of buying power and have a full load of stocks. Once one of my existing positions closes, I'll be able to buy more.
Also, I looked at options trades. They're all too expensive today due to market volatility. The reason I don't like expensive options is that if they go up in price, the payout we get may not be enough to justify the cost of the option. The ratios of risk to reward get out of whack and become more questionable to me.
Both my futures trades from this week took a loss. That had a big effect on my account balance. Those futures trades had been doing well for me, especially coming out of the early March volatility. But there has been a string of losses with them lately. This is not abnormal in any way at this point though. This is stuff that's happened before according to back tests.