Typical drawbacks are when the market is in sideways non trending phase, the trades dont yeild anything.....entry is on breakout which may be shortlived in a nontrending market.
Smart_trade
Smart_trade
First concentrate on figuring out methodologies on whether mkt will trend or not and then focus on what method to apply. On a trend day anything will work.
This is the greatest drawback of a mechanical backtest, numerous ppl have put reports out like vagar11 who has good backtesting skills and we saw the whole result is skewed depending on the past periods trend and volatility.
Search the web and you'll get elaborate techniques to identify each of the scenarios below .
Trending, Volatile
Trending, non-Volatile
Sideways, Volatile
Sideways, non-volatile
Do note that this is always almost based on news and current developments in global and domestic factors.