2 things I should not do trading this strategy

1. I should not let a position go against me by more than 25%.

2. I should not have more than 2 positions in one sector.

I have been trading this system since 2005, and I will always remember the DRYS trade.

In at 44.  Should be out at mid 30′s.  I was thinking at the time, that this stock could not go any lower.  Eventually  DRYS was sold at $10.

Staying in this loser caused me to not think straight and miss other opportunities.

It caused system underperformance in Nov 08 and Jan 09.

Good thing it only happened once in 5 years.  Since extreme-os system trades with no stop other than a time stop, after this trade,  I will get out of a trade if it goes against me by more than 25%.