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I consider breakout ATS strategies, especially those that are similar to my BOSS strategy, to be working, robust and timeless trading technique, which I really like and which still remains my current domain. During several years of live trading, I have experienced a couple of crucial situations that you should be aware of since the very beginning because they all are really realistic and can happen to you as well. Two of those I would like to point out in today’s article. If you will be prepared in advance, your trading will be much easier.

Case Study 1: ATS Stagnation

The number of ATS systems in my portfolio, that have been through stagnation, is quite high. It really doesn’t matter which time frame you trade. And it even doesn’t matter how robust the system is or what logic it is based on (I have compared a number of different approaches to automated trading). From time to time, every system will have a period of stagnation and you cannot predict it or avoid it.

How does this stagnation period look like?

On the picture below you can see a typical breakout strategy, build on the principles explained in my ebook called SUCCESSFUL ATS TRADER IN 10 WEEKS. I built the strategy in 2011 and have been trading it live since then. The stagnation period came in August 2013, lasted till December 2014 and looked like this:

As you can see, the stagnation period has really been long and it brings very strong uncomfortable feeling. Especially the beginners in ATS trading automatically expect the strategy to earn money regularly from the first day live. They don't even want to consider the possibility that the strategy might be in the beginning of stagnation period or even in the beginning of a new drawdown! Unfortunately, this is all part of trading (of any trading style, it is not only about ATSs) and you should be ready for it. Vast majority of my systems, which went through stagnation period, have recovered after all and made a new equity high (as you can see on the picture above). The fact that the strategy is not profitable for a couple of months doesn't have to mean that it is not working or that ATS breakout technique is not working as such! All you need is to be patient and have a realistic point of view. The thing that can help you is to diversify your portfolio across the markets and reduce the stagnation period, but it is good to be ready for coming stagnation period.

What have I done RIGHT to be always ready for a situation like this? It is simple: massive diversification across the markets and various strategies. This is the most important rule for stable profits in trading.

Case Study 2: Exceeded Backtest Drawdown

In my trading career, I have learnt a tough true: the drawdowns from optimization backtests serve really just for my basic orientation. I have been through situations when a strategy have created new, higher, historical drawdown.

Such situation you can see on the picture below. It is another classic breakout strategy, which I have been trading live since 2011. As you can see, the strategy had in 2014, which was the worst year in index markets in the last decade, gone through a solid drawdown that exceeded the one from historical backtests:

Situation like this one is really unpleasant and the lesson is that every time when you set up a realistic drawdown, it is important to look at the equity from OOS periods (as we know from SUCCESSFUL ATS TRADER IN 10 WEEKS ebook), or to use Monte Carlo analysis that can offer you more realistic image of what to expect in the future.

And what have I learnt to do RIGHT?

What I do in a similar situation is that in drawdowns like this one I reduce the number of contracts on given ATS.

As you can see on the picture, the strategy has recovered from the drawdown - and that can be applied to most of my strategies that have experienced new historical drawdown. You really need to be patient here and in some cases I decide to replace the underperforming strategy for the one which currently has better results. Such situations are not pleasant, but they realistically can happen so it doesn't make any sense to close your eyes and pretend this cannot happen to you. And again, the diversification across the markets is a really good way how to handle these situations better.


The conclusion of this article is that the holy grail really doesn't exist. I have experienced bad times in all trading areas - discretionary, options or spreads trading. Sometimes I experience them even when trading ATSs. But the ATS advantage is that in the moment like this you don't waste time - everything is automated so you don't have to sit and stare for hours at your computer screen and waste your time, you can, in the meantime, be productive.

This is one of the biggest ATS advantages.

Don't forget that the basic is to have a really quality portfolio.

Happy Trading!



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What others are saying

"Tomas is one of the most creative traders I know. He is able to generate unique trading ideas and elegant solutions to system development challenges."

Andrew Swanscott,

"Tomas has been a professional trader for more than a decade and I have had the privilege of monitoring his accounts in action since 2006. His systems are performing as some of the best I have ever monitored and executed. I have been in the trading industry since 2002 and worked with many developers from all over the world. Tomas is definitely the one to consider."

Martin Lembak,

Systems Trading Expert,


"Tomas is a professional trader, who for the last 10 years has specialized in developing trading systems. We have been tracking his trading systems for about 5 years and they generally show very robust, stable and above average performance. Striker is pleased to work with someone like him - a real professional with enthusiasm and deep knowledge of trading."

William Galwas, President Of Striker Securities, Inc 

"Personal consultation with Tom helped me to re-evaluate the complexity of my robustness testing and optimization processes. Plus, it has helped me with a specific plan on how to take things forward. It has given me some great ideas on how to avoid overfitting and make my testing more robust and provided tips on low hanging fruit in terms of the best markets to trade for intraday/short-term breakouts."

Craig Peters,

semi-advanced trader,

United Kingdom 

"Tom's approach to Automated Trading Strategies design, tests of robustness and portfolio diversification is really unique. He has been a professional trader for many years and the depth of his understanding of Breakout strategies and Market Internals is hard to find elsewhere."

Antonin Fisher,

Hedge Fund Manager,

Czech Republic 

"Tom´s systems and trading approach do really work and can bring good, stable and reasonable returns. I can highly recommend him as a teacher."

David Hruby,

Trader, Czech Republic 

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