DislikedI've been looking at posts and trying for solve the issue with huge runs and massive DD and here is what I came up with.
I think I found a way to not only survive, but thrive through a hellish death spiral. Trade in both directions, use multiple limit orders (200+ pips out) to catch big moves and use a 150 pip from average Sl to close all positions and limit losses during a big move. Then when you get a huge move like that September 2008 you make a killing on the winning side and losses are minimal as long as you set up enough limit orders to cover...Ignored
It is the major trend that kills you and you can use FA & PA to help you spot them. And then just stay out of the market.
Fundamentally, these major movements that wipe you out are due to some sort of major world event like a war, 9/11, the financial meltdown of 2008 or the failure of the greeks to form a government back in May. Don't use a ranging strategy when the something big is happening.
As for PA...the key to understanding a trend is that there is relentless pressure in one direction. This means that volatility is low as each time it tries to pull back it is met by new sellers desperate to unload before the price goes even lower.