Recognizing edge decay before it costs you

Every strategy has a shelf life in theory, so a fair question is: how would you know if SSL6's edge was actually decaying, versus just going through a normal rough patch? Confusing the two is dangerous in both directions; quitting a working system, or clinging to a broken one.

The first thing to understand is that a losing streak is not edge decay. Low-win-rate trend systems produce losing streaks routinely, and a few bad months tells you almost nothing. Edge decay is a structural, persistent deterioration across a large sample; not a stretch of unlucky trades.

The signals worth watching, all measured over many trades and at your scheduled review, not reactively: a sustained drop in expectancy (average profit per trade) well below historical norms; average winners shrinking relative to average losers, eroding the asymmetry the system depends on; and the system's behavior decoupling from the market regime it's supposed to exploit; for example, repeatedly getting chopped even in clean trends.

Notice what's not on the list: a single bad quarter, a scary headline, or a drawdown inside the historical range. Those are normal operating conditions, not decay. The whole reason to define decay signals in advance is so that fear during a normal drawdown can't masquerade as evidence.

Practically: write down, before you need it, the specific conditions that would make you pause and reassess. Review them only at your quarterly checkpoint with a large enough sample to mean something. If none are triggered, the correct action is to keep executing. Pre-committing to these rules is what stops you from abandoning a good system at precisely the wrong moment.