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Folks,
I've not read or heard anyone better on Damage Control/Position Size/Stop Loss & Pyramiding than in his book 'The Art of Trading'.
Geoff
Original Message:
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From: Dr. S. Nathan Berger snberger@xxxx
Date: Sat, 21 Apr 2001 18:56:31 -0400
To: amibroker@xxxxxxxxxxxxxxx
Subject: [amibroker] Running Alligators
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<tt>
Steve-<BR>
<BR>
Well, Alligator is emphatically another example of how there is more than<BR>
one way to accomplish a task. And it's so colorful and flashy!<BR>
<BR>
However, since there seems to be many relatively new investors out there,<BR>
allow me to presume to give some advice. I don't know how to program, but I<BR>
have learned a thing or two about how to invest.<BR>
<BR>
One of the criticisms I have seen of Williams' system is that although he<BR>
professes to love the simple approach, his system is needlessly<BR>
complicated. Someone wrote, "Balance lines, awesome oscillators and<BR>
fractals are just moving averages, MACD and chart breakouts in disguise."<BR>
But this is all beside the point. <BR>
<BR>
Technical indicators and elaborate software will not spare you losing<BR>
money. YOU MUST HAVE A SYSTEM OF DAMAGE CONTROL- or risk management as it<BR>
is better known. I traded for many, many years before I started using stop<BR>
losses, for example. Now, the minute I get a fill on a position, I enter a<BR>
stop loss so that there is no way I'm going to enter at 10, clap my hands<BR>
in glee when the stock goes to 20, begin to worry when it drops back to 12,<BR>
and end up praying it will somehow recover when it is at 6 and I'm still<BR>
holding it!<BR>
<BR>
Get a copy of Elder's book, Trading for a Living, by Dr. Alexander Elder.<BR>
Believe me, his system will make you money- as will so many other<BR>
approaches to the market. But his system for managing risk is much more<BR>
valuable than any other I have seen. It will keep you from regretting you<BR>
ever decided to invest in the markets.<BR>
<BR>
And let me thank you again, Steve, (and the rest of you programmers), for<BR>
sharing what you learned about Williams- and the AFL's you and others have<BR>
written- with the rest of us. I know my own trading position has been made<BR>
stronger by being exposed to what you know and what you shared with us!<BR>
<BR>
Nate Berger<BR>
<BR>
</tt>
<br>
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