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Hi Frank,
I think you miss the point. It's not the trading system I follow blindly but
my money management system. BUT, the success of the money management system
can only work with a truly mechanical system trading system. Everyone has a
trading system to sell but no one sells a money management system because
that's how the real money is made and kept. Do not make the mistake of
thinking of them as one combined system. They are 2 distinct entities with
money management being the dog and and a trading system the tail.
And, unlike many others I do think there are alot of good trading systems
being sold in the public area. MIRAT may be one of them but I've never heard
of it until now. Howard Bandy said it is a true mechanical system so it just
may be worth a look. You've followed it so please give me hint as to how it
works.
One more thing you'll discover when you have a good money mangement system
in place is just how much capital you need to trade the trading system
properly, usually 10x-15x the size of a position. So I buy into the
arguement that people will sell a good trading system just to raise trading
capital. If you have the modest goal of wanting to make $30k a year income
from trading stocks you better have a trading account worth at least $300k!
At this level most individual would-be traders would just rather put that
kind of money in the bank and retire.
The need for ever larger amounts of trading capital is the single biggest
reason why investment banks merge. They don't expect to hit home runs, just
a lot singles. And it's no secret that to be a proprietary trader with these
firms today you almost have to have a Phd in math. They run their
propreitary trading operations using the methods I've described just like a
business, with budgets, cost controls, profit management, etc. just like
your local McDonalds franchiser. And like McDonalds they expect (not hope
for) regular planned profits from there invested resources. Why shouldn't us
little guys run our trading businesses the same way?
best,
rick mortellra
Tokyo
PS. for those who care the Nikkei is DOWN 600+ at the noon day break.
-----Original Message-----
From: Frank B. Gaylord <fbg@xxxxxxxxxxxxxx>
To: metastock-list@xxxxxxxxxxxxx <metastock-list@xxxxxxxxxxxxx>
Date: Tuesday, October 28, 1997 8:00 AM
Subject: Re: MIRAT and systems in general
>
> Agreed that MIRAT is only a tool and that, really, it is between our ears
>that quality investment/trading decisions are made. I've heard it said
>that using a "blind" system, one that we follow without even occasionally
>using our better judgement, is the best way to go, but that has never
>worked for me. I'd like to find such a system, but I'm not holding my
>breath until I find one.
>
> I'm glad that you brought this up!
>
>-- Frank :-)
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