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Tom
You're right as far as you take your calculations. You forget the human
element. First there is greed! One of our problems has been pyramiding and
forgetting that we lose 1 out of every 4 trades. That and the
unwillingness to just take our time (I guess that comes with being old).
As I said, we tend to start doubling up at every opportunity. Then along
comes a loss, and bingo!
Second, there are human emotions and the second guessing of your systems.
We have our own human failings.
Third, we didn't trade last year as I was recovering from some fairly
serious medical problems.
I could dig out our trading records for 1996 though. Impressive. We were
averaging between 20 and 30 percent a month for over 5 months. Great!
Started to believe our own press releases <G>. Kept increasing the
positions (that stupid pyramiding again) and when it finally turned against
us (remember we lose 1 out of 4 trades on average) we managed to lose over
80% of our capital on one trade. Not bragging here, just demonstrating our
own human failings.
Bottom line is stay with your program. Follow the rules without fail (like
we're doing now, hopefully) and you will come out ahead. This year, on our
first trade since my heart attack and open-heart surgery, I screwed up
royally. Had a position in S&P futures. When it went against us I didn't
exit after it hit our mental stops basis close. Lost over 60% of our
capital. My fault, I admit. They say it takes a while for the drugs to
exit the brain after major surgery and 4.5 hours on the heart-lung machine.
Since that time, we are up 100%+ in 5 months, until stopped out of our last
position. Actually, we were up much more than that, but our exit strategy
leaves a lot to be desired. That's why I copied off the exit strategy
thread to review. We managed to turn some very profitable positions into
losses because we didn't take our profits in time. Normally, our system
handles this quite well because we trade so frequently. In this current
market, with the exceptional volatility, we haven't been getting the signals
as in the past (demonstrated by our being out of the market since July).
Anytime you have a 100% return on margin in 3 or 4 days and you don't take
it or you let it run into a losing position, means you need to work on your
exit strategy.
Finally, you forget about taking other investment opportunities. I manage
to invest in other 'guaranteed' money makers. Guaranteed to turn gold into
lead, that is. A lot of money disappears that way as well.
Hopefully, we have learned our lessons and are following our systems.
Hopefully, we will quit second guessing it. Hopefully we won't get greedy
and pyramid. And hopefully the sun will shine and the creek won't rise <G>.
Regards
Guy
Anyway, we plod along.
> -----Original Message-----
> From: owner-metastock@xxxxxxxxxxxxx
> [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Tom Strickland
> Sent: Friday, September 11, 1998 2:12 PM
> To: metastock@xxxxxxxxxxxxx
> Subject: RE: Weekly Pick
>
>
> Guy,
>
> If I read your comments correctly, if you started out with $1000
> you should
> now be worth more than $65,000,000 - probably alot more (1000*2^16)! If
> this is the correct interpretation, please tell me alot more - fast!!!
>
> Tom
>
>
> At 02:00 PM 9/8/98 -0700, you wrote:
> > Dick We know that we're going to be right 75% of the time
> >(at least over the last 16 years). <>. Our system is based
> >upon daily price movement. Regards Guy
> -----Original
> >Message-----
> >From: owner-metastock@xxxxxxxxxxxxx
> >[mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Dick Simmons
> >Sent: Tuesday, September 08, 1998 1:09 AM
> >To: metastock@xxxxxxxxxxxxx
> >Subject: Re: Weekly Pick
> >
> > Hi John, The only indicator that will work in bull
> >trends, bear trends and consolidations is that of cycles. Look
> at poor old
> > Guy, has a great system for bull markets but it is not
> working at
> >present. Cycles go on and on. Regards,
> Dick.
> > -----Original Message-----
> >From: <jhunter@xxxxxxxxxx>
> >To: metastock@xxxxxxxxxxxxx<metastock@xxxxxxxxxxxxx>
> >Date: Tuesday, 8 September 1998 1:31
> >Subject: Re: Weekly Pick
> >
> > Jim, this forum with no positive outcome and
> >you have prompted me to try once again. To me the answer to this
> >question is the most important reason why anyone would use
> Metastock.
> > Take your own system, as I have come to understand it from
> your many
> > very informative postings. When you see a breakout from a tend
> >occurring what indicator or combination of indicators could be
> >used to reliably predictive that the trend has ended and the
> >stock/commodity price will move in a new direction. I have noted
> >you say in a number of postings that you are forced to wait for
> >sufficient information (ie days of trading) to come in
> before you
> >can redraw the new price direction. I have played around
> >with a number of indicators, and different combinations of
> >indicators, with the object of finding a system that
> will reliably
> >signal that and end to the current trend is about to come to an
> >end. For example the daily DOW chart had a stochastic crossover,
> >indicating a sell, in late July and this was confirmed
> by a moving
> >average crossover shortly after this. (These can be
> viewed from the
> >http://www.barchart.com page.) Now I know it is not going to be
> >that easy and so your confusion and my question to the
> group. What
> >indicators are useful in predicting the end of a trend?
> JH
> > -----Original Message-----
> >From: <JimGinVA@xxxxxxxxxxxxx>
> >To: <metastock@xxxxxxxxxxxxx>
> >Date: Sunday, 6 September 1998 4:42
> >Subject: Weekly Pick
> >
> > All, That's still the same this
> >week, but I'm getting mixed signals.
> >......snip..........snip..........snip............snip....
>
> > <>.
> >......snip..........snip...........snip..........snip......
>
> >
> >
> >
> >
>
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