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Imagine someone violating their own system because they want to be right <g>.
I think we all have done that and probably will again sometime.. to be
reminded
once again to follow the system or look for a "sea change" happening to that
market. The recent rotation to the DOW, large caps from some techs and some
foreign markets bouncing now a month and the change in oil prices as a
leading indicator might be a time to review systems or groups to see if they
are still working.
That you all knew that some markets and some systems just dont work at
certain times is something we have a hard time remembering. The "partial
reinforcement" psychology of lesser, but some, rewards causes a
longer commitment to a system, market or group than might be warranted.
This is where the old masters and the real professionals know the last people
still in the fading group are almost like the last in a pyramid scheme and
that becomes a virtual "sheep shearing period" perhaps as that group or
market oscillates downward.
Thanks again for the insight. The "stories" you have are the best way
people learn. And they are fascinating. Again forgive me for prior tone.. I
failed to realize how informative you really are.
Bob S.
In a message dated 4/29/99 2:09:39 AM Central Daylight Time, grt@xxxxxxxxxxxx
writes:
<< (First section snipped to save space)
In the early 70s, we traded a block of 15 different commodities, trading
them long or short as of the open. We were always in the market and would
reverse on the open. System worked quite well for a few years, but then the
mix changed. I'm trying to remember, but I think the 15 commodities we
traded were:
5 grains (W, C, SB, SBO, SBM)
3 metals (Ag, Au, Cu)
3 meats (Cat, Hogs, PB)
4 others (cocoa, cotton, eggs [I'm not sure about the eggs] & world
sugar)
We found that by trading this mini mutual fund of varied commodities, we
were able to spread out our risk and yet generate a substantial return. The
biggest trade I remember making was around 15 units or 225 contracts around
Labor Day, 1974. Actually 450 contracts since we were reversing. Remember
margins were a lot lower than they are today and you didn't have all of the
volatility that you have today. For example, I seem to remember the margin
on world sugar being $2-300 (initial margin, that is). Heck, I've even got
a world sugar trading story from either the 50s or 60s when my dad refused
to believe the market moving against him and he rode 1 contract for a
$150-180,000 loss and then rode it the other way to finally take out
something like a $1,200 profit. Of course, if he would have followed the
system and taken his little loss and reversed, he would have made a couple
hundred grand, but he wasn't going to let the market show him... <G> We
Tanns tend to be quite bullheaded. >>
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