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Hi Glen
You're a good mediator. I like that. Let me know what you need, I'd be glad
to help out.
Best regards
Walter
----- Original Message -----
From: Glen Wallace <gcwallace@xxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Friday, July 09, 1999 5:21 PM
Subject: Re: Optimal f
> Walter:
>
> I disagree. Ed is describing the basis for a mechanical money management
> system like Optimal f or most other systems, while you are (equally
> correctly) describing the human factor. I suppose discipline is the key.
> If we are undisciplined, we should not fool ourselves into thinking a
> mechanical trading system or mechanical money management system will
> compensate for our shortcomings.
>
> You do bring up an important point. If we design and test a system and
then
> develop a money management strategy around it, every change we make means
we
> are trading a whole new system and we need to go back to the drawing
board.
> I've done it myself; I struggle to develop a system, then I do my best to
> screw it up with tinkering, rule exceptions and emotion, and wonder why
the
> rules just don't apply anymore.
>
> Regards.
>
>
> ----- Original Message -----
> From: Walter Lake <wlake@xxxxxxxxx>
> To: Metastock bulletin board <metastock@xxxxxxxxxxxxx>
> Sent: July 9, 1999 06:53
> Subject: Optimal f
>
>
> > Hi Glen
> >
> > Re Ed Winter's assumptions:
> >
> > "... The assumptions behind this are:
> > - there is a reasonable expectation that the system you are using for
> > trading can be repeated
> > - the system you are using has statistically verifiable rules
> > - the method of execution is mechanical
> > - you want the maximum growth of the account regardless of the increased
> > risk. ..."
> >
> > These assumptions appear to be logically correct but are simplistic and
> are
> > seriously flawed.
> >
> > The basic psychological process that undermines these assumptions is
> > incremental drift caused by boredom, tinkering, improving, seminar
> > attending, insight, etc.
> >
> > Even though Rick may have 5,000+ closed trades to analyze he would need
> > detailed records to correlate the multiple trading system used over time
> to
> > produce these results.
> >
> > You might also want to check out the neuropsychological literature on
> > unconscious biases which prevent mechanical execution. Here is a short
> > sample:
> >
> >
>
http://www.sciencemag.org/cgi/content/full/275/5304/1293?ijkey=qvmuCiNjPcckE
> >
> > The Damasio's are serious investigators. There are lots of medline
> > references at the end of the article. There are articles available at
the
> > various neuroscience sites for the anatomical sites that are involved in
> the
> > neural networks so that your own "individual" symptom list can be
prepared
> > from your trading diaries.
> >
> > It's always interesting to plot your own trading disabilities.
> >
> > Best regards
> >
> > Walter
>
>
>
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