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I don't know that I agree that 33% is unacceptable, here's my reasoning...
I've followed Guy's post for several months, since I joined the list, he
checks for new signals on a daily basis... Therefore, even though he does
not use stops, his signals may indicate a reversal way before a 33% loss is
reached. In the case of a catastrophe he would be out 33%, OK. What is the
likelihood of three catastrophe's in a row, not 3 losses, but 3
catastrophes.
My $.02
Ed Montero
----- Original Message -----
From: <Macromnt@xxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Wednesday, July 12, 2000 6:01 AM
Subject: Re: Re[2]: Risk of Ruin
>
> In a message dated 07/11/2000 11:20:52 PM Eastern Daylight Time,
> joeduffy@xxxxxxxxxxxxxxxxxxxx writes:
>
> << Last year on another list a guy (actually an astute guy, who makes very
> valuable contributions) posted several times that if anyone could prove
they
> made money day trading he would give them $50K >>
>
> Not only I take the bet and I am not talking $50K, but I will also suggest
> for those who have found a great trading system to contact Commodities
Corp.
> or Caxton for instance. Those people know what they talk about and if your
> system pass their test you are really on something. That's how Paul Tudor
> Jones or Louis Bacon have started.
> Personally I am looking for great systems to give the best service
possible
> to my clients (and to make as much money as I can in incentive fees). I
have
> e-mailed privately to Guy to know more about what he is doing. Some
answers
> to my questions go against everything that is widely accepted by the most
> respected people in the industry. A 33% risk per trade is definitely
> unacceptable and shows that the string of losers study has been neglected.
As
> to defining the risk as the initial margin, even if it works this is
> unprofessional and despite Guy's 50 years combined experience looks very
much
> like a beginner thing. It does not mean that there is no good but in my
> opinion there is a lot of work to be done specially on the money
management
> size. Having good signals is very far from been enough.
>
> Jean Jacques
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