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<p class=MsoNormal><span class=EmailStyle19><font size=2 color="#993366"
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'>John<o:p></o:p></span></font></span></p>
<p class=MsoNormal><span class=EmailStyle19><font size=2 color="#993366"
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
<p class=MsoNormal><span class=EmailStyle19><font size=2 color="#993366"
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'>When we get a signal to go the other way (reverse our trade).<span
style="mso-spacerun: yes"> </span>We’re always in the market, for better
or for worse.<span style="mso-spacerun: yes"> </span>As I have said many
times in the past, we’re contrarian traders who play probabilities.<span
style="mso-spacerun: yes"> </span>We know that we have a certain percent
probability of being in the correct direction of a move.<span
style="mso-spacerun: yes"> </span>For 2000, we’re running about 80-85%
correct.<span style="mso-spacerun: yes"> </span>Again, as you can see
from our family email, we don’t have targets or goals and just stay with the
trade until the bitter end.<span style="mso-spacerun: yes"> </span>In certain
cases, the drawdowns can get pretty heavy, that’s why money management is so
important.<span style="mso-spacerun: yes"> </span>If you noticed on the
chart I posted of our trades from last October, there were two trades, I
believe, where we lost 100% of our equity (margin).<span style="mso-spacerun:
yes"> </span>Even with those 2 trades, we’re up almost 400% on margin in
6 months.<span style="mso-spacerun: yes"> </span>These bad trades are an
example of why we were running a 100% risk of ruin even though we historically
are right 75+% of the time.<o:p></o:p></span></font></span></p>
<p class=MsoNormal><span class=EmailStyle19><font size=2 color="#993366"
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
<p class=MsoNormal><span class=EmailStyle19><font size=2 color="#993366"
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'>Again, thanks to the group for all those money management
suggestions.<span style="mso-spacerun: yes"> </span>They saved our
collective butts twice in the last six months.<o:p></o:p></span></font></span></p>
<p class=MsoNormal><span class=EmailStyle19><font size=2 color="#993366"
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
<p class=MsoAutoSig><!--[if supportFields]><span class=EmailStyle19><font
size=2 color="#993366" face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:
12.0pt;font-family:Arial'><span style='mso-element:field-begin'></span><span
style="mso-spacerun: yes"> </span>AUTOTEXTLIST \s "E-mail
Signature" <span style='mso-element:field-separator'></span></span></font></span><![endif]--><font
color="#993366"><span style='color:#993366'>Guy</span></font><font
color="#993366"><span style='color:#993366;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal><!--[if supportFields]><span class=EmailStyle19><font
size=2 color="#993366" face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:
12.0pt;font-family:Arial'><span style='mso-element:field-end'></span></span></font></span><![endif]--><span
class=EmailStyle19><font size=2 color="#993366" face=Arial><span
style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
<p class=MsoNormal style='margin-left:.5in'><font size=2 color=black
face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma;color:black'>-----Original
Message-----<br>
<b><span style='font-weight:bold'>From:</span></b>
owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]<b><span
style='font-weight:bold'>On Behalf Of </span></b>John Manasco<br>
<b><span style='font-weight:bold'>Sent:</span></b> Tuesday, April 11, 2000 5:06
AM<br>
<b><span style='font-weight:bold'>To:</span></b> metastock@xxxxxxxxxxxxx<br>
<b><span style='font-weight:bold'>Subject:</span></b> Re: Money Management
Stops</span></font></p>
<p class=MsoNormal style='margin-left:.5in'><font size=3 face="Times New Roman"><span
style='font-size:12.0pt'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:.5in'><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black'>Guy</span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:.5in'><font size=3 color=black
face="Times New Roman"><span style='font-size:12.0pt;color:black'> </span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:.5in'><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black'>What
criteria do you use to exit a trade that goes against you?</span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:.5in'><font size=3 color=black
face="Times New Roman"><span style='font-size:12.0pt;color:black'> </span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:.5in'><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black'>John
Manasco</span></font><font color=black><span style='color:black;mso-color-alt:
windowtext'><o:p></o:p></span></font></p>
<div style='border:none;border-left:solid black 1.5pt;padding:0in 0in 0in 4.0pt'>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black'>-----
Original Message ----- </span></font><font size=2 color=black face=Arial><span
style='font-size:10.0pt;font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;background:#E4E4E4;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>
<div style='font-color:black'>From:</span></font></b><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black'> <a
href="mailto:grt@xxxxxxxxxxxx"; title="grt@xxxxxxxxxxxx">Guy Tann</a> </span></font></div>
<font size=2 color=black face=Arial><span style='font-size:10.0pt;font-family:
Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>To:</span></font></b><font size=2 color=black face=Arial><span
style='font-size:10.0pt;font-family:Arial;color:black'> <a
href="mailto:metastock@xxxxxxxxxxxxx"; title="metastock@xxxxxxxxxxxxx">metastock@xxxxxxxxxxxxx</a>
</span></font><font size=2 color=black face=Arial><span style='font-size:10.0pt;
font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>Sent:</span></font></b><font size=2 color=black face=Arial><span
style='font-size:10.0pt;font-family:Arial;color:black'> Monday, April 10, 2000
10:50 PM</span></font><font size=2 color=black face=Arial><span
style='font-size:10.0pt;font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><b><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black;
font-weight:bold'>Subject:</span></font></b><font size=2 color=black
face=Arial><span style='font-size:10.0pt;font-family:Arial;color:black'> RE:
Money Management Stops</span></font><font size=2 color=black face=Arial><span
style='font-size:10.0pt;font-family:Arial;color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='mso-margin-top-alt:auto;mso-margin-bottom-alt:auto;
margin-left:39.75pt;border:none;mso-border-left-alt:solid black 1.5pt;
padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3 color=black
face="Times New Roman"><span style='font-size:12.0pt;color:black'><![if !supportEmptyParas]> <![endif]></span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><span
class=EmailStyle16><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'>We don’t use any stops in
our trading which means that some bad trades can be very expensive.<span
style="mso-spacerun: yes"> </span>Stops will only mess up your system,
unless you used stops when systems testing.<span style="mso-spacerun:
yes"> </span>We don’t use stops in testing our system and we don’t use
any stops in trading it.<o:p></o:p></span></font></span></p>
<p class=MsoNormal style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><span
class=EmailStyle16><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
<p class=MsoNormal style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><span
class=EmailStyle16><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'>Just my opinion.<o:p></o:p></span></font></span></p>
<p class=MsoNormal style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><span
class=EmailStyle16><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
<p class=MsoAutoSig style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><!--[if supportFields]><span
class=EmailStyle16><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><span style='mso-element:
field-begin'></span><span style="mso-spacerun: yes"> </span>AUTOTEXTLIST
\s "E-mail Signature" <span style='mso-element:field-separator'></span></span></font></span><![endif]--><font
color=navy><span style='color:navy'>Guy</span></font><font color=black><span
style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoAutoSig style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3
color=black face="Times New Roman"><span style='font-size:12.0pt;color:black'><![if !supportEmptyParas]> <![endif]></span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:39.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><!--[if supportFields]><span
class=EmailStyle16><font size=2 color=navy face=Arial><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'><span style='mso-element:
field-end'></span></span></font></span><![endif]--><span class=EmailStyle16><font
size=2 color=navy face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:
12.0pt;font-family:Arial'><![if !supportEmptyParas]> <![endif]><o:p></o:p></span></font></span></p>
</div>
<div style='border:none;border-left:solid black 1.5pt;padding:0in 0in 0in 4.0pt'>
<p class=MsoNormal style='margin-left:75.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=2
color=black face=Tahoma><span style='font-size:10.0pt;font-family:Tahoma;
color:black'>-----Original Message-----<br>
<b><span style='font-weight:bold'>From:</span></b>
owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]<b><span
style='font-weight:bold'>On Behalf Of </span></b>Dr. R.BHANJA<br>
<b><span style='font-weight:bold'>Sent:</span></b> Monday, April 10, 2000 11:18
AM<br>
<b><span style='font-weight:bold'>To:</span></b> metastock@xxxxxxxxxxxxx<br>
<b><span style='font-weight:bold'>Subject:</span></b> Money Management Stops</span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:75.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=3
color=black face="Times New Roman"><span style='font-size:12.0pt;color:black'><![if !supportEmptyParas]> <![endif]></span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:75.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=2
color=black face="Times New Roman"><span style='font-size:10.0pt;color:black'>Can
any body give an idea on how to set the exit parameters settings in a system
building exercise. Two things needed to be set "Money Management
Stop" and "Exit Parameters". While fixing the exit parameters
first I am getting good winning trade% and average win to loss ratio with a
respectable profit. But since the drawdowns are more I tried to put the Money
Management stops but here the system got deteriorated. My money management
stops are coming some where around 15% of the entry point to get the good result.
But this is frightening. So I am trying with other set of entry models.</span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:75.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=2
color=black face="Times New Roman"><span style='font-size:10.0pt;color:black'>Can
any body have the idea what should be an acceptable money management stops
people do follow. At what point this stop should be tested during a system
building exercise and while fixing this stop what parameters one should check
(I mean winning % or net profit or drawdown or average win to loss ratio).</span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
<p class=MsoNormal style='margin-left:75.75pt;border:none;mso-border-left-alt:
solid black 1.5pt;padding:0in;mso-padding-alt:0in 0in 0in 4.0pt'><font size=2
color=black face="Times New Roman"><span style='font-size:10.0pt;color:black'>BHANJA</span></font><font
color=black><span style='color:black;mso-color-alt:windowtext'><o:p></o:p></span></font></p>
</div>
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From: "Guy Tann" <grt@xxxxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Subject: RE: Money Management Stops
Date: Tue, 11 Apr 2000 20:25:36 -0700
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Chuck,
While not familiar with your quotation, I thank you for it. When we started trading many, many years ago, all trades were kept in a "deck" on the floor. It wasn't unheard of for a floor broker to sort of thumb through the deck to see where the stops were and then trigger them before taking the market the other way. We use visual stops or mental stops, but try to never use them. An exception would be something like a declaration of war or some other happening not forecasted by the market. Our philosophy is that the market knows more than we do, and everything is reflected in the current market activity. By the time any information hits the papers or the news services, its too late for a trader to use it.
Guy
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of CRLeBeau@xxxxxxx
Sent: Tuesday, April 11, 2000 1:23 AM
To: metastock@xxxxxxxxxxxxx
Subject: Re: Money Management Stops
In a message dated 4/10/00 9:30:14 PM Pacific Daylight Time, grt@xxxxxxxxxxxx
writes:
<< We don't use any stops in our trading which means that some bad trades can
be very expensive. Stops will only mess up your system, unless you used
stops when systems testing. We don't use stops in testing our system and we
don't use any stops in trading it.
Just my opinion.
Guy >>
Sounds familiar.
"I have never used stops, even to bail myself out. Somehow, having a fixed
rule to exit provides my adversaries too great an advantage. " - Victor
Niederhoffer, from "The Education of a Speculator", page 376
Chuck LeBeau
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