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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Jeff and all,<font size=2 color=black
face="Courier New"><span style='font-size:10.0pt;font-family:"Courier New";
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Larry Williams has posted an article of his on what
stops mean for systems at<font size=2 color=black
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<font
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"Courier New";color:windowtext'>http://www.adest.com.au<font
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>It agrees generally with your conclusions and comes
up with more.<span
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Date: Mon, 19 Mar 2001 16:01:33 +1000<font
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>From: "Jeff Ledermann"
<j.ledermann@xxxxxxxxx><font size=2 color=black
face="Courier New"><span style='font-size:10.0pt;font-family:"Courier New";
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<font
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"Courier New";color:black'>Subject: RE: Profit Stops<font size=2
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color:black;mso-color-alt:windowtext'>
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>>...<font size=2 color=black
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>> we have now.
Certainly you're not suggesting having the courage to go<font
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>> without a stop will be best, so I think I'm
missing your point here.<font size=2 color=black
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<font
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"Courier New";color:black'>><font size=2 color=black
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>> Sincerely-<font size=2
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>> Ron Scott<font size=2
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color:black;mso-color-alt:windowtext'>
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>I think the word you should have used was stupidity
not courage :)<span
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Dave is sort of right - test it for yourself if you
don't believe this.<span
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Almost every system will show lower profits with
stops and profits will<span
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>decrease as stops are made tighter.<font
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"Courier New";color:black;mso-color-alt:windowtext'>
<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'> <font
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Now the other side of the coin is that tightening
stops (to some minimum<span
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>point) reduces drawdown which means that the equity
required to trade the<span
style='font-size:10.0pt;font-family:"Courier New";color:black;mso-color-alt:
windowtext'>
<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>system decreases. <span style="mso-spacerun:
yes"> This means that with a given account size you can trade<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black;mso-color-alt:windowtext'>
<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>more contracts, which means that as you tighten
stops you make more money.<font size=2 color=black
face="Courier New"><span style='font-size:10.0pt;font-family:"Courier New";
color:black;mso-color-alt:windowtext'>
<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>Obviously there is an optimum stop level where you
minimize drawdown and<span
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<font
size=2 color=black face="Courier New"><span style='font-size:10.0pt;font-family:
"Courier New";color:black'>maximize the winning percentage of trades.<font
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"Courier New";color:black;mso-color-alt:windowtext'>
<font
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<span
style='font-size:10.0pt;font-family:"Courier New";color:black'>Jeff.<span
class=EmailStyle15><span style='font-size:
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial'>
<font size=2 color=black
face=Arial><span style='font-size:10.0pt;mso-bidi-font-size:12.0pt;font-family:
Arial'>
David Hunt
<span style='font-size:
11.0pt'><span style='mso-bidi-font-size:
12.0pt'>http://www.adest.com.au/
<span style='font-size:
11.0pt'>Australians phone: 02 9527 4690
<span style='font-size:
11.0pt'>International: 612 9527 4690
<span style='font-size:
11.0pt'>US Callers phone: 1 312 577
0491 Fax 1 312 577 0491
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