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Hi Igor, nice to see another post from you!
I have a question: are you in the market ALL the time or do you consider
CASH a third position?
I mean are you an "opportunistic" trader? One who trades when you see a
good opportunity or is your system a reversal system where you close one
position only to enter one in the opposiste direction?
Thanks for any comments you may have,
happy trading,
Herman.
At 02:05 AM 10/23/01 +0200, you wrote:
>Hy,
> First off all i would like to appolachise for my english...
>After reading this i feel i have to answer (again)...becauese your approach
>is completaly wrong....
>Like i placed in my previous mail...i made this year 1.800% ( this year)
>profit on real trading...no backtest trading!!....so i CAN NOT understand
>that some people still ask the question....do trading systems exsist.....
>I 'm gonna try to explain (again) that they do....and more than a bit....!!
>BUT....most off you people look for a kind of a kitchenrobot or blender
>where you can put 2000 stocks / day in..... and that a system would give
>you buy and sell signals on each stock ..Forget this aproach....!
>If you build a system on the XETRADAX ,Eurostoxx50, DJIA, Nasdaq100 and
>S&P500...you have the whole western world captured in 5 indexes....so if you
>can build a system (witch i did) on those 5 indexes ...why would you botter
>on a system who generates a signal on EACH individual stock?????..That is
>indeed a holly grail who you will NEVER find.....NEVER....because it is
>verry normal if you thake several stocks..that 1(one stock) will raise
>60%..and that another stock will drop 45 %. that day... So there is no 1
>fomula who can handle those differnces in movement.....( sorry there is..but
>what will give you like 15% on year base....) for that kind off money...it
>is better to become an All Bundy...
>I whrote also in a previous mail ...that i like simpel things.....if you can
>catch in 5 indexes the whole western world....is that not a simple thing to
>work on....I know...many off you will say...what can whe do whit a system
>like that....Indeed you can't do anything with it on individual stock....but
>with futures on each of those equity's ....i can assure you...that you could
>make verry verry high profits.....So start buylding systems on things who
>make it possible....and not on something you would like to work it on....
>Unkown = unloved....
>Greetings Igor
>
>igor.devisscher@xxxxxxxxxx
>
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>----- Original Message -----
>From: "Erich Kohlhofer" <KohlhoEG@xxxxxxxxxxxx>
>To: <metastock@xxxxxxxxxxxxx>
>Sent: Monday, October 22, 2001 9:12 AM
>Subject: Newbes, mechanical systems, expectancy, etc.
>
>
>> Hello fellow traders
>>
>> I don't post very often to the list, but some times I like to throw a
>> few ideas around. I have been trading actively for about ten years, and
>> for the last three I have also included mechanical trading. Let me
>> assure you, it does work. As they say, 95% of traders loose all their
>> money within 6 to 9 months, or have to add extra money to their trading
>> account. I have been able to live and purchase my house out of my
>> trading account, so that should account for something.
>>
>> I have done extensive work to crack all the MS experts. None of them
>> can be used without discretion. i.e. they will lose money in the long
>> run if you just trade them.
>>
>> For example, someone asked about expectancy. Let us take a rather poor
>> system like the MACD crossover. Over say a sample of 2000 charts, the
>> system may give you say 8 correct signals out of every 10. Looks like a
>> good system doesn't it, I mean 80% right, you cant loose.
>> WWWRRRROOONNNGGGG.
>>
>> This is the point that most newbe traders miss. The system may be 80%
>> correct, but have a look at what your commissions do to the system. Many
>> of these profitable trades are not actually profitable. Now in reality
>> the system only becomes about 25% correct. BTW a system can only make 1
>> good trade out of every 10 an still be profitable if your losses a very
>> small on the poor trades and your profit enormous on your one profitable
>> trade. This is what is called expectancy. Although, I have never seen a
>> system like this. All my systems that work are about 55% to 75% right.
>>
>> Carrying on with MACD, if you use it without discretion on the entire
>> US market, it works out to be about 23% negative. i.e. you will loose
>> 23% of your money in 1 year if you use 2% commission charges.
>>
>> This same argument goes for most of the MS experts and systems, some
>> are far worse, i.e. 225% negative. As I always say, it takes 5 years of
>> study to become a doctor plus 2 years internship. Or 4 years to become
>> an engineer plus 3 years practical. The same goes for trading. Don't
>> even think that you will be any good after 6 months, this is not going
>> to happen, never mind what the advertising bumpf says. Remember 95% of
>> traders (not newbes only) loose their money.
>>
>> As you can see, I have said far to much already. The trading game is a
>> zero sum game compared to an index. If you are doing better, you are
>> taking money from someone else. And this is the point exactly, the
>> market needs a constant supply of newbes to take money from. This may be
>> in the form of books, courses, software, etc. MetaStock is a great
>> package, you must just learn to use it correctly to your advantage.
>> Study a few good trading books (van Tharp, Elder, Gary Smith, Kaufman,
>> Bollinger), learn something about statistics (this is more important
>> than you may think), but best of all; if you can pick a good traders
>> brain, even if you have to pay for it, it will vastly improve your
>> trading.
>>
>> Erich
>>
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