|
PureBytes Links
Trading Reference Links
|
Igor,
I agree wholeheartedly with yr. post, but I think there is more.
Volatility is the lifeblood of a trader. If an index doesn't go up or down,
you don't make money. Furthermore, lets us say, you have built a trading
system which expects a certain type of setup(s), one may well find that
these highly successful setups do not appear as often as one would wish. I
find on indices, that there are days when it just isn't worth bothering. So
it seems to me that one should be looking to trade more than just stock
indices i.e. oil, grains, softs etc in addition. This where a mechanical
system scores over judgmental trading in so far as one can trade more
markets effectively. Just my view on the world.
----- Original Message -----
From: "igor.devisscher" <igor.devisscher@xxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Tuesday, October 23, 2001 1:05 AM
Subject: Re: Newbes, mechanical systems, expectancy, etc.
> 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
>
>
>
>
>
>
>
>
> ----- 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
> >
>
>
>
|