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Kevin, JO,
Thanks for these words of wisdom! I hope others will take the time to
read and understand what you posted.
Preston
--- In equismetastock@xxxxxxxxxxxxxxx, kevin243@xxxx wrote:
> JO,
>
> You are absolutely right. I've given up on a very profitable
system, because
> I couldn't
> trade it. I've discovered that I'm only comfortable with price
triggered
> systems where I buy at a certain price and sell at a certain
price. The system I
> discarded was where two indicators crossed that had little to do
with the
> specific price action at the time of the signal.
>
> I'm currently trading two systems on a handful of stocks. You
absolutely
> have to be completely comfortable with the trading systems that you
use and the
> security that you are using it on. I have a system that works
great on OXGN,
> but I'm not comfortable trading OXGN, because of its crazy wide
swinging
> volatility. There are many stocks I'd like to trade, but the
liquidity just isn't
> there. To be successful, both the system and the security must be
> comfortable.
>
> The "Holy Grail" is in money management not trading systems (buy
and sell
> arrows) per se. Good money management frequently has you making
large bets
> within a very narrow risk enviroment for a brief period of time.
You can't do it
> unless you are comfortable with the trading system that you use.
You have to
> be very comfortable betting a half a year's salary worth of
borrowed money on a
> security. (thoroughly backtest something like this before you do it
for real)
> Unfortunately, the software companies seem to feed on this public
desire to
> get the ultimate trading system (buy /sell arrows). I wish the
software
> companies would put more emphasis on money money management
software. (optimal f,
> fractional f, fixed fraction, fixed ratio, etc.)
>
> I think most successful traders are very comfortable with their
trading
> systems or they have a computer or some one else do their trades.
>
> The lessons I have learned over the years is that good Money
Management is
> more important than the trading system you use. If a trading
system that your
> are comfortable with results in a reasonble risk/reward result on a
specific
> security, then good Money Management is the whole ball game from
there. I think
> Money Management, especially the possibility of adapative Money
Management
> systems, is a huge uncharted territory that isn't explored, because
the software
> (tools) just isn't there to explore it. Ralph Vince, in one of his
books
> said, you'll probably be the most leveraged, right at the market
top, when you
> want the least leverage.
>
> Been there, done that.
>
> There is way too much emphasis on looking for a better trading
system. That
> isn't a high priority to me. I'm not saying that buying plug-ins
is a waste
> of time, because maybe you haven't found a trading system that you
are
> comfortable with. But, if you have a trading system that you are
comfortable with,
> explore money management, because that will make a bigger
difference to you
> pocket book.
>
> My two cents....
>
> Kevin Campbell
>
>
> In a message dated 7/11/03 9:20:11 PM Central Daylight Time,
> kelols@xxxx writes:
>
> >
> > On some of the boards, there's been a lot of talk about the
> > trendmedium plug-in that Metastock just released so I got the
> > software and ran a few optimizations. Most of the discussion has
> > centered around testing. I have my own system for testing.
> >
> > Over the last year, I've written a couple of experts that I trade
> > with everyday. They have been tuned specifically for the dozen
stocks
> > I trade.
> >
> > I compared the results from TrendMedium and the resulting experts
> > were pretty good. I find that mine still beat TMs by a few tenths
of
> > a percent, (in live trading, not in system tester or whatever)
so I
> > wouldn't switch to the ones that were generated with TM. I
calculated
> > that against the results from live trades, entry and exit points.
> >
> > The experts I've written are very profitable when applied to the
> > small universe of stocks I use them on. I have written
explorations
> > and they work well in finding stocks that are about to trigger
buys
> > or shorts in my system. But I don't search for stocks because I
make
> > plenty of money just trading the swings on the stocks I trade
> > everyday. Sometimes I trade mutual funds. I wrote a great expert
> > system for mutual funds, but the market is not in the mutual fund
> > mood right now.
> >
> > I would put TM's experts in the top ten percent of the ones I've
> > tested or programmed myself. I have tested over 160 of them, It
took
> > me many hundreds of hours and dozens and dozens of revisions to
get
> > my experts to work as well as they do. You can get ninety percent
of
> > the way there with TM, without the hundreds of hours of work.
> >
> > That being said, I have no clue if you can make money using TM.
If I
> > subsituted TM's experts for mine, I would still make a nice
return,
> > but I can't speak for what other people are trading. When I tell
> > traders what I trade and how I trade, they look at me like I'm an
> > idot, until they find out the daily profit percentage of the
system.
> > I'm a believer in the axiom that you have to trade stocks and use
> > systems that fit your personality and style. I see people on this
> > chat site wanting better ways to search 7000 stocks a night. How
are
> > you going to find stocks that fit your style, if you look at 7000
> > everyday to find 100 new ones.
> >
> > I told someone today that in one of my revisions I programmed a
> > system that worked great on a wide variety of stocks. I traded
with
> > it for a few weeks and hated it. It was dead on, but when you
don't
> > like something, you're not going to make money for long with it.
I
> > started making the most money when I picked stocks that fit me
first
> > and then programmed a system for trading them. It fit like a
glove,
> > and now I actually look forward to trading everyday. While I
didn't
> > lose any money with the other system, I was losing my smile,
which is
> > equally as important as how much you make.
> >
> > TM is not bad. There's a few things I haven't figured out how to
do.
> > The manual is a little sparse.
> >
> > I would buy it and keep it, if I didn't already have optimized
> > experts on my charts. I found Bressert's to be the second best
plug-
> > in, if you need a day trading system and can't write one. I've
used
> > almost all of the Metastock plug-ins. They aren't suppose to be a
> > complete trading system and find all the profitable stocks in the
> > universe. However, they gave me many good ideas which I have used
in
> > my other systems that produce the results I was looking for.
> >
> > I see lots of questions regarding plug-ins and my answer is
simply
> > that asking what's the best plug-in is like asking is a 38 R suit
> > better than a 44 tall. Well, it depends on who you are and what
your
> > size and style happens to be. No one has invented a one size fits
all
> > suit yet either.
> >
> > Good luck!
> >
> > JO
> >
> >
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