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MG, you've been gone so long, I thought you had been kidnapped and
were being held for ransom until your employer paid it, which of
course I didn't think would ever happen.
Roy, didn't write the post you're referring to. I did--Super. Yes, I
trade. I make a very good living, other than that I keep my track
record to myself because I'm not trying to sell my services. Every
year my trades are audited by my accountants, but that's for the
government and all the paperwork I have to file, not to back up my
trading results to use in advertisements.
I'm not sure what your question is regarding. I promote Roy's
newsletter because there is a lot of basic material in it that makes
using MS easier. Next month for example, he's going to publish a
simple date filter for use in the systems tester. Most people don't
have a clue how to load 1000 bars of data but only test 200 bars of
it. Often an indicator will not work properly if only 200 bars are
loaded. The systems tester doesn't allow for loading more bars than
what's being tested. A major problem for many systems.
In addition, in the newsletter he puts a number of really good
indicators that have been tested by a number of people including Roy
and myself. These indicators are coded correctly. And work as described.
Sites like Kalosz post a lot of code that's not programmed right and
the people who copy it have no idea of the vetting process used to
verify it. In most cases, there was none.
The same is true for Equis and TASC. Sometimes MS code published by
them is not exactly correct.
Roy's code is vetted, tested and re-tested for proper functioning.
That takes a lot of time and experience.
And finally, I recommend the newsletter because Roy has articles in it
written by people who actually trade.
This editorial by the editor of Active Trader Magazine explains it
better than I can.
http://www.activetradermag.com/enote.htm
Over the years I've met a lot of people involved in this business and
the overwhelming majority of those who make a living from the trading
business don't trade, including the gurus. To me that's somewhat of a
problem if they're going to be giving trading advice and selling
trading products.
Roy, to his credit, doesn't give trading advice. He will tell you his
expertise is in the programming.
My expertise is not in the programming. I can program some but I'm not
nearly as good as Roy. Jose and Roy hose me all the time over my
programming skills.
My skill is in risk avoidance trading. I've developed a lot of
strategies, techniques and methods for trading that avoid risk while
still providing a very respectable return. I'm not going to explain
the details about why I decided to go that way. It's all about
probabilities and how to position trades so the probabilities are in
your favor.
Part of trading is luck as your Romanian said. To me the largest
factor in success is knowing the probability of your outcomes,
understanding the degree to which those probabilities can fluctuate
and under what conditions they are most likely to move outside of the
norm, and then developing a strategy which positions you to use those
probabilities in a successful outcome. I agree with your Romanian
friends assessment of TA. To me it's useful, but it's hardly the
ticket to success. I've been using TA for 30 years. I felt that way
when I started, and I still feel that way. I first programmed TA on
main frames. The development of fast desk top processing has made TA
more accessible but I don't see a lot of improvement in the returns. I
do see millions more systems test being run and lots of new trading
methods and theories, but the returns haven't gone up much. The good
traders make about the same thing as good traders did 30 years ago. At
least as much as I can remember. (The memory isn't as good as it once
was.)
Because of my age, I would rather have a higher probability of making
X% than to have a lower probability of making X + Y%, even though X
+Y% is going to make me more money over the long run. X +Y% is likely
to have a wider std deviation, (huge drawdowns) which is something I
don't like. I don't care about maximizing my returns. I've written
about why that's the case before so I won't repeat it. Consistency
year in and year out is more important in my approach to trading.
Again on these boards, I won't openly discuss my results, methods or
strategies in detail. But they work for me.
However, any strategies, methods or other stuff I put in my posts, I
welcome anyone to test. However, I'm not impressed by people
expressing uneducated opinions or observations from a chart, or other
subjective thinking. If they have objective test results which show
that what I said is not sound or that there is a better way, then I
would love to see them and have those results shared with others on
here.Just because someone disagrees with what I wrote, however, might
make for interesting debate but it does nothing to establish the
validity, or non-validity, of the material. It's political debate for
the sake of politics, which has nothing to do with fact.
Sebastian mentioned trading using seasonality. I've studied
seasonality and don't sgree with everything he said. I could have
given references to a large number of studies which don't support
portions of his hypothesis, but I would rather see him write a couple
of articles for Roy's newsletter explaining exactly how to make money
from seasonal trading. ( or post them on here) The "exactly" is the
key term here. If a newbie's is going to make any money using seasonal
trading, then they need a specific method and not just a theory.
Using my strategy, here are the trades I've made recently. I entered
these trades on May 27.
MCRS; DNA; URBN; KBH; CME; CHS; TALX; HOV; TPX; SNDA; NNI; VMSI; CBG;
AFFX; HANS; CNXS; TS; MTH; TOL; QSII; GOOG
In this kind of market, I use tight stops. I was stopped out of QSII,
NNI and AFFX. I'm still holding a few of these, but most were sold
earlier in the week. I picked these trades based on strategies I've
talked about before. The SPX and it's moving averages, the IBD, Value
Line lists, as well as the exploration I've given out the code to.
In the last two weeks I've made a couple of refinements on how I pick
from those sources. The tweaking would have eliminated NNI, but not
the other trades. I haven't traded anything since May 27 other than
the exits. I'm not expecting to enter any long trades for a week or more.
Trading is a lot of hard work. Ten minutes of trading, ten hours of
prep. Ten hours of prep to adjust the probabilities in my favor. Ten
minutes of trading to find out if I did my homework properly. All in
all the indicators account for maybe 10% of the favorable
probabilities. Value Line, the IBD and exploration lists accounted for
perhaps 50% of the total. My experience contributes 20% and luck the
other 20%. It takes all that and a lot of time to make some money--at
least for me.
For all that effort, I sometimes made more money than I would of made
using William Bernstein's asset allocation models from his book the
Four Pillars of Investing. However, over the last 10 years on an after
tax basis, I would have been somewhat better off with Bernstein's
methods because of capital gains. In addition, I would have had more
free time to work on other projects which probably would have left me
healthier, happier and less ornery.
The one benefit I've gotten out of trading is the self confidence that
I can make money regardless of the market conditions. Trading gives me
long term employment that I can work at when I want, put on hold when
I want and work at until I get tired of working regardless of my age.
The downside is as good as this all sounds, 99% of investors would be
better off using Bernstein's simple methods, which have produced
excellent results in up and down markets since I've been tracking them
for the last ten years.
I absolutely do not recommend trading. I recommend smart asset
allocation as the best method of making money and reducing risk. It
guarantees that overtime anyone can accumulate wealth. Most people who
trade redistribute their wealth to other people.
So there's my answer to your question. I hope it's good enough that
you feel I can still post sometimes.
Sebastian has convinced me to stop trading, so I'm looking for some
useful hobbies. I'm thinking about bowling--or maybe the rodeo and
bull riding for a couple of years before medicare kicks in.
Super
--- In equismetastock@xxxxxxxxxxxxxxx, mgf_za_1999 <no_reply@xxxx> wrote:
> I feel bad about this post already, and wish I could take it back. I
> really do not want an answer nor am I asking for Roy's track record.
>
> But....to be far.....
>
> What I really mean is this: you mention all the guys that write books
> or magazines but won't survive trading. You also actively promote
> Roy's work.....
>
>
> Again, simply to be fair.....
>
> The same yardstick should apply don't you think.
>
> Regards
> MG Ferreira
>
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