Your point
about personality is by far the most relevant to this whole discussion. The
analogy between trading and sport has been made many times before, but it’s
worth repeating. It appropriate because we can all relate to it.
It doesn’t
mater what the sport, there are three main areas that need preparation and
practice in order to stand a chance of success (and even then success only
comes after real-world experience is gained). These three areas are the
physical, the technical and the mental. The direct comparisons with trading are
obvious here…
(a)
Physical = fitness and health. OK, so traders don’t exactly
need to be able to run a 4-minute mile, but a lack of health is definitely
detrimental to any “game”.
(b)
Technical. While, for example, a tennis player will work on their
serve, backhand, forehand drop-volley, etc so we have to work on our
chart-reading skills, our understanding of fundamentals, our *knowledge and
understanding of systems*, etc. These technical aspects relate to the *tactics* and the *strategies* we will employ on a
trade-by-trade (or point-by-point for the tennis player) basis. They represent
our arsenal of skills that we can unleash on the opponent(s).
(c)
Mental. If a tennis player caves in mentally when his/her opponent
goes 5-2 games up in the final set then it’s curtains. It matters not who
has the better physical condition or who has the best strategy. By this time
the strategy and tactics are far less important that *mental discipline*
Your systems
designers are simply people who specialise in (b) without addressing any of (a)
or, most importantly, (c). Mental discipline involves self-control,
self-understanding, courage, conviction, sheer pig-headedness and a whole host
of other positive adjectives. Without these we as traders might as well give up.
If we do not understand and have control of our own *personalities* then our opponents will simply out-psyche us
and we will lose the game.
So, in sport
just as in trading you get people who offer mentorship (those especially who
have “been there, seen it, done it”), people who offer technical
advice (tacticians, if you will…or systems developers?) and people who motivate.
No-one, however, can teach anyone else the personality chartacteristics that it
requires in order to actually take all those skill sets and go out there
on-court and win the equivalent of the US Open or Wimbledon.
End of story!
Apart from
just to add that professional sports people do actually *pay* (directly or indirectly) their mentors,
trainers, managers, etc. These people all have a place in the grand scheme of
things. If they have recognised and declared up-front that they themselves do
not now have, or never did have, what it takes to actually *do* all the stuff they teach, then that is usually
all well and fair. But don’t think for a minute that they don’t check
out the credentials of the “expert” before they go ahead and employ
their services…
As for back-testing
systems…that has always to my mind been like saying “damn, I could
have beaten McEnroe in the ’84 final if I’d have used these tactics”
(let’s assume for a minute that we are Boris Becker!). The whole question,
whilst useful, ignores the whole mental aspect - the state of mind we would
have been in at the time. And let’s not ignore gut instinct here either…how
many points are one with pure instinct? Personally speaking, as I get better and
more experienced at trading, I am finding that I can trust mine more and more.
I will never rely on it and I will never use it alone, without some sort of “evidence”
to support my decision…but it’s bloody difficult to back-test!! Discretionary
vs. systems argument re-hashed?? Maybe…but who out there really uses 100%
mechanical decisions anyway?
Basic point…never
underestimate the influence of personality and mental state on actions/decisions
taken “in the heat of battle”. Don’t criticise out-of-hand
people who specialise in “after battle” analysis - they can help prepare
you for your next game. On the other hand, rely on, or blame no-one but
yourself for both points won and points lost!
From:
equismetastock@xxxxxxxxxxxxxxx
[mailto:equismetastock@xxxxxxxxxxxxxxx]
On Behalf Of jawjahtek
Sent: Tuesday, June 28, 2005 3:52
AM
To: equismetastock@xxxxxxxxxxxxxxx
Subject: [EquisMetaStock Group]
Re: system tester shortcomings--goose gander correction
Some answers to your questions since I have met some of these people:
1. Dr. Alexander Elder writes books, sells
software, offers seminars
and personal coaching/consulting. Anyone know if
he trades?
Yes, Dr. Elder trades but it is a minimal level.
He has tried and
failed several times to use his trading methods
for an advisory
service. I'm not trying to disparage his work (or
anyone elses), I am
just reporting what I know.
2. Chuck Lebeau develops systems. I love his
writings. Anyone know
if he trades?
Yes, LeBeau trades his various systems, but he is
far more successful
at selling his systems. In his case, his clients
are institutions
first. Systems that he sells to the average
investor have already
been "fully utilized" by LeBeau's big
dollar clients.
3. Van Tharpe was apparently unsuccessful in any
trading and only
provides seminars now.
4. Ed Seykota, I haven't met him so I cannot make
an honest comment.
Bouns:
John Ehlers (MESA
and its various incarantions). John
is an engineer.
At a session where I met him, he showed his
partially successful but
unimpressive trading record. John readily admits that he hates
trading.
I think John
Ehlers is a good example of the personality of a system
developer vs. the personality of a trader. Systems
development
requires a willingness to program accurately.
Accurate programs are a
pain to write, test and debug for the average
person. A good system
developer's personality borders on obsessive perfectionism.
Trading
on the other hand is a very messy business. A good
trader readily
accepts that many trades will fail. Perfectionists
do not make good
traders. It is rare for a good programmer to be a
good trader. It
simply requires a different personality type.
jawjahtek
--- In equismetastock@xxxxxxxxxxxxxxx,
"metastkuser"
<andysmith_999@xxxx> wrote:
> Very interesting post.
>
> Dr. Alexander Elder writes books, sells
software, offers seminars
and
> personal coaching/consulting. Anyone know if
he trades?
>
> Chuck Lebeau develops systems. I love his
writings. Anyone know if
he
> trades? Same questions with Van Tharp.
>
> What about Ed Seykota? No doubt about his
trading abilities and
> wealth. So why does he offer a consultation
service at Incline
Village?
>
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