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Typically simple systems work because it is easier for us to understand and implement. Complex systems tend to blow up more often than not because when we are hit by a six sigma event, we have no idea how to handle them. Another thing is that a simple system with effective logic might underperfom for a year or two, but if one has patience, it would pay off.
I personally prefer to have a few simple systems (one momentum based and one mean reversion) and then move from one to the next based on some breadth/MACD indicator or oscillator. You could also use Elliott Wave or another system if you are comfortable or some macro economic variable. The key is to have some effective logic for your underlying momentum and mean reversion system and the trigger one uses to move from momentum to
mean reversion and vice versa.
From: Mr Distinque <distinque@xxxxxxxxx>
To: equismetastock@xxxxxxxxxxxxxxx
Sent: Sat, February 13, 2010 12:01:38 PM
Subject: [EquisMetaStock Group] Re: Wall Steet Journal on System trading
Always love the beauty in the symmetry of simple but effective logic. No MAs, no oscillators, no support & resistance, no trend lines. Just take the money offered and run. Something, that while it has taken me many years to slowly realize, still remaining an elusive goal, has formed the solid foundation of my trading.
D
EGO Sum Qua EGO Sum
Sempre Avanti
--- On Sat, 2/13/10, Bob Waits <bobwaits2@xxxxxx com> wrote:
From: Bob Waits <bobwaits2@xxxxxx com>
Subject: [EquisMetaStock Group] Wall Steet Journal on System trading
To: equismetastock@ yahoogroups. com
Date: Saturday, February 13, 2010, 8:20 AM
Not strictly Metastock related but more systems related. James Altucher says he has traded the 4x2 system for years, and it works:
http://bit.ly/cs0ZnU
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