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Dear Kaye,
In my opinion the conventional approach to trading, reinforced by the
design of trading software (inc. TS) as well as the content of nearly
all trading books, puts the cart before the horse. The beginner is
immediately thrust into the world of system design. In the last few
years there has been emphasis on money management as well, mostly as
a necessary overlay to a trading system, to be applied once the
system is chosen. This view of money management is flawed: it is not
something extra - it must be tightly integrated with system design
from the get go.
However, even granting this, a critical component, and one which must
be substantially mastered before getting involved with system
design/money management at all, is rarely mentioned as a distinct
subject. Most often it is mentioned in passing while dealing with the
other matters. This is *system evaluation*. It's no good designing a
system unless you know exactly what you are doing in judging its
results. Blind acceptance of the conventional measures of system
performance is costly. What is wanted is an understanding of their
relevance and underlying assumptions.
I am aware of no thoroughgoing treatment of this topic as a separate
matter for discussion apart from a book on the subject which got
disappointing reviews. The best discussion of this aspect is
scattered throughout the literature. Look for books by Sweeney,
Chande, Balsara, Schwager, Kaufman, Gehm, Vince. There is
much else of value in books by these authors besides their discussion
of system evaluation.
Don't be in a hurry,
njb
> To: omega-list@xxxxxxxxxx
> Date: Fri, 29 May 1998 08:27:42 -0700
> From: "kaye foxbrook" <foxbrook@xxxxxxxxxxxxxx>
> Subject: Trading Advice
> Organization: MailExcite (http://www.mailexcite.com:80)
> Hi,
> I'm attempting to learn as much about trading and trading systems before I actually take my first leap. I've purchased TradeStation and have it installed on my laptop and as soon as I get my data fe>
> I'm new to the list and my intention is certainly not to waste anyone's time but any information you can send my way would be most appreciated. If there is any advice you would give to a beginner tr>
> Sincerely,
> Kaye
>
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