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Steven,
You have to be right about this. As you have noted in earlier posts, the
markets have a fractal nature to them. One thing that means to me is that if
you cover the price and time scales and look at a chart, you would be hard
pressed to determine whether the chart was an 8 tick, 3 min, 30 min, Daily,
or Weekly chart. Indicators would look the same, Elliott waves would be
there, Gann information would be there, etc.
So, since these things are the same, your patterns to enter the market would
be the same. The thing that would be different, would be the price scale.
The greater the time frame, the greater the price scale, the greater the
average true range of each bar, and thus the greater the risk (and reward)
of each trading opportunity. So, as Kase also says in seminars, the smaller
the bucket of speculating capital you have, the shorter the time frame you
should trade. If your current job or lifestyle won't accommodate day
trading, then you need to build up your capital and choose your markets so
you can position trade. This isn't meant to imply that only those with small
amounts of capital day trade. Many very adequately capitalized and
successful traders day trade, because they like that time frame and/or it is
psychologically easier to trade risking less money, and/or other reasons.
This flow of logic begs a question from an earlier post of yours, where you
state that the markets are fractal, but also that systems perform sometimes
significantly differently in different time frames.
I don't disagree with your observations, but those seem to be conflicting
pieces of information. If the markets have a truly fractal nature, then
systems should perform similarly in different time frames (unless commission
and slippage become too significant in smaller time frames).
Does anyone have any thoughts on that apparent paradox?
Neil
| -----Original Message-----
| From: Steven Buss [mailto:sbuss@xxxxxxxxxxx]
| Sent: Monday, August 03, 1998 12:48 PM
| To: Timothy Morge
| Cc: Neal T. Weintraub; omega-list@xxxxxxxxxx
| Subject: Re: Trading as a way to financial success (a reply)
|
|
| I can't quote Kase vertabim. But I think a concept from her
| book could add
| some light to this discussion.
|
| She argues that degree of account risk per trade and for any
| trading system
| is very much dependent on the price volatility of the
| specific timeframe
| bars one is trading. Assuming one has and implements money
| management
| techniques appropriate to the timeframe being traded one
| risks less trading
| 30 minute bars than daily bars. This makes a great deal of
| sense to me.
|
| So, when a few folks state below that "there's no sense trading" with
| anything less than x dollars, I presume they have a
| particular trading
| timeframe in mind for which they believe x dollars is the
| equity one should
| have to trade the timeframe.
|
| If one were to trade a larger timeframe than they have in
| mind, the equity
| requirement would be higher. If one were to trade a smaller
| timeframe than
| they have in mind, the equity requirement would be lower.
|
| Isn't that right? If not, why do you think so?
|
| Steve Buss
| sbuss@xxxxxxxxxxx
|
| -----Original Message-----
| From: Timothy Morge <tmorge@xxxxxxxxxxxxxxx>
| To: xet73@xxxxxxxxxxxxxx <xet73@xxxxxxxxxxxxxx>
| Cc: Neal T. Weintraub <thevindicator@xxxxxxxxxxx>;
| cpbow@xxxxxxxxxxxxx
| <cpbow@xxxxxxxxxxxxx>; omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
| Date: Monday, August 03, 1998 8:53 AM
| Subject: Re: Trading as a way to financial success (a reply)
|
|
| >Peter:
| >
| >Well, perhaps they should do some very basic investigation into the
| business of
| >trading. The more informed they are before they begin, the
| more likely they
| are
| >to go bust. And by informed, not just informed about a
| system, a quote
| system or
| >how to tune their computer.
| >
| >The markets have been around for thousands of years. many
| people now think
| that
| >something has 'changed' because computers are here and there is an
| internet.
| >Many of these same people think the stock markets can grow
| to the sky,
| because
| >the 'fundamentals' of economies have now changed--and we'll
| never need or
| have
| >recessions again. These people are naive.
| >
| >Trading is trading is trading. Learn a good solid
| foundation, not today's
| fad.
| >
| >Tim Morge
| >
| >Peter Kiefer wrote:
| >>
| >> o.k. they should invest in your workshops --- right
| >>
| >> ----------
| >> > From: Neal T. Weintraub <thevindicator@xxxxxxxxxxx>
| >> > To: cpbow@xxxxxxxxxxxxx
| >> > Cc: omega-list@xxxxxxxxxx
| >> > Subject: Re: Trading as a way to financial success (a reply)
| >> > Date: 03 August 1998 16:00
| >> >
| >> > Thanks for your response.
| >> > I wish more people were this direct. People tend to
| think all they need
| >> is
| >> > software and a system and they are on their way to Easy
| Street with
| Easy
| >> > Language. Hey, maybe that could be a new slogan...Easy
| Street with Easy
| >> > Language.
| >> > You know when you consider that the Vanguard Funds are
| up nearly 100%
| in
| >> > three years, it is hard to understand why people even
| fall prey to
| >> commodex.
| >> > The Merc has a course called before you trade. But I
| can tell you this.
| >> > Anyone with less than 20,000 in trading cash should not
| be in Futures.
| >> > Period. End of Story. I am tired of hearing about
| people saving $7500,
| >> then
| >> > buying software for $3500 and using the balance to trade.
| >> > And anyone with more than $10,000 in credit card debt
| can never trader
| >> > themselves out of debt.
| >> > Take the $7500.00 and buy a vending route.
| >> > -----Original Message-----
| >> > From: Conrad Bowers <cpbow@xxxxxxxxxxxxx>
| >> > To: Neal T. Weintraub <thevindicator@xxxxxxxxxxx>
| >> > Cc: Omega List <omega-list@xxxxxxxxxx>
| >> > Date: Sunday, August 02, 1998 3:23 PM
| >> > Subject: Trading as a way to financial success (a reply)
| >> >
| >> >
| >> > >Neal T. Weintraub wrote:
| >> > >>
| >> > >>
| >> > >> wHAT DO YOU THINK OF TRADING AS A WAY TO FINANCIAL SUCCESS.
| >> > >> PLEASE POST YOUR RESPONSE TO THE LIST.
| >> > >>
| >> > >
| >> > > For a minute I thought this was a joke (in light of
| my very recent
| >> > >post) but I believe it's not so here goes:
| >> > >
| >> > > I think you have to have a method that actually makes
| money and the
| >> > >capital to withstand the drawdowns that will occur
| before you succeed.
| >> > >That makes it not a very good way to go for someone of
| limited means
| or
| >> > >anyone who is emotionally attached to money. The
| brochures that say,
| >> > >we have a great system, and then show it on 20
| commodities, often go
| on
| >> > >to say, "you can trade this on a more limited
| portfolio with $5000".
| >> > >Even tho they may have been honest in their testing, I
| believe the
| >> > >chances of the smaller portfolio having acceptable
| results is much
| >> > >lower. Primarily because the drawdown numbers for a
| smaller portfolio
| >> > >will be more prone to being inaccurate or the portfolio "cherry
| picked".
| >> > >
| >> > > It's not the easy street it's made out to be either.
| Unless it's a
| >> > >small portion of your net worth and NOT your way of
| making a living,
| >> > >it's hard to see how it could not be anything but
| stressful to some
| >> > >degree.
| >> > >
| >> > > For many of us who have other careers, it can become
| a second job in
| >> > >itself, maybe even supplanting our original one. In effect my
| original
| >> > >goal to pay off some debts has become a goal to
| succeed in trading.
| And
| >> > >that goal has distracted me quite a bit from my first
| career. I can
| >> > >tell you why I don't like my current job, but was the
| transition to
| >> > >spending a lot of time on trading well thot out?
| Nope, it evolved.
| For
| >> > >those of us who seek to make a transition (or by
| default are making
| the
| >> > >transition) from our current career to trading as a
| means of making a
| >> > >living or being sucessful, maybe we should step back
| partway along the
| >> > >way and ask, was this the right thing to do?
| >> > >Even if it was a means to $ sucess for an individual
| with another
| >> > >career, it might not be right for them. I guess
| everyone has to ask
| >> > >themselves what success is.
| >> > >
| >> > > Also I think your emotions have to favor you being in
| it. If you
| have
| >> > >conflicting feelings about it, it's less likely you
| will succeed.
| >> > >Recently, I built up my small account from about 3K to
| 6K, patiently
| >> > >grinding out small losses and a few larger wins in options and
| >> > >mini-contracts. But a number of emotionally charged
| issues have come
| >> > >up, at times introducing frustration, discouragement,
| and even guilt
| >> > >into my thoughts. After being rigorous (perhaps too
| much so) about
| >> > >kicking back options that werent' making money, I
| suddenly stopped
| >> > >looking at options i had altogether, same with most
| potential new
| >> > >positions. What was going on? The only thing I can
| think of, is that
| >> > >my ambivilence about some of my decisions, including
| getting into
| >> > >trding, was being manifest by actions that might take
| me out of it.
| I
| >> > >used to scoff at some of the stuff in M. Douglas book
| about how you
| may
| >> > >defeat yourself - seemed crazy, why would anyone do
| that? But now, I
| >> > >think I've seen it in my own trading.
| >> > >
| >> > > In short then I think it is a way to financial
| success for a few
| people
| >> > >- The ones who either find a method and/or have the
| talent to succeed
| >> > >in this field. It's a low-probability route for
| someone who does not
| >> > >have a fair amount of capital already. I think its a
| way to financial
| >> > >success for someone who:
| >> > >
| >> > >1. has a positive expectation system or talent, and
| has confidence in
| >> > >it.
| >> > >
| >> > >2. has the capital to back that up.
| >> > >
| >> > >3. has a risk mgmt plan consisntent with 1+2.
| >> > >
| >> > >4. Doesn't have conflicting emotions about the money
| at risk; doesn't
| >> > >have conflicting emotions about other issues or people
| that are in any
| >> > >way impacted by the decision to trade.
| >> > >
| >> > >
| >> > >What % of people in this crazy arena do you think have
| all 4? For
| those
| >> > >it's a good way to financial success. For the rest, nope.
| >
|
|