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I echo almost all of what Scott Hoffman wrote. Like
him, I too use a computer program to tell me whether
to buy or sell. I also use a computer program to tell
me HOW MANY CONTRACTS to trade. There is zero human
judgement or discretion; the computer makes all the
decisions. All I do is phone in the orders to my broker.
I'm kind of a technological Luddite; I like the audit
trail that is generated when I phone my broker and
he is taping the call and I am also taping the call.
I read him my order, he reads it back, I say O.K.,
and he executes it. No ambiguity about "we never got
your order" or "you mis-typed the order" or "noise
on the phone line garbled your order" or "our FAX
machine ran out of paper and we never saw your order."
If a misunderstanding ever arises (and none has, yet),
I just play back my tape and voila, problem solved.
I realize, this is NOT the modern approach. It's
merely the approach that makes *me* comfortable.
I use a fully mechanical system that I bought
from a vendor. I trade it on >20 different
commodities, using the exact same code and the
exact same parameter values (namely, "80" and "2")
on all markets. It trades Coffee the same as
Bonds the same as Crude Oil the same as Canadian
Dollar, the same as all the others.
"80" and "2" are the parameter values in the
system manual supplied by the vendor; I've
done research to test out other parameter settings,
but have only traded my own money using
"80" and "2".
I've been trading it for quite a while, and reporting
my actual real-money results in a newsletter called
_Club_3000_News_. The results of about 100 trades
(namely, calendar years 1997 and 1998) appear in
issue #99.02 of the newsletter; they will be glad to
sell you this backissue for $5.00. Contact info
is on the Club's website,
http://www.ison.com/club3000/index.html
I *DONT* trade using single contract position
sizes; instead I use a non-Ralph-Vince betsize
algorithm that employs a non-fixed-fractional approach.
This is covered in issue #99.04. I programmed
it in a dinky little PERL script that's about
50 lines of code.
100% mechanical trading has done pretty well for
me. From 1/1/1997 to today (5/13/1999), my
net profits (including commission, slippage,
rollovers, etc) have achieved a compound annual
growth rate of 79.6% per year. As of today,
total net profits are $421K. $118K of the
profits came in 1997, $102K came in 1998,
and $200K of the profits have come (so far)
in 1999.
If want to know more, but you're too cheap or
too lazy to send $5.00 to Club 3000 News for
a reprint, don't bother asking (or demanding)
one from me.
--
Mark Johnson Silicon Valley, California janitor@xxxxxxxxxxxx
"... The world will little note, nor long remember, what we
say here..." -Abraham Lincoln, "The Gettysburg Address"
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