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Mark Brown wrote:
> >> SNIP <<
> when you do a reality check you will see that the system could
> have ruined you if you started on a wave down the equity curve rather than
> on a wave up.
>> SNIP <<
How do you do a reality check?
I think Mark Johnson said "[he] tests like [he] trades, and trades like [he]
tests." His descriptions of his testing process seem to be as rigorous and
thorough as I have ever seen or can imagine. How much closer to reality can
you get using past prices, realizing that the past is not likely to be exactly
like the future, and in any event, there can be no assurance that it will be
so. Plenty of people think that is OK, because there's a whole industry
selling 'em, and ways to test 'em.
If Mark is to be believed, he tested various methods pretty extensively, picked
one, put his money on it, and has gained the reward for his efforts. Will this
same strategy pay off the same way in the future? Not exactly.
I have done a review of Mark Johnson's posts to misc.invest.futures. My
impression is that he is a well trained, well disciplined and mighty savvy,
serious investigator, free of the promotional motivations of many guru's and
pundits who take up so much bandwidth there. The information he has provided,
at least as much as I understand of it, looks very useable.
There is a certain irreducible element of chance involved in these things.
Warren Buffet might not be the mega zillionaire he apparently has become had he
started his career in 1922, 1932 or 1942 instead of 1952, walking into the game
just as 47 years of relative peace and prosperity began, and Richard Dennis
might not have been so "lucky" to run $400 into $200 million if he hadn't gone
long the grains at the close the Friday before the corn blight panic. He might
have done better at keeping it, but that's the chance you take!
With any of these systems, there is always the oddball occurrence, the close
which triggers the exit signal misses by 3 ticks, and the next day is the first
of 7 limit days against you. That's the chance you take!! That's why you
don't put everything on red every game. The professors say speculators are
paid to assume the risk, so there should be no yelping when th "risk" comes
home to roost.
I'm as skeptical of "guru's" as you are, which is why this insight from Mark
Johnson comes as such a breath of fresh air.
Jim Allen
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