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> 2.have you find that is better use one system on different markets or
different systems for every market (because every market is different...)
Very hard question, yes and no. Can you build a system that will trade all
markets? yes. Would I want to trade one like that? no. So what is the
validity of a system if it can not trade all markets? Well, it no one
system should be required to trade all markets profitably, no more than one
shoe should fit all feet. Can you make a shoe fit all feet? yes. Would I
want to wear the thing? no. If I were a cave man who was barefoot I may be
very happy to start with the universal fit all shoe. But as I become more
aware I may come to desire something of a better fit.
I could write hundreds of pieces of code to trade a trend, a trend is a
trend ask any 6 year old what the direction of the price is on a chart!
And presto there is your trend. If trend trading is so great then why does
every trend trader trade a basket of commodities rather than a single
commodity? I tell you why, its like betting on every table in Vegas or
betting at only one table. Its a game of chance that something will hit, I
personally would rather concentrate on 1 (commodities) good hand of poker
than to be rolling dice at 28 different (commodities) tables. Can you make
money using the shotgun approach? yes. However, I had rather be a sharp
shooter in a tree at a distance than a front line combatant in a muddy
trench with a sling shot. So its a matter of preference, mine is not trend
trading.
Counter Trend trading, is the life for me. Computer analysis shows that
there are many more wiggles in commodity data than there are strait lines.
Therefore I'll take the wiggles since there's more of them. Since there's
more of them then I have a larger pool of data that I can sample my systems
on. More food to feed them, now this would contrast to researcher's who had
rather not be put under the magnifying glass of reality. Many systems look
great with small data samples, but very few withstand the crushing rigors of
massive testing! Wiggles give many more opportunities to make money and to
gain a "consistency of trading" that markets true personality, whereas trend
following doesn't capture a particular markets behavior. Another pitfall
that trend trading has is the "EYE" appeal, everyone can see that huge move
on a chart. This is what the human mind focuses upon, and so it is much
easier to justify the reasoning for trend trading as opposed to counter
trend trading.
Many seat of the pant traders are counter trend traders, this very
personality trait can swing ones emotions as high and low as the account
balance fluctuates. So for a counter trend trader to become mechanical is
probably the hardest fought battle in the history of trading. I know of no
other method of trading that makes more money in a shorter period of time if
done properly. What appears to be a gamble or taking a shot, is actually a
controlled statistical exercise that becomes second nature after awhile in
the saddle.
mb
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