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> We agree on one point there are very few pure system traders on
> this list even from traders who believe they are in that category.
>
> Robert
I was really amazed by this when I first came to this list! Every time
someone would ask a question or raise an issue that brought a system into
question (as you did yesterday) many folks on this list would respond that
they had not been affected by the issue because they had overridden their
system signals! This is exactly the response you received to your post
yesterday.
My friends, if you are overriding your system you cannot be said to be
system trading.
Newer traders take note! The folks here are not trading systems the way you
think they are!
----- Original Message -----
From: Robert W Cummings <robert.cummings@xxxxxxxxxxxxxxxx>
To: The Omega Man <editorial@xxxxxxxxxxxxx>
Cc: Jim Murphy <jmurphy1@xxxxxxxxxxxxx>; <Omega-list@xxxxxxxxxx>; Robert W
Cummings <robert.cummings@xxxxxxxxxxxxxxxx>
Sent: Friday, July 23, 1999 7:30 AM
Subject: Re: Bear Trap
>
> I didn't mean to infer position traders wouldn't be effected by price
> shocks. Only that because of a longer view which could mean having bigger
> larger risk and larger rewards might be able to whether a price shock
> better. We agree on one point there are very few pure system traders on
> this list even from traders who believe they are in that category.
>
> Robert
>
>
>
>
>
> >The problem that Robert raises (the problem of price shocks) is a very
real
> >one for the system trader. What surprises me is that he says that this
> >problem affects only day traders. I do not understand why he says this.
I
> >can think of all sorts of recent price shocks which affected position
> >traders. Both the position trading system and the day trading system
must
> >deal with price shocks (or use them...).
> >
> >So a question is: How should we deal with (or use) price shocks in our
> >systems? TJ recently suggested (on this list) an approach which involves
> >using "filtered" price data as feedback (or input) to the system
algorithm.
> >His idea, if I may paraphrase, was that price shocks are abberations
which
> >the system needs to notice but not overreact to. So he "tones down" or
> >mutes the system reaction when a shock occurs. I find his idea
interesting
> >but not practical (for money-management reasons).
> >
> >
> >The point here is that we have 2 choices, and that these two choices
apply
> >to both position and day traders:
> >
> >(1) Deal with price shocks in our systems or
> >(2) Adopt method or discretionary trading
> >
> >
> >The Omega Man
> >
> >
> >
> >----- Original Message -----
> >From: Jim Murphy <jmurphy1@xxxxxxxxxxxxx>
> >To: <Omega-list@xxxxxxxxxx>; Robert W Cummings
> ><robert.cummings@xxxxxxxxxxxxxxxx>
> >Sent: Friday, July 23, 1999 12:41 AM
> >Subject: Re: Bear Trap
> >
> >
> >> >One of the reasons I don't like systems was the trade today in the
bonds.
> >> >Had a channel going then broke out to the upside that would trigger
most
> >> >systems to buy. Followed a horrific break that lasted 12 minutes for
> >over
> >> >a point and a half before a small bounce up. I guess the people who
use
> >> >systems would say the trick would be to reverse but today was an
> >exception.
> >> >Most times if you try and reverse this market you can get hit both
ways.
> >> >Sorry if anybody got hurt today in the bonds but reaffirms to me
systems
> >> >don't work for daytrading.
> >>
> >> Seems like a no-brainer to me to NOT take signals from a system when
> >> Greenspan is in the news.
> >>
> >
> >
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