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PureBytes Links
Trading Reference Links
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Last week's airing on PBS of the LTCM debacle was interesting in that very,
very little details of the fund's techniques were unveiled. In fact, it was
kind of stupid when it was mentioned that LTCM dropped $500 million in one
day.....yet gave no clue as to how that was actually accomplished. It was
probably a trading "record".
Obviously these guys were leveraged with options and/or futures in such a
way that long and short "bets" were supposed to offset each other......based
on prior relationships.....
Moral of the story: backtesting alone won't hack it in the long run. When
economic or market conditions change drastically, make sure your system
either adjusts properly or STOPS TRADING.
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