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Re: Math of Trading



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In a message dated 2/27/00 10:01:01 AM Pacific Standard Time, 
editorial@xxxxxxxxxxxxx writes:

> Hey NEWBIES!  Pay attention here...  and read Bob Heisler's previous posts. 
 '
> Cause I'm here to tell you - He's speaking the truth.  Notice how folks get 
> antsy every time Bob makes a post?  Have you ever seen such a thing?  Does 
> that tell you something?
>  
>  Bob - Keep up the great work!  I hope you never lose your "itch" to write 
> and teach!
>  
>  
>  The Omega Man
>  
>  P.S. - Lawrence, I think you're suffering from the "this man is going to 
> spill the beans if I don't stop him" syndrome. 

The "secret" that it seems Om is referring to is letting your profits run. It 
is pretty simple for day traders. Check the "Close all trades at end of day 
session" box. Toby Crabel "spilled the beans" on this secret circa 1989 in 
his book and you can be sure he was not the first. Also, I think Rich S. (of 
R Breaker fame?) mentioned in an interview with Bruce Babcock that his highly 
rated system exited MOC as well. I could go on and on...

But try it for yourself. Compare various daytrade exit techniques to MOC.

One popular exit used by "discretionary traders" is to trail a stop under a 
swing low when long or over a swing high when short. Here is some code for 
that:

Input: X(2){optimize as you wish};
EXITLONG AT  SWINGLOW(1,L,X,33) - 1 POINT STOP;  
EXITSHORT AT SWINGHIGH(1,H,X,33) + 1 POINT STOP;

Tack it on to a system and compare it to a simple Market on Close
exit for profitable trades.

However, as Lawrence stated very correctly, knowing this and doing
this are two different things. Letting a trade just run its course through
most of the day in the S&P can be grueling.

> As Bob continues to teach 
> your syndrome is going to get worse.  You better get off the list now 
'cause 
> things are heating up!

I'm still trying to understand what I learned other than "let
your profits run." I didn't see a specific method there. I must be
missing something. Wouldn't be the first time.

Back to the fresh Tahoe powder :)

BW
SmartTrades.com

WARNING: Trade at your own risk! Commodity trading can be risky and is not 
appropriate for everyone!

NO CLAIMS ARE MADE THAT THESE TRADES HAVE BEEN
OR ARE LIKELY TO BE PROFITABLE.


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WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT 
WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN 
FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE 
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TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS 
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LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING 
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