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At 5/19/2003 11:46 AM, Leslie Walko wrote:
Dear Mr. Bolotin et. al. :
It is my understanding that the Omega List participation rules
prohibit self promotion or advertising of products for financial
gain. I am particularly offended by Mr. Bolotin's advertisement
of phantom product, namely his NOT COMMERCIALLY RELEASED
software.
Mr. Bolotin may or may not have a product. We the readers of
Omega List are in no position to determine that since it is not
available to us. Therefore any 'comparison' between TS or WLD
must be viewed, at best as opinion, or more realistically as
shameless advertisement.
Kindly desist from such actions.
As someone said recently, there has been constant conversation year after
year about the desire for alternatives. When I post about an emerging
alternative, most responses (mostly via private emails) are friendly from
people with open minds and happy that a software developer is listening to
what list members are asking for. But sometimes a negative response like
this emerges.
Discussion about alternative products, including the ability for product
vendors and aspiring product vendors to talk directly with their
marketplace, is a tremendous resource for both vendors and software users.
It is an advantage for omega list members who are interested in a
competitive marketplace with alternatives available to be tolerant of a
reasonable quantity of vendor posts. Competition in software has always
proven to be a good thing for software users, and if some vendor discussion
helps an emerging competitor survive and emerge with a product that
accomplishes what some list members have been asking for, that is a good thing.
But don't get me wrong. I realize that a vendor needs to be reasonable
about posting, and should gauge their posts based upon the interest shown
in their posts. To keep posting when nobody is interested would obviously
be wrong.
The following is a quote from the official rules I received when I
subscribed to the omega list:
<<<<
Commercial Messages
-------------------
Please do not use this list to sell your phenomenal trading system.
If you have a product that helps solve a specific problem posed by a
list member, you may mention it in that context, but you must be
brief and specific.
>>>>
While the above quote does not specifically give guidelines for vendors of
alternative trading software (which is a different case because trading
software is neither a trading system or a solution to solve a specific
problem), it does indicate that commercial messages are not prohibited.
But, yes, certainly the moderator is clearly saying vendors should be
reasonable.
Also, in addition to the official policy, it seems to me that the list is
generally tolerant of reasonable product announcements and reasonable
discussion of non-omega products. My first contact with all early users of
PowerST emerged from my occasional posts about PowerST to the omega list.
Clearly there are some list members who have been interested in my
occasional posts.
I hope this does not start additional discussion, because there is nothing
more useless than discussion about list etiquette, with people making off
topic posts to complain about what they feel is an off topic post. I
suppose I am guilty of this myself with this post, but I don't enjoy being
insulted, and it is hard not to respond to an attack like this.
I have no plans to make additional posts about PowerST at this time anyway.
Also, just a little technical note on 'advanced features'.
Anyone who charges money for 'scaling / pyramiding' by claiming
that this is some kind of major functional advance must believe
that TradeStation Users are complete programming idiots. I wrote
my own scaling system in Easy Language, AND wrote the algorithms
to correctly record the results and compute performance
statistics when the scaling feature is turned on. The whole
thing was less then 100 lines of Easy Language. So Mr. Bolotin,
your claim of 'powerful features' makes me laugh. What a joke!
Sign a non-disclosure agreement so that someone can write
'special code' for me what I can code in Easy Language in a few
lines. :-)
Leslie
The scaling strategy I mentioned cannot be done in TradeStation because it
involves portfolio level money management, which TradeStation does not
support. For example, a simple example would be to start with the strategy
of never risking more than 5% of your account on one trade or 20% of your
account on all open trades. Say your system uses a trailing stop. As a
trade moves profitable, the trailing stop will eventually reach the trade
entry price. Your risk on that trade is now $0 (of course, this is
discussion is excluding slippage). So, here is an interesting idea. Since
you were willing to risk 5% on the initial trade you could consider adding
more contracts to the trade at this break even point and bring your current
$0 risk back up to the 5% of account level. Also, (somewhat as an aside)
let's not forget that it is also necessary still limit the new position
size upon the scale up to stay within the constraint that the risk of all
trades in all markets (and possibly additional systems trading the same
markets if you are trading multiple systems) cannot exceed 20% of account
equity.
The advantage of this scaling up approach is that you will end up trading
larger position sizes while still staying within the risk constraints of
the money management strategy. The disadvantage is that on profitable
trades you are holding more risk for longer by max'ing out your risk a
second time with the scale up. Whether this is a good tradeoff will likely
depend on the nature of the trading system. In particular, what tends to
happen as trades move profitable? In general, a trade moving profitable
could be viewed as a confirmation of the trend. If this confirmation means
that expectations for the ultimate outcome of trade become better, it might
be a good tradeoff to carry some risk for longer by taking the scale up. In
exchange you get a larger position size, and therefore increased profit for
the winning trades that catch a sustained trend. In other words, if the
nature of the system is that once a trade moves profitable the trend tends
to continue, then this could be a good tradeoff which will increase
ultimate profits.
I find this an interesting concept. With the scaling feature I am working
on, it will be possible to historically test how adding these scale ups as
trades become profitable affects long term performance.
This is a portfolio level money management strategy because when I say "5%
of your account", in historical testing that means 5% of total combined
portfolio equity. It requires that the trading strategy have access to, at
the end of each bar, the current combined portfolio equity for all markets
and systems being traded. Then, this combined portfolio equity is used to
make the percent risk position sizing decisions about new trades and scale ups.
Another reason why this a portfolio level strategy is because of the rule
about never risking more than 20% of your account on all open trades. That
requires not only combined portfolio equity at the end of each bar, but
also knowledge of the open risk of the current open trades in other markets
and systems.
What I describe above is only the start of the capabilities of the scaling
feature I am working on. I am describing the simplest example I can think
of that explains why this is something that cannot be done with TradeStation.
Bob Bolotin
President, RDB Computing, Inc.
Developer of "PowerST: The Power System Tester"
http://www.powertesting.com
bob@xxxxxxxxxxxxxxxx
847-982-1910
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