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Seth,
Well said.
Jimmy
Thursday, September 16, 2004, 10:18:40 AM, you wrote:
Sac> Just my .02...
Sac> I am trading a porfolio of models that I developed--some
Sac> developed as long as 7 years ago, some more recent. I have been
Sac> trading for a living first discretionally (flow, fundamentals,
Sac> technicals) and now completely quantitatively for almost 15 years
Sac> now, and would like to use my own experiences to highlight the
Sac> problems with leasing a black box.
Sac> It took 3-4 years of trading systems before I was able to
Sac> have the discipline to follow them correctly. People that don't
Sac> trade do not understand how hard it is to follow a system when
Sac> you are going through a drawdown. Trading has a humbling way of
Sac> making you do stupid things, like violating system rules at
Sac> precisely the wrong time. Now, I can follow my models without a
Sac> second thought, but that was not always the case. I have been
Sac> able to develop the discipline and comfort level with my systems
Sac> to implement them correctly. THIS COMFORT LEVEL WOULD NOT BE
Sac> POSSIBLE IF I DID NOT KNOW THE SYSTEM RULES. I guarantee that
Sac> (for me, anyway) it would not be possible to trade a black box
Sac> through a difficult drawdown period.
Sac> Granted, there are valid reasons for someone to want to
Sac> sell a system vs. trade it (and not enough capital is the kiss of
Sac> death for any trader) but it would take too much blind faith for
Sac> most people to trade a black box through the tough periods. The
Sac> system being sold would have to have an incredibly low level of
Sac> volatility in the returns to be followed effectively.
Sac> I would be willing to bet that well over 50% of the people
Sac> that purchase commercially available systems that are PROFITABLE
Sac> on a long term basis still wind up losing money trying to
Sac> implement them.
Sac> -Seth
--
Best regards,
Jimmy mailto:jhsnowden@xxxxxxxxxxxxx
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