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Hi David and Micheal,
As I understand it, Lateral Trading were NOT using scale trading. According
to the mag 'Your Trading Edge' by the SFE, they were using a contrarian
trading system. They had a long and short account, and were using averaging
to make a profit. This is different to scale trading.
As with any system, it is possible to blow it up if you overdo it. But if
you are conservative and are happy with about 25-30% return a year, you can
scale trade so that it is impossible to lose. The only way you can lose
money is if the futures contract of the commodity(trade commodities only)
you are scaling ceases to exist. If you dont believe this (and many wont
<g>), then you should get Wiests book (available at amazons). Paul McKnight
has a page on scale trading (he calls it interval trading) at
http://www.buffalo.pair.com/
Scale trading is not for everyone and a fairly large account is needed to
get started.
Regards
Simon Trevor
>Michael,
>
>In Australia we had a well publicised CTA - Lateral Trading - that just
>blew up using "Scale trading".
>Talk to the uninformed investors who ploughed Millions into this fund
>before they lost millions and they would have said "I don't understand it
>but it sounds good so it must work". Know I guess they are too
>embarrassed. Trend Following like the Turtles may have its drawdowns but
>overnight blow ups are very unusual for Trend Followers - if things are bad
>its a slow death!!
>
>| Bill and Traders,
>| This leads me to ask what you think of the scale trading system in
>Robert
>| Wiest's "You Can't Lose Trading Commodities". I don't have the book yet,
>| but I am ordering it. You can find a description of the book and trade
>| potential at http://www.elder.com/bookpages/WIEST_YO.html. Any tie-ins or
>| experience with this?
>|
>| Michael
>|
|