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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!!
Scale Traders can be heros for a long time and be bankrupted over night.
>From Elders Reveiw: You Can't Lose Trading Commodities
Robert F. Wiest
Hard cover, 392 pages, $50
Summary: If you are properly capitalized
and trade
reasonable size, you can sit out those
trades that move
against you and make money in the end"
Didn't Victor Neiderhoffer also use a version of this and he blew up?
NO ONE IS BIGGER THAN THE MARKET. "REASONABLE SIZE" WOULD MEAN 1% or less
of your portfolio. Not a reasonable chunk of your portfolio.
David Hunt
http://homepages.tig.com.au/~adest
----------
| From: Michael Ferguson <Michael.WL7BDN@xxxxxxxxxxxxxxxx>
| To: bshumake <bshumake@xxxxxxxxxxxx>; RealTraders Discussion Group
<realtraders@xxxxxxxxxxxxxx>
| Subject: Re: channel breakout
| Date: Monday, February 16, 1998 8:10 AM
|
| 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
|
|