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At 04:30 PM 3/21/98 EST, POMPATIS wrote:
>Micheal wrote:
>
>- I suspect that Ric was referring to a system trader who blindly follows
>the signals given by a 'computer programmed trading system' rather than a
>discretionary trader who may follow a set of rules that together form a
>'system'.
>
>I would like to insert the notion of standard defenition. in my mind a
>discretionary trader uses a "METHOD", and a trader using a strictly defined -
>no room for descretion - approach, is one who is using a "STYSTEM".
>
>Perhaps using this terminology could foster a better understanding amongst
>those of us involved.
>
>Sincerely,
>
>Kevin Miles
>
I KNOW, I AM REPEATING MYSELF
But part of my last sentence got droppped somehow.
Kevin,
I agree with your main idea. We do communicate more effectively
if we have already agreed on what certain key words mean. And
I don't want to label any discretionary method a "system." But
that could be due to my bias for automating something that is
complicated. I try to reserve the word "system" for things that
work more like a machine, where how my lunch sits in my stomach
at the momen (emotions) have no part in the outcome.
More important to me: if we are ever to blindly execute a choice
of security (futures, options, bonds, stocks) and execute the
trade it needs to be a well tested system we are using. And once
it is tested and proven to yield 6 or more successful trades out
of 10 trades, we should trust it. The alternative to this is to
allow some of the thousands of different feelings we humans have
every day screw it up. So at the end of the day, if a good system
is in my hands, I actually favor "blind following."
The stupidest behavior I have ever seen in myself is when I have
a winner and hit the chicken-switch. Not the wrong choice of the
May option instead of the August or MSH instead of the S&P. Not
bailing out of a position gone wrong 10%. We should keep fear and
greed under control (can't eliminate them). This is too hard with
a discretionary method, but is possible to do with a real system.
petena9090@xxxxxxxxxxxxxx
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