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At 8:58 AM -0500 3/22/98, A.J. Carisse wrote:
>So what's really the point here - I'm not really sure - I guess for the
>most part I'll leave that up to others who may wish to elaborate. However,
>a couple of points are worth mentioning here. Is the person who trades
>intuitively a better trader than one who trades systematically? This may
>differ, but results are what counts here. Is the former more of a "real"
>trader? This would be nonsense. Is one approach better than the other? I
>guess this depends to a large degree on the individual - although I would
>tend to agree with Peter and say that, theoretically speaking, the
>systematic approach would be more sound, whatever works best for you is
>the right way to go. Of course, finding this is a never ending task.
I often use an analogy to describe this.
You can build a computer program to fly an airliner, the autopilot. It does
a pretty good job and is programmed to handle most, but not all, of the
situations it will encounter. Hopefully, when it encounters something it
has not been programmed to handle, it sounds a warning.
Now you can use it several ways:
> You can turn it on and walk back to the passenger cabin and let it
fly the plane. Normally, you would only do this when the weather
is clear and you are in the middle of "normal situations".
> You can put it on autopilot and read a book. Flying a plane for
hours on end can get pretty boring. The alarm will alert you if
something strange happens and you can deal with it with your
judgement (which may or may not be up to the challenge). As time
goes by, the programs get better and better and can handle more
and more of the unusual cases, requiring judgement less and less
often.
> You can turn it off and fly the plane yourself. Most pilots love
to fly so they do, so even if the autopilot could do it perfectly
well. In fact, most autopilots can fly the plane much better
than the average pilot can in "normal situations".
The problem with most programmed trading systems designed by individuals is
that they are programmed to handle only a small number of cases, "normal
situations", requiring you to break in and use your judgement frequently
when the market stops being "normal". The good ones have more and more
complex code to handle more and more of the special cases.
Bob Fulks
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