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> Hi Tom
>
> The "secret" (hate that word) is that FR reduces c/s
> quickly when you move into drawdown mode.
>
> Anytime you increase contracts, you run the risk
> that your method will slip into a prolonged drawdown.
> But somewhere along the way, you will want do that
> or you will never make use of the profits you have made.
> This is true of whether you increase numbers after 12 months
> profits or after every 30% etc.
>
> Where Ryan's work excels is the response the approach has
> to increasing or decreasing number of contracts.
>
> While I take your point we can at anytime slip into prolonged
> drawdown mode, the fact is the response to equity returns
> is such that we are unduly exposed. Indeed, had I had access
> to the approach during 1996, the max drawdown of 28% would
> never had been reached because of the size reduction.
>
> regards
>
> ray
>
> R Barros
> 101/25 Market Street
> Sydney NSW 2000
> Australia
>
> Voice: 61 2 92673470
> Fax: 61 2 92673478
> E-Mail: rbarros@xxxxxxxxxxxxxxxxxx
>
>
> ----------
> > From: Tom Stein <comfut@xxxxxxxxxxxxx>
> > To: rbarros@xxxxxxxxxxxxxxxxxx; RealTraders Discussion Group
> <realtraders@xxxxxxxxxxxxxx>
> > Subject: Re: [fixed fractional vs fixed ratio]
> > Date: Tuesday, August 18, 1998 10:52 PM
> >
> > Ray......
> >
> > How would this ever work?????????
> >
> > Even though you have a system with only one set-up that has a 67%
> winning
> > ratio.....the wins/losers come in streaks. The 67% is derived over a
> number
> > of trades. In effect, what Ryan is promoting is to "trade the system".
> If
> > I have a system that has tested 67%
> > over 1000 trades, I could have had 670 winners in a row and 330 losers
in
> a
> > row.
> >
> > I have seen people test out a system that had only had 3 max. losers in
a
> > row.....AFTER 3 losers they start to increase their position size,
> because
> > they feel the odds are greatly increased that a winner is
> > coming.....oops.....the winner comes, but after they are out of
> $$$$$$....
> >
> >
> > Tom Stein
> > comfut@xxxxxxxx
> >
> >
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