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I beg to differ with you. Give me any system and with an excellent money
management system you will make money. I have worked with systems that have an
accuracy rate of less the 25% and still been able to make money with them. That
is not as good as just throwing a dart. You can make money by throwing a dart and
flipping a coin, if you understand what you are doing and what the system is
designed to do. Every time you make a trade the odds are 1 in three. Not very
good. All any system does is increase the probability of a successful trade, it
doesn't change the odds. I discussed a system with the manager of a fund that
made 14% per year. That meant that he had to make better then a 27% return to
cover his costs and fees in order to pay 14%. I asked him what his accuracy rate
was and he said that it was less then 37%. It is not only the system, it is the
trader using the system. I am no genius, I have had my own disasters, and there
are probably much better traders out there then I am. The fact remains there is no
fool proof system, mechanical or otherwise.
GREHERT@xxxxxxx wrote:
> In a message dated 98-08-27 07:12:22 EDT, Proffittak@xxxxxxx writes:
>
> << Every system works >>
>
> I disagree completely. There's a false impression that following your system
> is more important than the system itself. This is ridiculous. It's extremely
> important to mechanically follow your system - granted......But its more
> important to have a profitable system. Most poorly designed systems trading
> mechanically on "near random data" will break even before transaction costs.
> Transaction cost will cause most poorly designed systems to lose money.
>
> So what's the answer? What's a NON-poorly designed system? What's a
> profitable system?
>
> It is a system with "an edge". A system that takes advantage of some
> inefficiency in the market. A system that profits from the psychological
> extremes of market participants.
>
> Let's stop professing that "every system works" and only the trader is at
> fault. If you lose money with a mechanical system, it may not be you. The
> system may suck!
>
> Best regards,
>
> Jerry Rehert
> August 27th, @ 07:09 pm
> Check My WebPage-UPDATED 8/26/98:
> http://members.aol.com/grehert/
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