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The assumption that you make the same on winning trades as losing trades is not
correct. what if you lose $1000 per trade and make $3500 per winning trade, or
lose $100 per trade and gain $500 per win. Then all you need is one in three
and you still are $500 ahead sans commissions, or 1 in 4 and you are $100 ahead
sans commissions. If you are paying $50 commissions are paying to much. Ira
GREHERT@xxxxxxx wrote:
> In a message dated 98-08-27 22:18:44 EDT, you write:
>
> << 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.
> >>
>
> Hypothetically - Let's say I got this system that wins 50% of its trades and
> loses 50% of its trades. The average win is $1000. The average loss is
> $1000. Transaction costs are $50 per trade. How can an excellent money
> management system turn this purely random array of trades into a profitable
> system?
>
> I believe that a lot of traders optimize their systems irrationally and
> conclude that their systems are profitable when only the optimizations make
> them appear profitable. Real time trading results in losses because they're
> trading a lousy system, not because they're using poor money management.
>
> Best regards,
>
> Jerry Rehert
> August 27th, @ 11:22 pm
> Check My WebPage-UPDATED 8/26/98:
> http://members.aol.com/grehert/
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