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Bill:
You make a lot of good points in your treatise.Unfortunately the ones
you do not address are:
1.Lack of access to traders successfully using a system [and most of
the reasons not to reveal such traders are "bull"].
2.No access to real time statements to show it is doable.
I have no disbelief or belief you can do what you say,but you are not
trying to sell people something.And if you were you would desrve and
expect to be scrutinized.
As a person who has real time test traded many hyped system I can tell
you this-IF YOU DON'T GET THE ABOVE YOU WILL BE CHEATING YOURSELF.
Thank you for your other excellent comments.
John
------------------ Reply Separator --------------------
Originally From: "bshumake" <bshumake@xxxxxxxxxxxx>
Subject: Accutrader -- The Truth vs Bashing
Date: 01/09/1999 01:22pm
I have been reading with amusement the various posts warning people
away from George Heffernan's Accutrader. The amusing parts are the
speculation that one cannot trade the S&P with 1 point stops and
strive to make profits in the 1 and 2 point range. The part about
not being able to have 80%+ returns
was also pretty good. While I, like the people criticizing
Accutrader, have not traded the system, I do know that the claims are
feasible. I day trade the S&P using 2 minute charts ( accutrader uses
3 or 5 minute charts ) so it is definitely possible to trade that
short of a time frame. My accuracy while not 85%, is currently 79.6%
which is not far removed, I am sure there are some cynics that would
tell people 79% is not possible. Lastly I never risk more that 1 1/2
points on a trade, and more often than not, risk only 1 point per
trade. I have been consistently profitable since I began trading this
method, which is a mechanical, momentum based system that uses simple
off-the-shelf indicators and one price pattern. Also if you ask me
what my slippage is I will tell you it is zero...the reason is, I am
scalping to pick up profits between 1 and 2 points. My target which
uses a limit order ( no slippage with those ) is always between 1 and
2 points from where I enter the market ( not from where my entry stop
is ), My commissions are $20.oo per round turn. Please don't buy
into the notion the trades must be docked $200 or even $100 when
looking at a track record, that can be drastically affected by the
type of order used as well as where the order is placed. I suspect
the idea of $100-$200 slippage originated from some classic trading
techniques that would have you place an order in the same area where
hundreds of other orders are placed.
Also please don't begrudge someone for selling their system as there
are some good reasons for doing so. It could be the trader has
developed a decent system, but has no capital or is under capitalized
( I did call George Heffernan about his system and this is the reason
he gave for selling it. ) Another good reason for selling a system is
that it is not compatible with your personality. I can attest that
day trading is much more stressful than position trading ( for me
anyway ). So if a position trader develops a good day trading system,
trys it for a while but finds it too stressful, he may decide to sell
it and return to position trading. This doesn't mean that the system
was not good or did not make money, it simply means that it was not a
good fit for that particular trader...it could be a marriage made in
heaven for someone else. I am a good example of this, as I have been
position trading for many years, but have been interested in
diversifying over multiple time frames so developed the daytrading
methodology I am currently using. While it is proving to be very
profitable it is also proving to be a very intense form of trading and
more stressful than I anticipated...in other words, while I continue
to trade it, I am not yet convinced that it is a good match for my
personality ( I am currently hoping my personality will adjust
somewhat, given time ). Trading, aside from being profitable, must
also be done in a way that is enjoyable. Life is too short to have it
any other way.
It is relatively easy to develop a profitable system. It is much
harder to implement that system in real trading due to our human
emotions of fear and greed ( But where would the markets be without
fear and greed?).
There are some very good system developers in the world such as Tom
DeMark, who do not trade because they do not have the disposition for
it, but instead opt to sell their services to others. DeMark for
example, was on Tudor Jones' payroll for several years. Here is an
example of a great trader, Jones, buying systems from a developer,
DeMark.
Lastly, do not assume that because someone is profitable in a
daytrading or scalping environment that they would automatically be
profitable in a money management or hedge fund environment. I know
that my own system, while very profitable trading small lots ( 5
contracts is probably the upper limit ), is simply not a feasible
approach when trading larger lots. The result would simply be
partially filled orders, which would quickly erode profits down to
zero. To trade hundreds of millions or often even millions of dollars
takes a much longer term approach than Mr. heffernan's system
provides. So even if it is as profitable as he claims ( and it could
be ), there is a good reason he is not snatched up by a hedge fund and
made a super star trader...his system simply is inappropriate for that
scale of trading and would not work. This is analogous to saying that
a profitable floor trader could be placed in an off-floor environment
and still be profitable using his old floor trading methods. He
wouldn't be, he would have to adopt new methods or go broke.
In closing, let me urge you not to be cynical about good claims.
Certainly there are charlatans and cheats around, just as in any
business, you often have to sift through the crap to find the nuggets.
In accutraders case, a written money back guarantee is offered. Also
when ordering trading books,systems, etc, just use a credit card and
you can always have the charge revoked ( I have done this on one
occasion ).
Also with regards to cynicism, remember there are plenty of
"respectable" financial advisor types that when asked about someone
making money in futures ( say Richard Dennis, Tudor Jones, or Linda
Raschke ) will tell the questioner ( with a bit of a haughty laugh )
that it is simply not possible, that " if it sounds to good to be true
it probably is." As a result, their client walks away from what
might have been a very rewarding and profitable pursuit..
All the Best !
Bill Shumake
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