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Bill:
<BR>this is one of the most intelligent discussions I have seen on the
subject since I have been in this group. there are certain trading
styles that can be used on or off the floor. Using multiple time frames
is one that can only be used off of the floor. While on the floor
you are limited to the number of stocks, futures or options that you can
trade, depending on the pit you are in. Off the floor you can select from
over 50 futures, 2800 NYSE stocks, and 10,000 NASD stocks as well as over
20,000 options. Who really has the advantage? ON the floor
you have to make a market, off the floor you pick your shots. Thank
you for your input, Ira
<P>bshumake wrote:
<BLOCKQUOTE TYPE=CITE> <FONT COLOR="#000000">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</FONT><FONT COLOR="#000000">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.</FONT> <FONT COLOR="#000000">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.</FONT> 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. <FONT COLOR="#000000">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.</FONT> <FONT COLOR="#000000">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 ).</FONT>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</BLOCKQUOTE>
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</x-html>From ???@??? Sat Jan 09 21:15:42 1999
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From: BL <blee3@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Random Walk Index
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Does anyone have a simple numerical example of how one goes about
calculating the Random Walk Index?
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