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<DIV><FONT size=2>Money management is certainly important, however I rate trade
entry as equally important. Really good entries make money management easy
because good entries are very close to the initial stop loss and the cost of
being wrong is very small - I have had times when 70% of my day trade scalps
have been wrong but I've made excellent profits because the losers have been so
tiny. Really good entries are psychologically difficult because the really good
trades are counter-trend so you are buying when everyone is selling and selling
when everyone is still buying. I avoid breakout trades because a) the stops must
be placed so far from the point of entry and b) the large traders know where
those breakout stops are sitting and nearly always run them leading to false
breakouts - always happens at least once on triangles.</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>Earl</FONT></DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>Peter M. Beckwith <<A
href="mailto:capstone@xxxxxxxxxxxxxxx";>capstone@xxxxxxxxxxxxxxx</A>><BR><B>To:
</B>RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxx</A>><BR><B>Date:
</B>Thursday, March 18, 1999 5:06 PM<BR><B>Subject: </B>Re: Trading Systems
and Trading Success<BR><BR></DIV></FONT>
<DIV><FONT color=#000000 size=2>Just some food for thought, I'd like to hear
others thoughts on money management and how this really is the only thing
that traders really need to spend their time working on.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Peter
Beckwith</FONT></DIV></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Thu Mar 18 19:11:01 1999
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From: "RAY RAFFURTY" <rrraff@xxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: CME's Weather Futures & Options
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<DIV><FONT color=#000000 size=2> Hi
RT's</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2> Now
I've heard of everything. The CME plans to offer futures and options on
the temperature! Check out <A
href="http://www.cme.com/news/weather.html";>http://www.cme.com/news/weather.html</A>
I guess I have to switch from CNBC to The Weather Channel to get an edge on this
one.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000
size=2>
Good luck and good trading,</FONT></DIV>
<DIV><FONT color=#000000
size=2>
Ray Raffurty </FONT></DIV></BODY></HTML>
</x-html>From ???@??? Thu Mar 18 16:26:20 1999
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Subject: Re: Trading Systems and Trading Success
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<DIV><FONT color=#000000 size=2>Ira made some interesting comments on trading
systems and trading gurus and how any information gleamed from these resources
is worthwhile in the bigger picture. I would agree to a certain extent,
but if the costs of the system, seminar or service is in the thousands I would
completely disagree.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>I wanted to make a point about how a trading
system is really just a small fraction of the story. Many traders have
probably done a good deal of backtesting or system development and many traders
have also probably tried to find a system that would give them 50%
profitable trades with a 2:1 r:r. When they found this system, they
probably took a couple of trades and had some mediocre results and probably
looked for another system where they could achieve better results(Story of the
average trader).</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Until recently, I was of the belief that it was
really important to have 60-70% of your trades go your way, but now I realize
that this is so NOT important. Sure, if you want to scalp the futures for
a living you better have a high number of profitable trades, but you also better
get ready for trader burnout as well. I would have to agree with Ira that
the system itself is really not a big deal. In fact, I believe you could
give the most basic, barebones system to the world's best futures traders and
they could turn your grubstake into millions in a very short period of
time. The reason I believe this is because they have mastered the art of
money management. The world's best traders will have their biggest
positions on when the market is going in their favor and their smallest
positions on when their is no trend. "Varying the bet size" as
they call it is the SINGLE MOST IMPORTANT INGREDIENT TO SUCCESS. I
emphasize this because over and over again I read about or hear about traders
who are going into the markets looking to scalp money out of these volatile
markets and are losing because of: a) the increased slippage, b) their own
emotional and psychological limitations; c) poor money management; d) no real
plan on how to increase their position size when the market moves into a
trending mode.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>I am no expert in the field of trading, but I
now possess the understanding of what made a guy like Richard Dennis so rich in
such a short time, I also understand why many traders don't care about having
70% profitability in their trades, but would rather have a consistent approach
to pyramiding and liquidating their positions as the trend develops. I
truly believe that the reason many futures traders lose is because they trade
trends as they would sideways action and try to time their entries and exits by
trying to call tops and bottoms as the trend is developing. On certain
days the markets will be forgiving and give you the gift of an easy entry with
automatic profits, once you are in you can now pyramid and build that position,
but most traders will take the sure profits and try to enter the trade later and
at a worse entry only to get chopped up.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Just some food for thought, I'd like to hear
others thoughts on money management and how this really is the only thing that
traders really need to spend their time working on.</FONT></DIV>
<DIV><FONT color=#000000 size=2></FONT> </DIV>
<DIV><FONT color=#000000 size=2>Peter Beckwith</FONT></DIV></BODY></HTML>
</x-html>From ???@??? Thu Mar 18 19:11:09 1999
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Reply-To: dickwebb711@xxxxxxxxx
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From: Dick Webb <dickwebb711@xxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: CME's Weather Futures & Options
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Ray,
The US and europe have something in abundance drinkable water. What
about spring water futures?
Dick
==
Big Lucky Dick
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