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Dear Ira,
For the mostpart I respect your insights [except when you
occasionally get facetiously flippant.].On the other hand I am
befuddled by your "flaw' comment.I by no means think what I do is
perfect,however as you have followed this thread you are aware that on
many occasions I have added and subtracted systems and system
components depending upon market performance.
A system to me is only as good as its operator's performance
interpretation,adjustment and sticktoitiveness.No one has ever
presented to me a system that adapts on its own to changing market
conditions that I have found reliable and easy to use mechanically.
My posts are meant to be an ongoing beacon as to the success or
failure of mechanical system trading.
Any elaboration or source you would care to provide is welcome.As a
matter of fact if you or any one else has such a beast I would gladly
lease or purchase it.
My real joy is that you found only one "flaw".More may be harder to
correct.
Sincerely,
John
P.S. I hope your health has improved.
------------------ Reply Separator --------------------
Originally From: Ira <ist@xxxxxx>
Subject: Re: Mechanical Trading Update-Response
Date: 05/01/1999 09:33pm
I have followed this thread on mechanical trading systems and find
that
there is one flaw. As the markets change the system remains the same.
Any system that is not flexible, and unable to adapt itself to
changing
markets, will create large financial losses in the long run. When I
say
flexible, I do not mean interpretive, I mean one that can adjust to
conditions as the occur. I am not talking about a neural net that is
also
a blind analysis. Ira
John Cappello wrote:
> Dear David,
>
> I can not say I disagree with you especially with your
> credentials.Number 3 has been and will be what I do.Thanks for the
> reinforcement.
>
> John
>
> ------------------ Reply Separator --------------------
> Originally From: "David Hunt" <adest@xxxxxxxxxx>
> Subject: Re: Mechanical Trading Update--April '99
> Date: 05/02/1999 12:13pm
>
> Yep, Overconfidence with a system is the surest sign that you should
> either:
>
> 1. Cut Back positions
> 2. Take a holiday
> 3. Just be prepared for a bumpy ride for the next 3 to 6 months.
This
> is
> probably the best thing to do as it maintains consistency.
>
> Having invested and directed the trading in a Mechanical Turtle
Method
> fund
> I can tell you 3 is the best in the long run. You just have to put
up
> with
> feeling not so good for 9 months of the year and then making it all
in
> 3
> months of the year. Its worth it in the long run but as soon as you
> think
> your 50% return is the way of the world the markets are going to
stop
> trending for a while and take away some of it.
>
> Regards
> David Hunt
> http://www.adest.com.au
>
> ----- Original Message -----
> From: Don Roos <roos@xxxxxxxxxxxxxxx>
> To: <jvc689@xxxxxxx>
> Cc: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Sent: Sunday, May 02, 1999 3:20 AM
> Subject: Re: Mechanical Trading Update--April '99
>
> > <<Eight more months like this or better and California Here I
Come!
> But
> > as always there may be pain in between unless I can keep improving
> the
> > mix.>>
> >
> > John:
> >
> > There will always be alternations of pain and ecstasy in trading.
> > Improving the mix of systems will not prevent the severe drawdowns
> > although may mute them a bit. But just when you feel you should
be
> > adding systems to achieve your goals even faster is when you
should
> be
> > putting on your seat belt for a rough ride. The most common
> > prescription for disaster is increasing exposure rather than
> reducing it
> > during the ecstasy phase. Everything may look like easy street
now,
> but
> > when the typical 3 mo drawdown occurs, the pain will be magnified
if
> you
> > are overexposed. If you reduce your exposure now, your life
> expectancy
> > in trading will be greatly magnified.
> >
> > This is not a lecture, only the voice of one experienced in this
> cycle,
> > trying to help.
> >
> > Take care,
> >
> > Don
> >
> >
> >
> >
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