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Dear Ira,
I know your comments are directed to the List and to Lynn.The bottom
line is that there are no Mechanical Systems that would suit you since
you are so knowledgeable[ sincerely meant].There are others like
myself who do not have or desire your knowledge base and have designed
or found their own mechanical methodologies for success.
You are comparing apples to oranges as far as I am concerned.There are
dyed in the wool real traders like yourself [when you are up to
trading] and dyed in the wool mechanical traders who respond to their
system results the same way you would respond to your indicator
conflicts.
This matter can not be treated with a broad brush.No system expects
you to do anything unless you choose to do so.I likewise know few real
traders who use mechanical systems.I certainly do not believe your
methods are "flawed" and fail to see the "flaw" in mine.
As I have said before it is like a system portfolio and the make-up of
the systems in the portfolio change as the results come in.I have
reported my results when down and when up.Fortunately to this point I
have been profitable overall.That being said I can also lose.But so
can a real trader.
Sincerely,
John
------------------ Reply Separator --------------------
Originally From: Ira <ist@xxxxxx>
Subject: Re: Mechanical Trading Update-Response
Date: 05/02/1999 09:21am
I object to any system, whether it be financial or poitical, that
expects you to
follow blindly down the path layed out by someone else, without any
understanding
of the system. Some traders have the ability to last because of
financial
strength. The same as the theory that you can't lose if you double
your bet
everytime you are bound to at least break even. The premise is that
you have an
infinite amount of capital to play the game. As far as adjustments
go I will
give you one example. I have used it before. The market goes up and
down and
there is a pattern in that oscillation. Gann, Fib., Hurst and many
others have
proven that fact. Observation will prove that to any astute observer.
The falacy
comes when the statement is made, that the cycle will remain
constant. Hurst
proved that the cycles vary and that there are cycles within cycles.
So any
trader can select any cycle that suits his/her temperment and
risk/money
management system. No black box here. Indicators are mostly tied to
the closes of
price and to the price bars. Let us use Stochastics as the example
this time.
Almost all charts use 14,3,3s as the numbers for stochastics. Even a
black box or
two will use those numbers, if stochastics is one of the indicators in
the black
box system. If you have read the formulas used in stochastics and the
way they
where intended to be used, you will note that the 14 should be X. For
the first
number should be the 1/2 cycle of the item you are trading. Now
everyone using
14,3 3s is getting bad information, unless they are trading a 28 bar
cycle and
there actually is 28 bars low to low. How many of you out there use
stochastics
and just found out that you are getting bad information and risking
your money
using a bad premise. Simply by looking at the cycle you are trading,
and cycles
do change, you can make that adjustment and have the indicator give
you the right
information. Knowledge is power, but understanding how to use that
power creates
success. Hope that this answers your question in part. Ira
MRLYNNG@xxxxxxx wrote:
> In a message dated 5/1/99 9:37:41 PM Pacific Daylight Time,
ist@xxxxxx writes:
>
> << 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 >>
> ******************************************
> Ira:
> There are so many conditions in the markets that I am not sure what
you mean
> by adapting to the changing markets. Can you be more specific or
give
> examples. Thanks.
> Lynn
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