|
PureBytes Links
Trading Reference Links
|
Anyone who risks can lose, trader or black box trader. You understand
what you are doing and the risks you are taking. I commend you on your
ability to do so. You are adjusting your positions and investments by
utilizing various black boxes. In some instances you may even get one
black box that says buy and another that says sell for the same item.
With your understanding and adjustments you have found an overall system
that works for you. Very few who trade do. My comments were aimed at
those who are just starting out and have just begun and don't realize what
they are committing to with a black box answer to there trading needs.
This can be seen with the huge loses being accumulated by many on line
traders that think this is an easy way to get rich. the first of the big
law suits are starting to hit the firms as to suitability. In a year or
two it won't be so easy to open an on line account as it is today. Let a
couple of huge judgments come down stating that the firms were responsible
for the suitability of the trades made, whether they spoke to a broker or
not. Look what happened to naked call and put selling after 1987. All
it takes is a huge loss and they learn. Ira.
John Cappello wrote:
> 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
|