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This is very interesting and, if true, says alot about human expectations
when it comes to the game of speculation. $100,000.oo of trading capital
per S&P contract is certainly reasonable given current daily
ranges/volatility. A $21,700.oo drawdown is certainly not an unreasonable
drawdown especially if net profits were $177,900.oo, and still most people
bailed. Assuming the facts are true, it indicates that most people
attempting to trade are doing so with way too little capital, or cannot
emotionally handle very reasonable drawdowns.
The June issue of the Robb Report has an interesting article about Terrance
Leon Jr., one of the worlds most consistently successful golf hustlers.
Leon makes some points about golf wagering that I thought were very
applicable to the above paragraph and speculation in general. He makes a
big point of the fact that even many of the worlds best professional
golfers are great golfers but poor gamblers. They can play a great game
when they are playing for prize money, but wilt when exposed to what Leon
calls real heat, the prospect that they might personally have to pay off a
big number. The key to gambling at golf is: The winner is immune to
pressure, he can always play to his ability. The loser, no matter how good a
golfer, can't. It's no different with speculation. Good systems are only
half the equation, if even that. Being able to take the heat during
drawdowns and stick to the game plan is essential. And if you're under
capitilized, which most traders are, it makes sticking to the game plan even
more difficult, and losing almost a certainty.
All the Best !
Bill Shumake
----- Original Message -----
From: John Cappello <jvc689@xxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Sent: Sunday, May 30, 1999 11:39 AM
Subject: Top Step S&P System
> FYI:
> About a month ago I spun a question re. any brokers with experience
> with the subject system.One response directed me to a broker familiar
> who only trades it with $100,000 accounts.Performance summary showed a
> net profit of $177,900 and drawdown of $21,700.There were only 56
> trades from 4/7/98 to 4/7/99.I was told most people dropped oout due
> to the drawdown unless they had a large account.
>
> Comments?
>
> John
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