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Some people recommend never optimizing a system, or for that matter only
using simple moving averages. If you do lots of testing you find that only
certain systems are profitable on particular securities, some securities
don't respond to trading systems at all. The best system on some securities
is buy and hold, testing reveals this. Another point is you don't have to
spend a fortune on a system. One of the best systems is a simple moving
average cross over. I read somewhere that a channel trading system is the
lowest risk system. With Metastock you can graph equity, a system with a
smooth, upward sloping equity curve over several years is best. The most
important thing is money management. Some traders make money and they are
right only 50 % of the time. If you start with enough equity (some say
$200,00 minimum) and use a good system you should make money in the long
term. Finding a system that is profitable on long and short trades is
difficult, some only trade the long side.
Good luck trading
Larry
>From: "Mike Higgs" <moongate@xxxxxxxxxxxxxxxxx>
>To: "Larry Muir" <trdoptions@xxxxxxxxxxx>,<Proffittak@xxxxxxx>,<ist@xxxxxx>
>CC: <realtraders@xxxxxxxxxxxx>
>Subject: Re: systems Vs money making
>Date: Fri, 30 Jul 1999 08:21:50 -0400
>
>Larry,
>
>I don't disagree with what you are saying. All I was saying is that there
>is a good reason that most vendors have hypothetical results only - the
>results are optimized that can't be replicated in forward testing or actual
>trading. Just out of curiosity, of the 120 systems you tested, how many
>were consistently profitable with consistently acceptable drawdowns within
>a range of security types.
>
>Regards,
>Mike
>--
>Aboard 35' Edel Cat "Moongate" in New Bern, NC
>
> > From: Larry Muir <trdoptions@xxxxxxxxxxx>
> > To: moongate@xxxxxxxxxxxxxxxxx; trdoptions@xxxxxxxxxxx;
>Proffittak@xxxxxxx; ist@xxxxxx
> > Cc: realtraders@xxxxxxxxxxxx
> > Subject: Re: systems Vs money making
> > Date: Friday, July 30, 1999 1:46 AM
> >
> > To clarify:
> >
> > Almost every month in The Technical Analysis of Stocks and Commodities
> > magazine there is an article on a particular trading system usually
> > contributed by some of the top people in this field in the world. In the
> > article the results of using the system are published showing yearly
> > profits, drawdowns, yearly gains vs a buy and hold strategy etc. etc.,
>in
>
> > great detail so you can see how it actually performs. You don't pay for
>this
> > information apart from the cost of the magazine. There are some good
>systems
> > in these articles. And you can have them for free. Get a copy of
>Metastock
> > and you can enter the code for these systems and test them and utilize
>them.
> > You don't have to pay thousands of dollars to buy a trading system. I
>bought
> > 100 trading systems for Metastock for about $300 and entered another 20
>or
> > from TASC, with the touch of a key I can test them all on a particular
> > security and see which is best. TASC had an article on a Gaan swing
>trading
> > system you could use with just pen and paper, no computer, and it was
>free.
> > Before you use a system you have to backtest it.
> >
> > >From: "Mike Higgs" <moongate@xxxxxxxxxxxxxxxxx>
> > >To: "Larry Muir"
><trdoptions@xxxxxxxxxxx>,<Proffittak@xxxxxxx>,<ist@xxxxxx>
> > >CC: <realtraders@xxxxxxxxxxxx>
> > >Subject: Re: systems Vs money making
> > >Date: Wed, 28 Jul 1999 22:00:46 -0400
> > >
> > > > From: Larry Muir <trdoptions@xxxxxxxxxxx>
> > > > To: Proffittak@xxxxxxx; ist@xxxxxx
> > > > Cc: realtraders@xxxxxxxxxxxx
> > > > Subject: Re: systems vs money making
> > > > Date: Wednesday, July 28, 1999 3:39 PM
> > > >
> > > > I read an article once that said the entry is 10% of the trade and
>the
> > >exit
> > > > is 30% in importance, the most important is money management.
> > > > In another article the author said you need $200,000 to trade with
> > >(someone
> > > > else said $60,000), so you can survive drawdowns. You can create
>your
>
> > >own
> > >
> > > > trading system or buy one, or there is systems monthly in TASC
>(fully
> > >tested
> > > > etc.) for the price of the magazine. The holy grail of trading is
> > > > discipline.
> > >
> > >
> > >Fully tested is a big misnomer!!!!!!!!! I have yet to see a system
>being
> > >sold that has anything but hypothetical results. They may be out there
>but
> > >I haven't found one that has broker statements to substantiate it. No
> > >broker statements = No winning system.
> > >
> > >
> > >Regards,
> > >Mike
> > >--
> > >Aboard 35' Edel Cat "Moongate" in New Bern, NC
> >
> >
> > ______________________________________________________
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