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Hi Brent,
They started with 30 accounts, but thru out 4 because they where traded by
the same person, leaving 26. If you read further, 9 accounts had less than
30 trades and where statistically insignificant. They where thrown out,
leaving 17 accounts.
Five of the six winning accounts where thrown out because they took high
risks, and according to them, will become losers sooner or later. Well,
maybe, but they can not prove it.
Seems to me the numbers where both manipulated and to small a sample.
Good luck and good trading,
Ray Raffurty
----- Original Message -----
From: BrentinUtahsDixie <brente@xxxxxxxxxxxx>
To: RAY RAFFURTY <rrraff@xxxxxxxx>; <realtraders@xxxxxxxxxxxx>
Cc: <Realtraders@xxxxxxxxxxxxx>
Sent: Monday, August 09, 1999 8:33 PM
Subject: Re: RT_GEN: Day Trading News
> >As I understand this report, it used a very small sampling of day traders
> >from one office in Mass. It samples only 17 individuals of which 6 where
> >making money.
>
> It's not quite the way Ray heard it, although the sample was small. Pasted
> below is the info from the report.
>
> Brent
>
>
> Analysis of Customers' Day Trading Accounts
>
> Thirty (30) short-term trading accounts were randomly selected for
analysis
> from accounts that had been maintained at the Watertown, Massachusetts
> office of All-Tech in 1997 and 1998. Copies of customer account statements
> had been obtained in connection with Massachusetts' proceeding against
> All-Tech.
>
> The Project Group retained Erik Sikowitz of STZ Analytical Services in New
> York, New York to tabulate account statement data and quantify trading
> activity. Mr. Sikowitz made calculations of profits and losses;
commissions;
> turnover; and cost-to-equity ratios.
>
> The Project Group retained Ronald L. Johnson, a Securities and Futures
> Consultant, of Palm Harbor, Florida to analyze and evaluate the trading
> performance of the accounts. Mr. Johnson's findings and conclusions are as
> follows:
>
> The average account was open four months, had an average annual turnover
of
> 278, and a cost/equity ratio of 56%. Six of the accounts were traded by
two
> individuals so four accounts were removed to avoid skewing the performance
> analyses.
> All trading in the accounts was analyzed and evaluated (4,093 trades in 26
> accounts). Seventy percent of the accounts lost money and were traded in a
> manner that realized a 100% Risk of Ruin (loss of all funds).
> Only three accounts of the twenty-six evaluated (11.5% of the sample),
> evidenced the ability to conduct profitable short-term trading.
> The statistically significant day trading (2,754 trades in 17 accounts)
was
> evaluated. Sixty-five percent of the accounts lost money and were traded
in
> a manner that realized a 100% Risk of Ruin (loss of all funds)
> There was only one successful day trading account in the 17 accounts
> analyzed, and this account did not have trading returns commensurate with
> the risks to which the account was exposed.
> The most successful account in the study had limited short-term trading
and
> no day trading.
>
>
>
>
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