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"Statistically insignificant" is a gross understatement. All these traders
were in the same office. Maybe the "coaches" at this office were
particularly bad. Maybe the successful trainees "graduated" and now trade
out of their house using a T1 line. Maybe some of the "losers" came back a
few months later with a new bankroll, learned from their mistakes, and are
now profitable. This is a classic example of government regulators
intentionally finding the answers it wanted to in the first place. What's
their solution? More regulation- which means more jobs and a bigger budget
for them. We'll all pay for it through taxes and higher fees...
Bruce
----- Original Message -----
From: RAY RAFFURTY <rrraff@xxxxxxxx>
To: BrentinUtahsDixie <brente@xxxxxxxxxxxx>; <realtraders@xxxxxxxxxxxx>
Cc: <Realtraders@xxxxxxxxxxxxx>
Sent: Monday, August 09, 1999 10:49 PM
Subject: Re: RT_GEN: Day Trading News
> 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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