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Hello Neal,
Tuesday, December 07, 1999, 11:09:42 AM, you wrote:
>>To sum up the claim of discretionary trading is just an excuse for
>>inadequate programming or a feeble attempt to disguise a non existent
>>trading method.
>> Mark Brown
NH> Hey guys,
NH> This is the funniest thing I've read in a loooong time!
NH> Almost all of the successful traders that I know are NOT
NH> mechanical traders, and they don't believe in mechanicaltrading.
That's because they do not possess the skills it takes to program and
seldom do programmers possess the skills to trade. Nothing wrong with
that just a fact.
NH> Mechanical trading can work too, but some methodologies
NH> (discretionary) cannot be automated.
Actually it has been thoroughly documented by independent researchers
at contracted by some of the leading exchanges and one government
sponsored study that. In fact purely mechanical money managers are way
ahead of the game in recent years when compared to those money
managers who claim to be discretionary.
I would go further to argue that I have never seen a discretionary
trader who I could not (in time) capture totally in code.
NH> Just one example, very few mechanical systems take into account that
NH> Greenspan is about to make a speech so your indicators should not
NH> be trusted..
You just have never experienced a system that takes into account
Greenspan. He can be taken into account by not taking him into
account. In other words, if that noise effects you trading then you
are obviously worried about something that is out of your control. You
can not participate and expect to win another mans game. Your concept
of reality is skewed by short term price movement that you would have
to be a pit trader to take advantage of.
We can prepare ourselves for disaster before disaster strikes. Example
if we were long bonds and Greenspan speaks causing the bonds to go
down. We can attribute that to short term noise that will most likely
correct itself and within a day or so revisit the exact same price
levels that were there previous to the speech or report. How do we
know this? By having a thorough understanding of statistics and
probabilities given know historical occurrences. Exact? No but better
than nothing but a feeling a discretionary trader would have me
belive. Now as a mechanical system trader I must consider what if the
price levels are not revisited? I must know that within a certain
period of time over price movement or momentum will override short
term staying commitment. Meaning that "AGAIN" with statistical
knowledge I can expect a mechanical system to reverse its position
"admitting that it's wrong" and continue with original price spike
direction.
NH> I can think of zillions of such examples, which account
NH> for the mediocre performance record of most mechanical systems..
This is insinuating that professionals only give mediocre returns.
Rather I would argue that in "FACT" those people who belive otherwise
are either non realist or vendors who would have you belive otherwise.
NH> Keep an open mind, don't be sheep. Beware Mark Brown or
NH> anyone who tries to shove black-and-white absolutes down
NH> your throat!
I agree 100 percent.
NH> No one can claim that they own the only truth..
NH> Think about it, what is going on here?
The truth is free, in fact the value of the truth is directly inverse
to it's cost.
NH> Look around you, do you see sheep? Do you see a shepherd?
When I visit your web site and see your apparent association with a
vendor of who I know of (but have no opinion of (yet)) I fully
understand where your coming from. It's a shame that you do not have
hat same understanding.
NH> Hmmmm?
YEA! HMMMM?
NH> Best wishes,
NH> -Neal.
NH> -----------------
NH> Neal on the 'net.
NH> Trade well. Train hard.
NH> http://www.halcyon.com/neal/
--
Best regards,
Mark Brown mailto:markbrown@xxxxxxxxxxxxx
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