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Dear RT:
I enjoyed reading some of your insightful posts about trading systems. I
though, maybe it would be worthwhile to discuss whether a system ( either
mechanical or discretionary) is necessary for a successful trading. Do we
need to have a system as a decision support in our decision making process
for trading? If yes, do we follow our own self-made system or a carefully
selected one? If not, then what are some of the individual characteristics
( such as experience, commitment and discipline) and/or contextual factors
such as time pressure, outcome feedback, and incentive schemes) that may
influence our reliance to a trading system? And how these aforementioned
factors may reduce ( or increase) our trading performance and accuracy?
Best, Ned
-----Original Message-----
From: Mark Brown <markbrown@xxxxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: Tuesday, December 07, 1999 1:03 PM
Subject: [RT] Re: Don't be sheep! {01}
>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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