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Bill E. wrote:
>...and if you take that very sensible logic
>and advice to its ultimate conclusion
>you end up day trading a single market!
Well done, Bill! I loved the way you took the wisdom of Mike's excellent
post and twisted it into yet another sales pitch for your book! However,
although you refer to "logic," your statement is a "DNF," i.e. Does Not
Follow (unless you've got books to sell!).
The issues to which Mike referred will arise whether one trades a dozen
markets from daily charts or a single market from tick charts. One big
difference is that in the latter case it happens much more rapidly. Faster
is not necessarily better. It will be better for some, and worse for
others... in some cases much worse.
One can make a strong case that slower is better for those who are "learning
the ropes." It can be very difficult to fully evaluate, psychologically
process and learn from each and every trade when you're making two or three
trades a day, day after day. Also, a shorter time-frame generally yields
smaller average trades, which give less margin for error. This can be very
costly for a new trader, because the less practice you've had at trading,
the more mistakes you're going to make. If you're new to trading it's quite
possible that you will make mistakes on every single trade. Having time to
learn from your mistakes before repeating them could save a lot of $$$, and
perhaps a lot of grief.
I'm sure we'll now hear from Bill that nothing could be further from the
truth, and that day-trading the T-bonds is the best of all possible worlds,
because he wants to sell his book. Not having seen his book I don't have
any opinion on its value. However, these endless sales pitches about the
"best" way to trade miss the point completely. There simply isn't any
"best" way to trade. The question is not "What's the best way to trade?"
but rather "What's the best way for <me> to trade?" It's quite a different
question.
My guess is that for <most> new traders, the best answer is <not> going to
be "Day-trading the T-bonds using a purely discretionary method."
Your mileage may vary.
Cheers,
Jeff Kingery
Mike wrote:
<snip>
> Remember, it is never enough to test a trading system,
> see a 30% drawdown and say "well, that's not too bad -
> I can handle that." Make sure you can handle that
> if you're in the drawdown for 6 months to a year,
> and you're required to continue to put trades in,
> day after day, with the result of most trades
> being losers. That will happen with EVERY TRADING SYSTEM
> at some point (although the drawdown duration will differ)
> - do you have the stomach to endure?
>
> Make absolutely sure you can say "yes" before you
> put a cent into any trading system and start trading.
> Just my two cents.
>
> Michael Strupp
> Chicago IL
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