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Dear JS.
I only use your initials ao that a reader will not be confused with 2 Johns.
1. Your comments about Element profit factor are valid, however it has a
higher profit per trade and that is why I will continue to monitor it. I
would rather trade a 50% profitable system with a $1000 average net profit
per and a $500 average net loss per trade. I do not have Element numbers
in front of me, but I believe that is the scenario but the numbers are not
exact. Plus it has A low drawdown...in range of 15%.
2. A selectively and controlled lease of a system I would doubt to affect
performance...but such is the mentally of a system developer.
3. I hope you pull out of your shorts Ok and only wish you the best.
4. I will study all of this more carefully when I am home.
I believe you have a lot to contribute and am happy to see you wander from
your stealth mode.
Bona fortuna,
John
> Dear John
>
> Before I return to my stealth reader mode I owe you some answers to your
> very valid questions.
>
>
> 1. To the point, where do you see a flaw in Element?
> The profit factor is too low. I don't think anyone will ever
> get the results a performance report gives, due to slippage, bad fills,
> bad luck, and just plain stupid trading. From experience, I know I
> don't want to start trading a system where the report says (on a monthly
> basis) less than 50 percent of my trades are profitable.
>
> 2. Is Jim trading his system and is it walking forward however you say
> it is better than Element?
> Jim is trading his system. Like I said in my first email, Jim
> is a great system writer but a lousy trader. Actually, he is kind of
> funny. When the system puts on a trade he is "nose to the screen" and
> way too emotionally involved with each tick. Jim is the finest
> technical analyst I have had the pleasure of meeting. When he is in a
> trade he gives me all sorts of reasons it won't work - "the Bollinger's
> are moving in, the fibs have not met the target, the r-levels are moving
> the wrong way, it's Monday, etc.,". Jim has a real problem pulling the
> trigger, even with a system as robust as this. He is currently working
> on totally automating the system which is difficult because it uses tick
> data and you can't trade the ES - you have to trade a specific month.
> With TradeStation you can't put two tick charts on the same workspace so
> his creation is still in process.
>
> 3. Are you trading it? If not why not?
> Not yet. Two reasons. I am a stock trader and have been very
> successful until March 18, 2003. On that fateful day I got emotionally
> involved with AMZN and EBAY on the short side. In my mind those two
> overpriced pigs with wings could go no higher. As they rose, I
> continued to short. I finally covered but we were well into summer. I
> am still holding onto some short positions, just a few bucks ahead of
> the margin police, and am waiting for this son of bubble to turn around.
> Second reason, like both you and Charles Meyer wrote, "Have you ever
> seen something that looked too good to be true"? I watch this darn
> system, real time, almost every day, tick by tick, waiting for it to
> fall apart and it hasn't. It takes trades I never would have taken and
> makes a profit. I would like to see the system backtested in a real
> bearish market but with the new TradeStation 7.1 there doesn't seem to
> be anywhere to get old data. Like I said, this thing has only been
> backtested since August of 2002.
>
>
>
> 4. If it is better than Element and walks forward, there are a lot of
> people I know who would like to make your friend Jim richer by
> leasing it.
> As for the walk forward, like I said, I watch it daily. Today,
> September 22, 2003, it closed a short position from Friday at a profit
> target ($930.00) and is short 4 contracts from this morning. I will
> admit Jim occasionally tweaks it, usually some obscure technical
> epiphany he has at two AM on a Sunday. Yes, it optimized, in my opinion
> overly so. But it does work profitably, though not nearly as well, on
> the NQ and some stocks, like MSFT and ORCL, where there are enough
> trades in the day to get a lot of tick data. I asked Jim if he wants to
> lease or sell it, and he seems a little paranoid about it. He doesn't
> want to see a firm get a hold of it because "once everybody knows, it
> won't work". He was kind enough to share it with me because I helped,
> very little, with some of the actual coding. Plus, there were
> differences between his machine using TradeStation6 and mine using
> TradeStation7.
>
> Last, but not least, I am attaching his results for the way he trades
> it. Unlike Element ($20000 and 5 contracts) Jim uses $50000 and carries
> up to 12 contracts, one at a time from different signals. I believe the
> report shows one loosing week since August of 2002. In my original
> email I was trying to come as close as I could to Element's capital and
> contract requirements.
>
> Your post was taken as constructive and only showed the thoughts of an
> intelligent and concerned trader.
>
> Prosper.
>
> John
>
>
>
>
>
>
> To unsubscribe from this group, send an email to:
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>
>
>
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