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Strategies & Market Trends : NetCurrents NTCS
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To: Atin who wrote (8586)3/29/2002 5:18:15 AM
From: fut_trade  Read Replies (1) of 8925
 
"What you're saying sort of goes against the whole point of trendVUE which is to make money in the markets by learning to control risk,"

control risk? You mean place a protective stop?

"understanding how markets play out etc - mostly discretionary at some level. There are techniques, yes - but there is also risk control, position sizing etc too - and those are very individual things"

There is only one efficient way to learn from the market and that is by developing and testing trading systems. One can test a trading system on 20 years of data in a few seconds. The only way to test a discretionary trading style is by manually paper trading on live data, which will take a very long time.

"position sizing"

Well, some people once promoted the "Kelly" system for choosing how much of your account to trade. Works well in blackjack where the rules are fixed. But in the market, position sizing will only get you into trouble.

"your computerized system could very possibly be very wrong for me because I may not be able to deal with the kinds of drawdowns you would with your timeframes."

You are right about drawdowns. They happen at every level, including discretionary trading. The problem with a drawdown in discretionary trading is that you have no idea how large it will be until your account gets busted. With a trading systems one can have a crude idea of what to expect, and one gets constantly reminded that they are there.
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