Allan--an excellent post
You have zeroed in on the essence of what is entailed in systems trading and especially vis-a vis the importance of following the system.
I know that one can make an excellent return trading futures -- and that one can do this with a mechanical trading system. I also know, from personal experience, that one can lose money very quickly if one does not have a disciplined approach to trading futures.
The irony is that on SI we have a host of people who trade options and lose money doing so -- futures trading is much easier than options trading, IMO. But in both cases the key to being successful is the need for discipline and not letting ones emotions getting the better of one.
After my recent success with a couple of trades, I received a flurry of private mail/messages which seems to happen each time that I have a good trade and then things die down again. One of the notes that I received was from some one who was interested in futures trading who indicated that he thought that it would be helpful to others contemplating the same thing to have an imaginary portfolio of say $100K -- a la the OJ wager --and show how the value of this porfolio is impacted with futures trading in the S&Ps and perhaps other futures markets.
I have mulled over this and am concerned about doing so for two reasons -- first, as you know, futures trading is high risk and I would not want to give the impression through the appreciation in value of an imaginary portfolio that it is easy to make money trading futures. The other reason is that an imaginary portfolio is the equivalent of simulated trading which is a far cry from real-time trading--less from an entry and exit stand-point and more from the stand-point of the disciplines entailed in following a system. Finally, I don't know whether I have the time or the patience to do this conscientiously for any length of time.
So I have not made up my mind whether to do this though I suspect that it would be an interesting, if academic, exercise --in terms of the ultimate results over, say, a year.
BTW--what markets do you trade?
Regards
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