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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Atin who wrote (8586)	3/29/2002 5:18:15 AM
From: fut_trade	Read Replies (1) \| Respond to 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.

To: Atin who wrote (8586)	3/30/2002 10:20:27 PM
From: Teresa Lo	Read Replies (1) \| Respond to of 8925

You know, all of this discussion has got me thinking...that both Mike Watkins and Michael Friesen, the first couple of people on the scene here at trendVUE were actually very big into sytems trading at one point, before they switched to discretionary trading. And the interesting thing is that I have kind of gone the other way, and systematized my discretionary trading! Hmm...food for thought here, and all of this just gave me a cool new idea to deal with why many systems have large drawdowns - the change of trend zone. Email on the way. T.