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Strategies & Market Trends : The Final Frontier - Online Remote Trading -- Ignore unavailable to you. Want to Upgrade?

To: TraderAlan who wrote (12045)	8/4/2007 12:50:40 PM
From: TFF	Read Replies (2) \| Respond to of 12617

"I wonder how much those black boxes back tested results for periods when VIX was 20-40, not 10-20. We also know the folks using them are the same ones who thought they were geniuses playing the mortgage debt markets." The market to me feels more "normalized", equal parts fear and greed. I doubt these intraday mechanical systems are doing very well.

To: TraderAlan who wrote (12045)	8/6/2007 4:50:46 PM
From: gaj	Respond to of 12617

thanks for the info. on that. i've now seen it on a couple stocks i traded (on nyse) where that pocket happened, and i had to resist my instinct to get out IMMEDIATELY (i try to have very low risk trades) and give it a little more wiggle / time to see how things react. nice part for me is i'm usually looking for 1-2 hour trades, so that increased vol. works right into my sweet spot when i'm trading well. and it opens up a whole nother world of stocks i normally didn't look at. i can understand, however, how it can totally mess with you and your style. from my older days, where i worked as a techie at a (then-major, non-equity) house...there was serious black box testing every day by middle office. however, the OTC stuff was priced according to internal evaluations. when those internal evaluations (different from the street) were deemed wrong by higher mgt, there was a huge write off. but that was during good times, when spreads were much wider in that area than now. when i hear of things such as BSC's stuff last couple weeks with their re-evaluations, i think back to that.