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To: Allan Harris who wrote (42301)	5/5/1998 3:24:00 PM
From: Tom Trader	Read Replies (2) \| Respond to of 58727

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

To: Allan Harris who wrote (42301)	5/5/1998 4:24:00 PM
From: Stoctrash	Read Replies (2) \| Respond to of 58727

"I position trade the S&P based on a neural net. Early on, my partner and I couldn't figure out why the neural net's hypothetical track record was so superior to that of our respective trading accounts. Comparing notes, we discovered that neither of us were taking every trade. If Greenspan were talking, or the FOMC convening, or a big economic number was coming out, or worse yet, if we just didn't agree with the signal, we passed." Yep...turn off the TV. BTW...what Neural SW do you use? Lots of them on the market these days and I'd like one integrated into Excel or something.

To: Allan Harris who wrote (42301)	5/5/1998 5:13:00 PM
From: Patrick Slevin	Respond to of 58727

This is absolutely what I refer to. Your Neural Net approach is similar to the approach used by Nemer or Tom Trader. It is a mechanical system, devoid of human intervention. Not uncommon. If you put all that time and effort into a system it would be unwise to taint it with opinion, I understand that fully. For my own part, my system works for me and I intervene as I feel necessary. Neural Nets cannot re-act in a logical fashion because of the way they are programmed. Humans cannot re-act in a logical fashion because the issue is emotional. Each has it's pluses, and each it's own minuses. Whichever works for the individual is the optimal way to go. I, for my own part, am a dispassionate sort of fellow most of the time and, as someone with an engineering background, I have managed to be a a sort of self-styled Ludditte with respect to trading systems. That is to say, they may work for you; but I understand them too well, so I cannot use the approach because they make me nervous. I can understand why systems work. They shall never work for me because, well damn....I could never believe it's that easy to coin money, knowing as much as I do.