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To: Electric who wrote (43717)	5/21/1998 7:49:00 AM
From: Patrick Slevin	Respond to of 58727

I honestly don't watch much CNBC and would not know David Faber from dave_s. The problem is not so much knowing that the programs have or even are hitting. The need is to anticipate the onslaught of programs. Even if you have a 10 second edge...in futures, anyway....you can establish or change a position to take advantage of the program. Otherwise, it's ancient history as the programs are hitting because, usually, they ebb and flow so quickly all you can do is watch....perhaps try to anticipate and catch the next wave. As far as programs hitting without PREM changing first, I am sure that is a conscious strategy and have heard people predict "buy programs" around such and such a time or price because of this or that. Very often they are correct but to be honest I think most of the time these people are using subjective or intuitive reasoning based on experience.

To: Electric who wrote (43717)	5/21/1998 8:20:00 AM
From: Patrick Slevin	Read Replies (2) \| Respond to of 58727

Remember that guy who took second in that paper trading contest with a 255% return in 3 months? tradecomp.com He actually performed the trades in his own account and made $127K, I think it was, based on a $50K investment. I thought you might be interested in his comments on the contest and trading in general. ~~~~~~~~~~~~~~~~~~~~~~ I have had quite a few questions and comments regarding the trading competition that I took part in. To save some bandwidth, I'll try to answer those questions and comments in this post. First of all, I did not win the competition, I came in second place. I had a return of 255.6 % and the winner had a return of 406% I was leading the contest up until the last few days. At that time, the eventual winner was not in the top three. In this case it does appear likely that the winner "bet the farm", so it is true that the first place finishers are often "one trade wonders" in contests. In a limited time contest, the proper approach is more one of gaming theory than trading. Play tight, looking for good trades in the early stages, and then "bet the farm" near the end if you aren't currently in the top three. Remember though, that while this approach might work for one individual, there were 20 or 30 individuals that "blew out" in the attempt. I wasn't there to win the contest, I was there to test some system, indicator and trading ideas. In this regard, it was very important that the trading be no different from the trading I do every day. This meant detail to money management and staying within reasonable risk and reward parameters. Many of the trading rules I applied were no different than what I and many others have posted to this list many times. It really comes down to finding a methodology that suits you, testing it to make sure it gives you a statistical "edge", and then trading the methodology consistently. As far as I can tell, these are the only qualities that separate the professional trader from those who must eventually leave the game. The point being that I might never win a contest, but I'll always be in the top 10 or so. It isn't unusual at all to be able to take money from the markets. The talent lies in not giving it back. O.k., how does one take money and keep it? Thinking about all that's been said on the list in the past, I've tried to boil it down to a few tenets of my trading: No edge? NO TRADE Can't get your price? WALK AWAY Everybody agrees with me? TAKE PROFIT Everybody disagrees with me? DOUBLE THE POSITION. System says trade? I TAKE THE TRADE. System says exit? EXIT THE TRADE. ALL TRADES AT ALL TIMES ARE TAKEN ONLY IN ACCORDANCE WITH TOLERANCE TO RISK. (capitalization, risk vs. reward etc.) I guess that's it. It's not aesthetically pleasing or brilliant, but it does pay the bills. Acually for me, analysis and trading theory are much more fun than the trading itself. Trading is just the final result in which one quietly collects the monetary proceeds of correct research. In answer to a question on Maximum drawdowns, there are two popular definitions. The first is the amount lost by a string of consecutive losing trades before a winning trade is experienced. The second is a subtraction of the highest equity level in your account minus the lowest equity level in your account, the difference being the max dd. In the case of the contest, the largest peak to trough equity drawdown on the account was 14,000 dollars. The account was already in the black when this DD occured. In answer to a question of which systems were used: They were my own systems indicators and methodologies (one of these methodologies was NMP, (New Market Paradigm) and is fully disclosed in this months issue of TASC magazine.) The rest were based on psychological matrixes built off of mathematical representations of fear and greed in the market. An article on this subject is due out in the August issue of TASC magazine. Find what works for you, prove it gives you an edge, and follow tenets similar to what I stated above, and it should help out your equity. Walt Downs CIS Trading