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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: Darren who wrote (595)	7/3/1998 1:05:00 PM
From: Robert Graham	Read Replies (2) \| Respond to of 1729

IMO a mechanical system defined in this way does not take into account at least a couple important elements that the beginner trader simply does not understand. First, markets do change and are continually changing. For example, what system worked before October 1987 may not work after that market correction. What system worked October 1997 may not work now, since the market has also change since then into one that is more dominated by liquidity. But people who have not been in the market simply do not understand or can appreciate this until they have been through multiple cycles of the market. Another element about the market is the trader themselves. Will that trader be able to rigorously follow the buy and sell signals of a given system no matter what the stock or the market is doing and no matter how they feel about it? Would they be able to commit money following 3 losses in a row? 4, 5, or 6 losses? How about after a drawdown of 20% or more of their capital which may amount to lets say $30,000 or more? The evidence from experienced traders who devised such a system to be used by others found that it is a rare trader who can follow a mechanical system without trying to second guess the system. Many appear to look for that "secret" that will make then riches in the market. Sorry to disappoint, but it is simply not there. The market has been around for over 100 years. I do not think there has not been a system yet devised that has remained successful in the markets over the long run. Otherwise, I am sure the news on such a system would of come out by now. That system would be worth a high cost to those who want to make their money this way. I am sure there would be people willing to pay six figure prices for such a system. For the beginner looking for that easy road to riches, perhaps it is time to get to the work at hand: learn about the markets and go through the lengthy and challenging learning curve that cannot be sidestepped in one's pursuit of success in the markets. And then develop a system that will work for themselves instead of adopting a system they have no clue about how it works or its limitations or specifically how well it will work for them. IMO there is simply no other approach available that will be consistent and continue to work well into the future but to develop your own approach and "system" to the markets. Bob Graham