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This is a big topic to discuss, but
beware of unrealistic expectations.
if you can make 50% per year, it still takes years to get rich.
and very few people make this. Its nice to be the very profitable 10%
if your making good money consistently via systems or discretion and it
suits your lifestyle
then stick with it.
There are some definite shifts in thinking of system developers.
the trend has gone from sell code -> lease code -> give code to brokers to
trade for their clients
-> find a few very wealthy people and trade for them taking a good cut of
the profits and give the code to no-one
People stealing intellectual property is the driving force in this trend
Leasing per contract and or the developer not letting his code out to anyone
gets around the
issue of too many people trading a system.
I have been in trading for many years, and only ever met one person who
often made 50% per month
regularly. I meet many people who claim to. I argue, show me your broker
statement, then work backwards.
going for (sometimes hollow) claims of money, paying for the course / or
software, then trading is not the way to go.
Michael, this also shows true slippage, liquidy and the other many issues to
go wrong in live trading
there are some legal issues with this, as legally you have to stamp
hypothetical on your broker statements.
I don't understand why, but just believe that to be the case.
Nothing good is ever free. It costs lots of $ in loss's and time to make
something that works.
I've bought and leased many systems, and written some of my own.
Many fell apart in the last 18 months due to low volatility of the futures
stock indices.
I now go for either a system that has several thousand trades on one
indices,
or can trade 4 or more indices with no changes in parameters.
That sort of robustness has higher probabilities of future returns being
similar to past
comments welcome
pz
----- Original Message -----
From: "Jimmy" <jhsnowden@xxxxxxxxxxxxx>
To: "Peter Zwag" <peter1@xxxxxxxxxx>; "Omega-List" <omega-list@xxxxxxxxxx>
Sent: Tuesday, September 14, 2004 8:54 PM
Subject: Re[2]: system trader
> Peter,
>
> I can agree with most of what you say however have you bought or
> leased something that works long term and works well? It doesn't
> sound like it. You have good criteria. It has been some time since
> this topic was discussed and it has been discussed for many years on
> this list. Bottom line is why would anyone sell a good system. A
> good system can make you very rich in a very short time. Or at least
> that is my experience. So why would you sell it for a few hundred
> dollars to a few people only to find everyone was selling at the same
> time you were or buying at the same time? It makes no since. Every
> really good trader I've known will not give you the system he is
> trading. He is making so stinking much money he would never give it
> up. I've built systems for years and nothing will trade like a good
> discretionary trader can trade. He may change what he does over time
> but he always make tons of money. 90 percent of the traders in
> futures lose money. So 10 percent of the traders make it all. Get
> your Excel loaded up and start computing how much money you will have
> if you only double your money every week or two. Ok only every month.
> Would you sell that? I wouldn't.
>
> Jimmy
>
> Tuesday, September 14, 2004, 5:33:55 PM, you wrote:
>
> PZ> This is a massive topic...
> PZ> Why do you guys want to re-invent the wheel?
> PZ> There are people who are systems designers by profession.
> PZ> While I admit much of what's out there is not good, there's also
> PZ> a number of good things with broker statements to match system trades.
> PZ> Good luck to you designing systems. While the end system might be
simple,
> PZ> the task of thinking it up is not easy at all. Believe me, cause I've
been
> PZ> at it for many years.
>
> PZ> Personally, if your going to spend your hard earnt money, spend some
more of
> PZ> it and lease or buy something that works. Better to do this and give
it to
> PZ> "the market"
> PZ> I think that's stats if 90% of people loose most of their initial
capital in
> PZ> 6 months trading futures.
>
>
> PZ> In short, this is what I feel you should be looking for in system
trading
> PZ> 1) large sample of trades. At lease 1000 trades in sample size.
> PZ> the more the better
> PZ> 2) Long period of time in sample size. Preferably the full length of
> PZ> whatever contract you trade
> PZ> 3) Have sufficient capital. 2 or 3 times the max drawdown
> PZ> 4) A profit factor of at least 1.5, preferable 2 or more ($win /
$loss)
> PZ> 5) A $return / max $drawdown of at least 10
>
> PZ> Happy trading
>
>
> PZ> ----- Original Message -----
> PZ> From: "Justin Fanning" <Justin@xxxxxxxxxxxxxxxx>
> PZ> To: "Riley Robertson" <rileyrobertson@xxxxxxxxxxx>
> PZ> Cc: <omega-list@xxxxxxxxxx>
> PZ> Sent: Tuesday, September 14, 2004 10:44 AM
> PZ> Subject: Re: system trader
>
>
> >>
> >> Riley Robertson wrote:
> >>
> >> > Hi List & Justin:
> >>
> >> > When you suggest it is the System trader that can make a living,
> >> > do you mean a trader who knows computer programming so well
> >> > that he can write his own systems and use it?
> >> > or a trader who is very disciplined and his attitude+trading habit
is
> >> very systematic?
> >>
> >> I consider anyone who operates by a set of *written* mechanical rules,
> >> to be a
> >> system trader. Some I have seen employ teams of guys working around
the
> >> clock,
> >> more commonly now people are using computers.
> >>
> >> > If it is the former, does it mean all the discretionary traders are
> >> losers?
> >>
> >> The consistent big winners (in my observations) were all mechanical
> >> system traders,
> >> discretionary traders can hit the odd big win, but (in my opinion) lack
> >> consistency
> >> and are long term losers.
> >>
> >> > If so, how can the discretionary traders pay someone to write the
> >> programming for him
> >> > without that programmer using the formula himself and trade with it?
> >>
> >> The standard legal framework of Non Disclosure Agreements (NDA's) plus
> >> someone's
> >> professional reputation is usually enough to keep most things secret.
> >> Not to mention the
> >> average man on the street known nothing of data feeds, brokers,
exchange
> >> rules, contract
> >> specifications etc. Trading isn't exactly something you can get your
> >> head around in 5 mins.
> >>
> >> The use of external programmers is something I would like to do more of
> >> myself,
> >> in fact I would like to sub-out my whole IT operation and concentrate
> >> more on the
> >> core trading.
> >>
> >> Often I find myself modifying my trading ideas to fit in with
> PZ> TradeStation,
> >> I have explored the path of professional programmers before and no
doubt
> >> will again.
> >> The freedom to dictate exactly how you want the code to run, knowing it
> >> won't be you
> >> writing it is quite liberating for the mind!
> >>
> >> Having said all of this... I am constantly stunned by the simplicity of
> >> trading systems
> >> used by banks & other institutions, often as simple as a single moving
> >> average.
> >>
> >>
> >> > RR
> >>
> >> Justin
> >>
> >>
> >>
> >>
> >>
> >>
>
>
>
> --
> Best regards,
> Jimmy mailto:jhsnowden@xxxxxxxxxxxxx
>
>
>
>
>
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