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<DIV><FONT color=#000000><FONT size=3>Dear RT:</FONT></FONT><FONT
size=3></FONT></DIV>
<DIV><FONT color=#000000><FONT size=3></FONT></FONT><FONT size=3>I enjoyed
reading some of your insightful posts about trading systems. I though,
maybe it would be worthwhile to discuss whether a system ( either mechanical or
discretionary) is necessary for a successful trading. Do we need to
have a system as a decision support in our decision making process for
trading? If yes, do we follow our own self-made system or a
carefully selected one? If not, then what are some of the individual
characteristics ( such as experience, commitment and discipline) and/or
contextual factors ( such as time pressure, outcome feedback, and incentive
schemes) that may influence our reliance to a trading system? And how
these aforementioned factors may reduce ( or increase) our trading performance
and accuracy?</FONT></DIV>
<DIV><FONT size=3></FONT> </DIV>
<DIV><FONT size=3>Best, Ned</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 solid 2px; MARGIN-LEFT: 5px; PADDING-LEFT: 5px">
<DIV><FONT face=Arial size=2><B>-----Original Message-----</B><BR><B>From:
</B>John Hayden <<A
href="mailto:sente@xxxxxxxxxxxxxx";>sente@xxxxxxxxxxxxxx</A>><BR><B>To:
</B><A
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx</A>
<<A
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx</A>><BR><B>Cc:
</B><A
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx</A>
<<A
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx</A>><BR><B>Date:
</B>Tuesday, December 07, 1999 7:04 PM<BR><B>Subject: </B>[RT] Re: question
and CTA's {02}<BR><BR></DIV></FONT>Hi Gary; <BR><BR>Its easy, say you invest
100K with a CTA, at the end of the year after all fees your account is worth
$150K, your account increased 50%. The reason this is so good is the amount
of money that he actually used to create that $50K increase. Most good CTA's
will use on average about 20% of available equity for margin money
(margin/equity ratio), the balance goes into T-Bills.<BR><BR>So, if you
invested $100K, our hypothetical CTA would use $20K to trade with, place the
other $80K in T-Bills, and proceed to create a net profit of $50K. This is a
actual return of 250%. The trick question is ascertaining the margin/equity
ratio. Most CTA's in their disclosure documentation specify that they will
not exceed a 50% ratio. Assuming the worst ratio possible this still
translates to a 100% return.<BR><BR>The secret to successful trading is
managing your risk exposure, everything else is secondary.<BR><BR>Best
regards,<BR><BR><BR><BR><BR>At 04:28 PM 12/7/1999 -0700, you
wrote:<BR>>>>> <BR>
<BLOCKQUOTE>John, thanks for the very enlightening posts.<BR><BR>I have
a really basic question: how is a CTA's return calculated? I see all
these CTA's reporting 10%, 50%, maybe even 100% in a year, and that
doesn't seem all that astounding to me. Certainly my system is returning
a lot more than that, and has for over a year. (Too bad I haven't been
able to trade it with real funds until recently. :-( ) But I wonder if
maybe they're reporting it differently than I am.<BR><BR>Does a CTA's
return assume zero leverage? I.e. is a $100k return on an account
trading the S&P considered 100k/(1400*250) = 28.6%? What if the
system has low drawdowns, allowing high leverage, and the account
started the year with $50k? Is that still an (unleveraged) 28.6%, or is
it 200%?<BR><BR>I'm just puzzled why people get excited about a 50%
return, when I would have done *way* more than that if I had been able
to trade my system for the past year. I'm certainly no market wizard. Am
I comparing apples to
oranges?<BR><BR>Gary<BR><BR><BR><BR><BR><BR></BLOCKQUOTE><<<<<BR><BR><BR><BR>.o©º°¨¨°º©[<?color><?param 0000,8080,8080>
John Hayden<?/color>
]©º°¨¨°º©o.<BR>¨¨°º©o.,.o©º°¨¨°º©[<?color><?param 0000,0000,8080><?smaller>
Have a bodaciously outrageous day!<?/smaller><?/color><?smaller><?/smaller>
]©º°¨¨°º©o.,.o©º°¨¨<BR><BR><BR></BLOCKQUOTE></BODY></HTML>
</x-html>From ???@??? Wed Dec 08 06:49:06 1999
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From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Subject: [RT] Re: Tested my PC on y2k {02}
Date: Wed, 8 Dec 1999 07:06:56 -0700
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Status:
Not widely known but you can download upgrade to Q98, which is Y2K
compatible, for free from Intuit web page. Looks like you started this year
with same resolution I did - be Omega free for the millennium.
Earl
> ----- Original Message -----
> From: Gwenael Gautier <ggautier@xxxxxxxxxxx>
> To: List RT <realtraders@xxxxxxxxxxxxxxxxxxxxxxxxxx@realtraders.com>
> Sent: Wednesday, December 08, 1999 4:21 AM
> Subject: [RT] Tested my PC on y2k {01}
>
>
> I didn't check TradeStation as it's gone from the hard drive, but all
> other apps worked. Except my 95 Quicken, which displays weird symbols in
> lieu of a date, but stores my expenses all right at the correct weird
> symbol date...
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