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Before I return to my stealth reader mode I owe you some answers to your very valid questions. 1. To the point, where do you see a flaw in Element? The profit factor is too low. I don't think anyone will ever get the results a performance report gives, due to slippage, bad fills, bad luck, and just plain stupid trading. From experience, I know I don't want to start trading a system where the report says (on a monthly basis) less than 50 percent of my trades are profitable. 2. Is Jim trading his system and is it walking forward however you say it is better than Element? Jim is trading his system. Like I said in my first email, Jim is a great system writer but a lousy trader. Actually, he is kind of funny. When the system puts on a trade he is "nose to the screen" and way too emotionally involved with each tick. Jim is the finest technical analyst I have had the pleasure of meeting. When he is in a trade he gives me all sorts of reasons it won't work - "the Bollinger's are moving in, the fibs have not met the target, the r-levels are moving the wrong way, it's Monday, etc.,". Jim has a real problem pulling the trigger, even with a system as robust as this. He is currently working on totally automating the system which is difficult because it uses tick data and you can't trade the ES - you have to trade a specific month. With TradeStation you can't put two tick charts on the same workspace so his creation is still in process. 3. Are you trading it? If not why not? Not yet. Two reasons. I am a stock trader and have been very successful until March 18, 2003. On that fateful day I got emotionally involved with AMZN and EBAY on the short side. In my mind those two overpriced pigs with wings could go no higher. As they rose, I continued to short. I finally covered but we were well into summer. I am still holding onto some short positions, just a few bucks ahead of the margin police, and am waiting for this son of bubble to turn around. Second reason, like both you and Charles Meyer wrote, "Have you ever seen something that looked too good to be true"? I watch this darn system, real time, almost every day, tick by tick, waiting for it to fall apart and it hasn't. It takes trades I never would have taken and makes a profit. I would like to see the system backtested in a real bearish market but with the new TradeStation 7.1 there doesn't seem to be anywhere to get old data. Like I said, this thing has only been backtested since August of 2002. 4. If it is better than Element and walks forward, there are a lot of people I know who would like to make your friend Jim richer by leasing it. As for the walk forward, like I said, I watch it daily. Today, September 22, 2003, it closed a short position from Friday at a profit target ($930.00) and is short 4 contracts from this morning. I will admit Jim occasionally tweaks it, usually some obscure technical epiphany he has at two AM on a Sunday. Yes, it optimized, in my opinion overly so. But it does work profitably, though not nearly as well, on the NQ and some stocks, like MSFT and ORCL, where there are enough trades in the day to get a lot of tick data. I asked Jim if he wants to lease or sell it, and he seems a little paranoid about it. He doesn't want to see a firm get a hold of it because "once everybody knows, it won't work". He was kind enough to share it with me because I helped, very little, with some of the actual coding. Plus, there were differences between his machine using TradeStation6 and mine using TradeStation7. Last, but not least, I am attaching his results for the way he trades it. Unlike Element ($20000 and 5 contracts) Jim uses $50000 and carries up to 12 contracts, one at a time from different signals. I believe the report shows one loosing week since August of 2002. In my original email I was trying to come as close as I could to Element's capital and contract requirements. Your post was taken as constructive and only showed the thoughts of an intelligent and concerned trader. Prosper. John ------------------------ Yahoo! Groups Sponsor ---------------------~--> Buy Remanufactured Ink Cartridges & Refill Kits at MyInks.com for: HP $8-20. Epson $3-9, Canon $5-15, Lexmark $4-17. Free s/h over $50 (US & Canada). http://www.c1tracking.com/l.asp?cid=6351 http://us.click.yahoo.com/0zJuRD/6CvGAA/qnsNAA/zMEolB/TM ---------------------------------------------------------------------~-> To unsubscribe from this group, send an email to: realtraders-unsubscribe@xxxxxxxxxxxxxxx Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/ Attachment: Jim2.xls
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