Trading In The Zone and The Holy Grail

[charlie_robinso]

Hi All

To me winning is ,having a edge and knowing where that edge is,
simple as that

charlie

[comenow]

Hello MikMason,

Why are u so obssessed with trend following systems not working? It is as if u don't want them to work. Sorry, but u are talking absolute rubbish when u say that automated system lose money. Well, not all of them. Some of the best systems are automated. It is hard to make money out of a ranging market, but in the fx market there are almost always enough movements up and down to make money with a trend following system. Ed Seykota is still trading apparently. Cheers.

[MickMason]

Originally posted by comenow



Why are u so obssessed with trend following systems not working?

Where did I ever say that trend following systems don't work? I trade trends, what do you think Fibonacci is?


Sorry, but u are talking absolute rubbish when u say that automated system lose money.

Then show me a profitable one! All the automated systems posted on this forum lost money in the long run, that's a fact. Don't bother posting past-performance results either, we all know how much hindsight trading can make.

I get the impression from your posts that you are a novice trader, that's fine, but learn the business first before making outrageous claims that you are unable to support with evidence.

Gary was about the closest to an automated system until he hit a ranging market unfortuantely, and as for Bob, lol, well he never even got off the starting blocks

Cheers!

Mick

[comenow]

Hey Mick,

i can't be bothered really. good xmas mate.

[MickMason]

Originally posted by comenow

Hey Mick,

i can't be bothered really.

Yeah huh, I'm kinda not surprised.....


good xmas mate.

Yup, and you, have a good one!!



Mick

[Smurf]

Hello autofx

I followed your link to FXCM and read what they had to say. I'm not exactly sure how it's supposed to support your claim that mechanical systems rule. First of all, I'm not sure that hedge funds possess any sort of superior knowledge. In the stock market at least, only a precious few ever manage to beat the S&P500. Secondly, if we attribute superior skills to them, then isn't it remarkable that they seem to be shifting strategies from mechanical systems to discretionary ones? I have no idea if it's true and I really don't care, I'm just quoting from your link.

While I'm at it, I don't believe in the old 'cut your losses and make your profits run' either. It contradicts my personal experience. I have written over 100 and testet well over 200 systems in MetaStock in all sorts of instruments. The funny thing is, 90% of all systems deteriorates badly once stop losses are introduced, and about 60% of them are improved by introducing profit stops. As the song goes "Would somebody please explain / The reason for this strange behaviour".

Happy holidays,

Smurf

[autofx]

The superiority or inferiority of mechanical systems will be debated
here and elsewhere for a good long time.

One thing that I hope no one would take too much issue with is
the assertion that a mechanical system does remove the emotion
from trading. Clarification: If a mechanical system is
automated, emotion is absent from the trading decisions and
actions, though not from the owner of the account, obviously.

Those who practice discretionary trading and claim to do so
successfully will naturally argue that they have mostly learned
how to keep their emotions from prompting counterproductive
actions in their trading. They may not see how they could map
their decision making processes to programmable computer logic,
but that doesn't mean it couldn't be done.

Another assertion I sometimes see from that "side" is that they
understand market psychology and have learned how to use
the market's collective psychology to their personal trading
advantage. I believe only the rarest individuals have mastered
their OWN psychology, much less have learned to use that of
other people against them. I don't bother with that. Pure
mechanical trading completely removes considerations of my
psychology, your psychology, the news, being competitive, trying
to make someone else go broke, etc. None of that factors in.

Someone who ENJOYS the emotional rushes they get from
trading, and trade partly for those sensations, would have no
reason to change -- unless they start getting serious about
making money.

We all do what we do for our own reasons.

[autofx]

Originally posted by comenow
Hello MikMason,

Why are u so obssessed with trend following systems not working? It is as if u don't want them to work. Sorry, but u are talking absolute rubbish when u say that automated system lose money. Well, not all of them. Some of the best systems are automated. It is hard to make money out of a ranging market, but in the fx market there are almost always enough movements up and down to make money with a trend following system. Ed Seykota is still trading apparently. Cheers.

comenow,

As you seem to be aware of, an automated system doesn't have
to rely on exclusively trending action to make money.

A tactic like taking profit on half of your position when the market
reaches a certain level, combined with a breakeven or profitlock
stop, is a simple example of something that preserves your
capital and even makes you a little money when things are a bit
rocky.

There will be trading conditions where a system will generate
strings of losses, conditions where there is a mix of gains and
losses, and conditions where there are mostly gains. Keeping
wins more numerous and/or larger than losses is all that is
required to come out ahead over time. Easier said than done,
but it still works. It is an especially maddening concept for those
who simply can't STAND being wrong or having a losing trade.

Smurf is dead wrong about NOT wanting to cut losers short and
let winners run. What, we don't do these things because they
sound like cliches? No! They sound like cliches, but they are true.

"Eat less and exercise more to lose weight."

Oh, I'd never do that, it's a cliche!

As this thread has illustrated, there are those who get it, and
those who don't. Representatives of both camps have come out
of the woodwork.