I receive a mechanical system update for trading from Marco. He
had a rough year last year with many whipsaws and made no money. I
just received another message explaining why he is in cash and not
in a trade. His system generated a buy on 12/28 but he decided not
to issue a buy signal because of the many whipsaws his system
encountered last year. That signal would have been up over 10 % if
he took it. In his text he explains they take all trades but
sometimes override the signal if there is a choppy market.
My point to this is that even the professional traders that
develope mechanical systems get caught in the " outhinking " the
system. Even they can not follow them if a few trades go bad. They
come up with all sorts of rationale of why they do not follow the
rules, but the bottom line is they do not follow their own
rules.
Many of us do the same thing ( I know I do ) because
psychologically it is very difficult to follow a
system after losing a few times in a row. We are not supposed
to out think a system but blindly follow it. Easy to say, hard to
do. Even Marco does not seem to be able to do it and it is not even
his money at risk.
Posted by frtaylor on 29th of Jan 2012 at 09:06 pm
Yeah, I was really surprised when I read that he overrode the
trade (and of course disappointed, with 20/20 hindsight).
Because I had not been using his system until November, I
avoided all those bad trades, but still I am slightly negative w/
the last two trades being in the red overall. I was ready to
take that last one had he posted.
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Title: mechanical trading system I receive
Posted by randy on 29th of Jan 2012 at 08:27 pm
I receive a mechanical system update for trading from Marco. He had a rough year last year with many whipsaws and made no money. I just received another message explaining why he is in cash and not in a trade. His system generated a buy on 12/28 but he decided not to issue a buy signal because of the many whipsaws his system encountered last year. That signal would have been up over 10 % if he took it. In his text he explains they take all trades but sometimes override the signal if there is a choppy market.
My point to this is that even the professional traders that develope mechanical systems get caught in the " outhinking " the system. Even they can not follow them if a few trades go bad. They come up with all sorts of rationale of why they do not follow the rules, but the bottom line is they do not follow their own rules.
Many of us do the same thing ( I know I do ) because psychologically it is very difficult to follow a system after losing a few times in a row. We are not supposed to out think a system but blindly follow it. Easy to say, hard to do. Even Marco does not seem to be able to do it and it is not even his money at risk.
Just something to think about.
Yeah, I was really surprised
Posted by frtaylor on 29th of Jan 2012 at 09:06 pm
Yeah, I was really surprised when I read that he overrode the trade (and of course disappointed, with 20/20 hindsight). Because I had not been using his system until November, I avoided all those bad trades, but still I am slightly negative w/ the last two trades being in the red overall. I was ready to take that last one had he posted.