skeptics and cynics are two seperate schools, being a PhD--i wrongly guessed you knew this. when i said traditional wisdom, i meant what is taught in most trading books over and over again regarding said subject. no cheap tricks here. surfer
I chose 'synic' because I chose 'smiling' first. I know the difference. SmilingSynic to me sounded better than SmilingSkeptic. As if this is worth your time or mine.
Marketsurfer and/or Reckoner (the same person?): Have you ever seen Futures Truth's study of buying via volatility stops and selling with a variety of stops? The study covers 1983 to 1999 and includes over twenty futures markets. The study shows that stops historically have proven effective.
I believe there is a link here between your use of stops (dynamic/ fixed/ whatever) and your idea that past data has limited value for the future. Based on what you have said I hypothesise that your 'systems' contain too many independent variables (one of which will be your stops) and are thus curve fit. This is why they don't work too well when put into practice. I'm sure you won't thank me, but this is valuable information if you manage not to be a giggling cynic long enough to listen.
I'll ignore your insults and once again ask: Have you seen the FUTURE'S TRUTH study covering over fifteen years? They turn your unsupported hypothesis about stops to dust. The tests FT did were not curve fitted, nor did they contain a large number of independent variables. They prove what you refuse to accept: Stops can work (or at least they worked in the past). Whether you accept this or not is irrelevant. It does not matter to me either. You can believe what you want. As for me I believe that you are incapable of setting forth a prima facie argument.
John J. Lothian's funny quote, based on the article I posted by Matt Goldstein on Friday from TSC: Niederhoffer's Second Act Has Plot Twist By Matthew Goldstein The May selloff in stocks couldn't have come at a worse time for hedge fund manager Victor Niederhoffer, who's been working hard to put his infamous 1990s boom-to-bust story behind him. In May, Niederhoffer's four-year-old Matador Fund posted one of its worst months ever, industry sources say. The fund, which specializes in trading stock futures and stock index futures, lost nearly 29% as the U.S. markets began to unravel, reducing the value of Matador's holdings to about $247 million. As of the end of May, the so-called commodity trading adviser fund, which was once up 31% for the year, was 6% in the red since the end of December. Results for June, which is shaping up as another harsh month for investors, could not be determined. http://www.thestreet.com/_tscana/markets/hedgefunds/10292247.html *** Here is what I want to know. Who names something the Matador Fund? The Killer Fund?? Geez!
A coulple of excerpts from the book "Inside the House of Money". Billion $ Fund managers. A number Vic wont see at this rate. So are you still saying a predetermined "I am wrong" stop loss level is not needed? Are these 2 Elephants wrong??? Does Vic Run his losses ? Are these guys below full of SH**? ---------------------------------------------------------------------- The stop-loss is by far the most important aspect to a trade,'' says John Porter, who runs Barclays Plc's cash positions. By setting a limit on how much money a trade is allowed to lose, ``you'll never blow up.'' As the hedge-fund industry matures, it may be sowing the seeds of its own destruction. Investors are becoming less willing to take big risks to make big money. Club Selection Drobny saves the best until last. His final interviewee is identified only as ``the chief investment officer at a several billion dollar hedge fund within the asset management unit of a bank.'' This last chapter crackles with acumen and flair, aided perhaps by that guarantee of anonymity. ``In trading, like golf, it's how you play the bad shots that really matters,'' the trader says. ``Recognizing when you're right is as hard for some people as recognizing when you're wrong. I find it comical to see people cut their profits and run their losses, but it happens all the time.''