Dottom, Sorry for my mistake regarding the real drawndown of 45 % as you say, the figure I quote I remember from a financial paper. I lost on that trade.... :0)))))
I don't need to build a system to beat the "best intuitive trader". I just need to make money consistently, period. You seem to want to argue a religious war here of "human brain vs computers" or "Big Blue vs Kasparov". Go to an AI board if you want to argue that. The points discussed here by several people who seem to be trading their mechanical systems is that trading systems do work. I won't argue that trading systems can or cannot outperform discretionary trading- that debate will never be solved. But I will put up my system against your results if you want to put a friendly wager on it. How about 6 months performance results starting Dec 1? We'll wager an average win, normalized for $100k account. The point is that a good system works the same every day. The best systems can adjust to the different market conditions. A discretionary trader functions differently based on a lot of human factors.
Dottom, anyway, how YOU known that his appoach his 100 % mechanical ???? maybe he uses some discretionary input... Did you work with Richard Dennis together ?
Hitman, Your reference to things being "far more than the sum of their parts" speaks volumes. What is the nature of this trading intuition of yours? Where does it come from? Beginning traders use their intuition, its all they have, but invariably they fail miserably. Why? Obviously we are not born with a trading intuition. It is not congenital or innate. Trading intuition is not necessary for the survival of our species. From where does it arise? At what point do we acquire this wonderful 'reliable' intuition of yours? How can we be sure of it? You suggest something that is greater than the sum of its parts- this invokes the supernatural. Something beyond the physical realm, something spiritual. Please define this supernatural thing you ardently seek called 'intuition'? FIREHAWK PS Science has defined "love" in terms of actual physio-chemical events.
Dottom, I take your bet, you known what soon I start trading for someone and to verify my results I will give Rtharp or Baron or someone with integrity on this board access to the account so they can see my results every day. OK, 6 months performance and what about 10000,-$ bet size ?
You guys keep refering to this "discretionary" input of the human trader. This is nothing more than illdefined vague "feelings" (unsubstantiated, irrational, and subject to disastrous cognitive errors) that a trader superimposes upon the more explicit parts of his system. "Discretion" is not something to be revered or desired in and of itself, but a natural byproduct of yet to be defined unknown variables, something that requires further clarification and evaluation. As this process continues, the trader's implicit market assumptions become more explicit and are then incorporated into his mechanical system. FIREHAWK
>I agree with you, for raw calculations a computer >beats the human brain. But for pattern recognition >the human brain is still number one. That is another blanket statement that is provably incorrect with thousands of real world examples (the first and most obvious one is simple OCR). First, it is incredibly difficult to separate "raw calculations" from "pattern recognition" since the first is required for the second. I'll give you a perfect example of a pattern recognition problem that the human brain would be useless in solving but has recently been solved quite easily through computers -- I was involved in the development of the yellow first down line that is used on many football broadcasts. The system that delivers this line to viewers is chock full of computerized pattern recognition solutions that the human mind is worthless for. For reasons I won't go into here, we need to know which of the numerous cameras at the event has been selected by the director to be "live" to the audience at any given moment - this is known in the business to be the camera that is "tallied". Now, how can we know this with certainty? -- all the raw camera feeds and the output (network) feed are run though our computer and by comparing all these feeds (pattern recognition) 60 times per second the computer can determine which camera the director has tallied. Now, let's put the best human brain available on this pattern recognition task and have it watch all the raw screens and the output screen and have it try to tell us within a 60th of a second when the director changes cameras and the identity of the selected camera -- simply can't be done. And btw, the described problem is the *simple* one in the system -- try having the human brain recognize all the colors in each frame and determine which patterns to "paint" yellow (grass, mud, turf, etc) and which patterns not to paint (jerseys, flesh, shoes, helmets, balls). The human mind is an amazing piece of work. Something simple to our minds such as vision may be lifetimes away to a computer. Trading is nothing like vision IMO. JB
FireHawk, Intuition is build on experience. A newbie can have the intuition necessary to be a good trader but he will probably not make money from the first day. I want to take the bet with ANY of you that trades with a mechanical system... Like I said, i will give someone access to the account . How about that ......