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tern. Woody Hayes said three things can happen when you pass the football and two of them are bad. In systems, there are three things that can happen, and two of those are bad. You can have a bad system (or a system "optimized" to work in only one market, like stocks, or one environment, like the bull market). You can have a good system but not trust it enough to follow every signal. To get a system you can trust and use, you must know its parameters and strengths or weaknesses. In other words, you are never going to purchase a "system" whose results year in and year out are better than the average trend-following system. So you may as well design your own and stop frustrating yourself. |
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Neal: Well, the people advertising trading systems won't like to hear this, and neither will people promoting back-testing software packages. |
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Grant: The best advice is to read everything you can and practice before you trade real money. It's amazing how people will spend years of study and thousands of dollars to become a lawyer or a doctor, but somehow they think they can enter the high income profession of futures trader without doing a bit or preparation. Again and again, I have seen public traders lose tens of thousands of dollars and be none the wiser after all their time and money. They should have put that lost $10,000 into buying every futures book they could find. All that time watching prices could have been poured into a self-directed "college course" learning about the market. Nothing is going to work until you have confidence it is going to work, and that takes time. |
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Neal: So buying a piece of software won't cut it. |
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Neal: Will Chicago style open outcry disappear? |
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