|
||||||||
|
||||||||
|
||||||||
|
|
 |
System Analysis
I'm currently reading a book by Thomas Stridsman who is an analyst of trading systems (real ones). It is really opening my eyes as to the true task involved in trading profitably long term - it is not a game, it is a serious complex business.
The gist thats sinking in so far is that a trading system can have all kinds of hidden performance factors that you cannot know without constant monitoring, analysis and adjustment over time - for instance, a trading system may work like magic for a period of time, but then stop working and deliver catastrophic results instead. Why? Not so much that the market "changed", but due to the fact that the system had long term fundamental flaws that were invisible to you. Imagine how many people fell for that one. Mr X gets into trading and after a period of time he masters his off-the-shelf system and makes great gains in his personal account, then offers to trade other peoples money. He thinks he's cracked the code, quits his day job and becomes a "professional money manager". Life is good. That's probably as far as most trading newbies dreams go, right? He's THERE... He is the master of his system and himself. But then one fine day the old magic methods seem to mysteriously stop working and start producing negative results. Panic grips him - he does not understand what is happening. The market is doing it TO him. Some kind of gigantic coiled serpent has awakened in the market and is running amok, ripping his accounts to shreds in the process. He trades emotionally more and more in an effort to defeat this violent invisible beast, producing even worse results and pretty soon... *gulp!* RUINED! Like a little happy lemming he just galloped off the edge of the cliff. I am not deterred by this, it just makes the whole thing even more interesting - but I once again see that I need to set my sights further out. Strangely I'm enjoying the subject more and more, even though my original goals have virtually disintegrated in the face of the cold hard reality of this business. I think because my goals are becoming disintegrated (proving to be wildly uneducated delusions), I am free to just engage the subject fully and honestly and enjoy it. It must be outcome dependence that ruins it. |
|
|
| PREMIER SPONSORED LINKS |
Any information or material contained in the websites owned and operated by The Connors Group, Inc. (the "Company"), including but not limited to the THEFXMARKETS.COM, TRADINGMARKETS.COM, and THEMONEYBLOGS.COM websites (collectively, the "Websites"), and in the related services and products is provided for informational and educational purposes only. The information or material is NOT a recommendation or solicitation to buy or sell any security or other investment vehicle. Please review our full Disclaimer prior to using the Websites. Furthermore, your use of the Websites and all related services constitutes a legally binding agreement under the Company's terms and conditions. Please review the Terms and Conditions of Use. To better comprehend the Company's other practices and policies, please review the Privacy Policy and the Editorial Policy.
Copyright © 2009 The Connors Group, Inc.
<< My Home | The FX Markets Blog Home