Quote of the Week

"All these years I had been sustained by an illusion - happiness through victory - and now that illusion was blurred to ashes. I was no happier, no more fulfilled, for all my achievements.

Finally I saw through the clouds. I saw that I had never learned how to enjoy life, only how to achieve. All my life I had been busy seeking happiness, not finding it." -- Dan Millman's character in the Way of the Peaceful Warrior.

MT

Quote of the Week

"In times of change, learners inherit the Earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists." -- Eric Hoffer

Sorry everyone for the lack of posts or response to emails.  I'm trying to meet a November 1st deadline for a new trading system.  And between that and the entire family being sick from a nasty little cold bug...well I haven't been up for much else.

I do appreciate your patience...and hope to get back to the normal routine soon.  In fact, once I push this trading system to production...I plan on taking a nice long break from the trading system turret.  Catch a few breaths before my next run.  Ha ha!

Until then, hop on over to the StockTickr Blog and read Jon Tait's interview.  One of the best interviews yet from StockTickr.  Jon's a smart cookie and shares some great insights into system trading and market behavior.

Later Trades,

MT

Quote of the Week

"Many questions are unanswerable.  Many answers are questionable."  -- from a fortune cookie

Wow, the above quote is so true.  I have dug a little deeper into everything I have worked on the past several years.  Calling into question my beliefs and attitudes towards the market.  I was so wrong.  It all started from a seed that Eric Crittenden planted into my head.  "Sounds like an exercise in curve-fitting", he said, in reference to one of my system ideas.

Then a friend introduced me to the concept of focusing on what you don't like to do and casting it aside in order to free yourself for the things you do like to do.  The butterfly began to flutter...

"It has been said something as small as the flutter of a butterfly's wing can ultimately cause a typhoon halfway around the world." - Chaos Theory

Next, I watched the recent show on Sabermetrics where they discussed Bill James and many of the very cool things brought out in Moneyball.  Flutter, flutter.

Finally, my recent foray into the hazards and pennywinks of developing a trading platform has brought out a very interesting focus to my trading.  What would I like in a platform?  What am I really trying to test?  How is a certain test helpful to my bottom-line?

And all that has helped me to understand what I've been missing.  I've been focusing on the wrong thing!  So much of my time was spent on my next trade.  Kinda like in Sabermetrics where they found too much focus was on RBI's or Homeruns.  Bill James found Outs was where the focus should be. 

And I think in trading...the focus should be on the only fixed rule that I know exists:  If you don't use margin...your losses are limited to 100%.  But, as long you don't cap your profits in any major way...your gains are infinite.  With that in mind, where should your focus be?  And what kind of formulas and tools can we use to measure this new focus?  For example, the smoothness the Sharpe Ratio tries to show becomes something of a throw-away...a tool/formula used to measure the wrong focus in your trading.  Don't understand?  Maybe this will help.  Or maybe not:
http://www.fooledbyrandomness.com/0603_coverstory.pdf

Later Trades,

MT