Quote:
Originally Posted by dpaterso
Craig:
Thanks for the input. You make some good and interesting points. I suppose if I / we were all following the systems 'to the letter' i.e. 'purely technically' then we would all be showing the IDENTICAL results i.e. I do forget to 'factor this in'.
You and I are just going to have to 'agree to disagree' on the 'Enron' system I'm afraid.
Let me explain it another way (from MY point of view):
The 'Enron' system is NOT implemented to 'hide losses' or give erroneous gains. I DO understand your way of thinking BUT one thing that you do NOT say is this: what IF your Accounts (A) amount was $10 000 and you were sitting with open postions that were showing a PROFIT of another $10 000 (as opposed to a loss)??? In other words: you Total (p+a) was $20 000??? What would YOU say was your ACTUAL account 'balance' THEN??? While YOU may say that it's STILL only $10 000 I'll 'bet you my bottom ZAR' that MOST would say that their account 'balance' is $20 000!!! To coin on of my favorite phrases: 'It's not over 'til the fat lady sings' in my opinion i.e. neither a profit nor a loss is a profit nor a loss UNTIL REALISED. On the OTHER hand (technically speaking): 'Enronning' a position IS different from closing a position, realising the loss, and then opening that same position later on when you get a signal ESPECIALLY if you're trading with 'logical' orders and positions AT DELTA. I will probably get the opportunity to demonstrate this fact soon enough with EUR/CAD!!! The fact of the matter is that it's NOT the same as either closing a position and realising the loss OR carrying the loss UNTIL price turns in your favor. I've tried to explain this to the best of my ability but before I go and type up PAGES of explanation let me rather use EUR/CAD as an example IF IT HAPPENS!!!
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Well, I guess I will have to wait and see for the EURCAD example, b/c based on Trichet's comments this week, and CAD strength unfortunately it appears you'll get there. Now I guess the flip side is while riding it down to a $-500 position, holding the position open via enron, and then working it off when the reversal comes is valid, I'm more of the mindset that I'd rather cut that loss off early (say -$100 or -$150) and that gives me $350 more to place into other good signals, instead of tying it up on a position that is going to take a lot longer than anticipated to develop.
I guess that's just a difference in our trading styles, and I'm not sure if/when that will ever change. The key is that everyone needs to find what works for them to let them trade, be profitable and sleep at night. I think this is why Wilder doesn't say his book is *IT*, but merely a good starting point to build upon.
I can say I've been reading the book Market Wizards Interviews with Top Traders, and there are successful traders all over the map. There's one guy who tries to predict tops and just holds it as long as the fundamentals don't change. Some live off their charts, some don't even look at them. Some don't use stop losses, many have SL varying from 5-10%, and some will close positions if they don't turn profitable within 1-2 days. So I believe there is *ONE* approach that works for everyone, but that *ONE* approach is also different (slightly or greatly) for everyone, which is the tough part - trying to identify what works and doesn't work both in the markets and for yourself.