[kimchi]

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...but there is NO magic bullet foolproof sytstem that will conquer the markets.....period.

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I mentioned this is my OP. Everybody starts off thinking thsy have some magic key. I have discovered myself over the years that there's no magic key. The only wizardry (imo) would be mastering your own behaviour as you make discretionary trades.

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This is what makes the best traders in the world what they are...they have the talent/discipline/split second ability making qualities needed to be flexible in their decisions,and not being tied into a numbers specific system or program.Their money management disciplines are uncanny as well


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I agree too. Ed Seykota (paraphrased):

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There are 3 golden rules for trading
1. Always follow the rules
2. Always follow the rules
3. Know when to break the rules

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A good trader knows when to follow his rules and when to change or modify the rules. A machanical system eventually degrades, but only an expert knows when this is simply an expected drawdown, or the system has lost its edge.

Richard Dennis and his crew did fantastically in the 1980s trading a simple trend-following method. But markets do change (from a trader's perpective) and this model no longer is practically tradeable - although it still has an edge as I've tested it recently. There just aren't the susutained trends available in today's markets.

Also: (I think) William Eckhardt said:

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You have to know when to really step on the gas

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In refering to money management. Opportunity factors may limit the number of high-probablility trades you can make, forcing you to take lower EV trades while waiting. When all your ducks are in a row, a good trader knows when to increase their bet-size and thus improve their edge and expectancy.

I developed a system with a very high profitability. It's losers were both smaller in number and value than winners - and I've never seen another system like it. The problem was, it would only be in the market about 0.5% of the time - ie. one quick trade per year per market, I would have had to scan 1000s markets every night looking for that trade. The opportunity factor wasn't there to make the system worthwhile. It would be these trades when a good trader would increase their position sizes. Since I am not a good trader, I was unable to trade this system.

I think many successful systems traders have these subtle discretionary elements in them. After all, if these human inputs were not needed, then the greatest math and computer brains would have developed a system happily chugging on autopilot vacuuming up the world's money while they slept.