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Frequently
Ask Questions...& Hopefully Helpful Answers...but first a preface:
"I must say your recommendations are
really
profitable.Thanks." --Abdulla A. Aug 10, 2001
A great trading tool (Ultimate Stock Market Indicator) I will include in my investment arsenal. --McKoan
The bottom line:I hope the following discourse helps you get to know me as well as helping you in your trading. As subscriber Paul N. puts it, "...the value of your service is not in the rote copy of your recommendations but in the thought process and the basics of entry and exit." Begin learning good trading habits...starting today!
Stan Tamulevich, Commodity Trading Advisor
STUDY MATERIALS: GOOD REVIEWS / ECONOMY PRICING
Robert F Rotella, The Elements of Successful Trading.$34.95 from Traders Press, 800-927-8222
Victor Sperandeo, Trader Vic II--Principles of Professional Speculation.$37.50 John Wiley also same author, Methods of a Wall Street Master. $29.95 from Traders Press.
Alexander Elder, Trading For A Living $55.00, Financial trading Seminars, Box 20555, Columbus Cir Sta, New York, NY 10023 , 800-458-0939.
Bruce Babcock, The Four Cardinal Principles of Trading, $39.95 Irwin Professional Publishing 800-634-3966 or try Reality Based Trading and ask for the Marketline discount!
A SHORT SUMMARY OF MY APPROACHES:
FUND MANAGER. An extremely useful and accurate oscillator for all markets.
ULTIMATE STOCK MARKET INDICATOR with a past history of 80-90 percent accuracy, calls intermediate turns which can vary from a few days to three months in duration.
SNAPBACK is a trend change entry system that generally leaves open the exit parameter to suit the needs of the user (good for intermediate term trades)
TRADING POINT, while designed for short term, is trend dependent and offers users the option to seek and capitalize on intermediate trends in effect.
TURNING POINT Once you are in a trend trade, offers a great EXIT method!
THE TREND TRADING PAPER has excellent comments on trading philosophy.
UNIVERSAL 3 IN 1 TRADER. #3 is "the approach" for many (especial in Beans). I have used it for Marketline and held positions for as long as 5 weeks (not bad for a short term trader).
WHAT ABOUT SYSTEM TRACK RECORDS? Everyone is interested in track records. With 30+ tradable markets, and perhaps a total of 25 entry/exit techniques and tools, just the record keeping task is pure drudgery. I like approaches that are empirically sound in principle and in practice. I would rather let those who buy my approaches do the "tweaking",and/or "optimization". Yes, I work to improve my approaches which often leads to a distinct and separate approach. My tools are launching pads for learning.
That said, let's talk about my first "technique". I originally wrote Universal #1 in 1974. I called it Soybeans #1 because that is where I traded it the most and that has always been my favorite market. Yes, I have tested it and confirmed my comfort with it on numerous occasions. I have posted some of those results on these web pages, and even have a continuous 15 month record posted for trading the NYSE INDEX using my 1974 "Soybean" system. I have used it to enter a Marketline trade as recently as yesterday (as I write this on Dec 5,1997).
When people ask about records, it is my general feeling that they are asking the wrong question. MORE IMPORTANTLY: Does a technique have credibility? It the approach sound? Can I use it in my approach? What is the most valuable element of the technique that can contribute to my improvement as a trader?
My trading "techniques" are printed in papers that are simple to read and interpret (and program if you wish). They are priced reasonably and offer a lot of value for the money. When you buy an approach as these, you are buying good tools to tune your approach to successful trading. That is what I want all who use my methods to achieve. I WANT YOU TO BE A BETTER TRADER!
MY OPINION ON MARKETS: A disciplined technical approach REQUIRES that you have NO OPINION. You must be free to trade on one side of the market one day, and willing to be on the opposite side the next, if your approach warrants it. Without that freedom and flexibility, your style can be compromised much to your disadvantage. I quote Bruce Babcock, "virtually every mistake you make psychologically is caused by having an opinion on the markets." It is best to trade on the assumption that your opinion (not your trading plan) is worthless. Think about it. The only opinion that counts is your position in the market. What my subscribers get is entirely within the context of observation and not opinion.
ON MARKETS BEING DIFFERENT: Markets are different. Certain approaches do work better in some markets over others. (all you have to do is look at some of the studies published and back testing...the results are all over the map, not only for different markets, but for different time periods).
That said, I have used all of my techniques in many different markets. For example, the Universal 3-in-1 was called Soybeans #1 because I developed and tested it there. To this day, people regularly approach me and tell me how they have used the same principle and methodology to trade anything from stock indexes, to a day trading approach for the Bonds and Canadian Dollar. In one case, I was informed of a slight modification that one trader used to trade cotton exclusively. So should systems be used universally? Yes. Do they work better in some markets then others? Undoubtedly. What is the best approach? Whatever you can tailor to fit your needs.
My friend E. Waugh, wrote the Waugh-silator that I market. He intended it to be used for grains and meats, and it works quite well in those markets. Recently I was contacted by a mutual fund portfolio manager who told me that he tested it on the S&P 500 Cash Index, and was thoroughly impressed with the results.
I often get what I call "twisted testimonials" like that all the time. Most interestingly, if I sell a "system" to ten different people, they generally come up with more than 12 different ways to use it. Isn't that what markets are all about, and what makes markets in the first place?
Why do people buy systems? Most never trade them (I have over 50 in my files that I have never used). My work is designed to get people to investigate techniques and adapt what they like to their own style and comfort level. After all, most successful traders I know have done just that. They borrow from the best and fit it to their style. (I've done it, haven't you?)
Nothing is perfect. I have seen highly touted people come and go in this business, never to be heard from again. Guru today; history tomorrow!
Since much of my trading is on a very short term basis, what qualifies as a good idea today, may be relegated to the trash tomorrow. No problems. We live life one day at a time. I trade the same way (reformulate my plan one day at a time). I am certain that every trader has found themselves in a situation where they were bullish one day and not so bullish, or even bearish the next.
I encourage you to continue to do just what you are doing, i.e. working on your own approach. If you can get a good idea that you can adopt or modify, mine or someone else's, all the better.
DO I HAVE A FAVORITE APPROACH? If you would like to look at one approach of mine that may give you ideas, I would recommend the Universal Reversing Systems. I originated the first in 1974. Used it for several years, then put it on paper in 1985. The original technique is unchanged. One potential reviewer look at it and brushed it off as rather simplistic since you did not need a computer to generate signals. Personally I think that is an attribute!
SEASONALITY? CYCLES? INDICATORS? I certainly have an awareness of them as I trade and advise. I consider this as background information. They are not an integral part of my approach. My philosophy is to borrow from the best techniques and modify them for my own use. I encourage you to do the same thing.
Psychology, emotion, disciple, game plan, and opportunity are all incorporated into my style. I use my own techniques and modify them to suit the situation.
WHAT IS MARKETLINE?
Marketline provides a daily e-mail and fax advisory with online posted updates, trading philosophy, continuous trading ideas and a distinct approach to trading. Designed for the small trader, and valued by seasoned traders as well.
Marketline is not a "system". It is an empirical "seat of the pants" selection of ideas put forth in a daily trading discipline. It borrows and modifies from all the approaches I use...even variations thereof.
Marketline is oriented toward short term. Designed especially for new traders, those seeking a discipline, and for the idea seeker. Many of my systems give intermediate term entries as well. I often find traders use the ideas in their own approaches...and often to their advantage over Marketline (hats off to them!). One multi-year subscriber in the 1980's told me that he never took a prescribed trade per se, but found the idea input and suggestions invaluable, i.e. "I always wanted to know what you are thinking".
WHY MARKETLINE? The object of Marketline is to give you ideas and discipline as well as to stimulate your thinking. I find that many if not most subscribers are looking for tradable ideas. Traders don't always use the same entries or exits, but they find the ideas and discipline priceless. Some subscribers even tell me they do better than Marketline with Marketline trading ideas. That is great, because the object is to help you become a better trader. This is a sure indication of doing just that! Watch for the feature articles, systems, and trading ideas to advance your learning curve.
SUMMARY OF 1984 MARKETLINE REVIEW BY COMMODITY TRADERS CONSUMER REPORT: "...this guy knows how to trade".
WHAT ABOUT SLIPPAGE? There are styles of trading that require no adjustment for slippage at all, i.e. using limit orders to enter and exit markets. When stop entries are used in volatile or thin markets, $100 per trade may not be enough. In essence you have to know the approach, and the markets, to have a feel for what might be a reasonable slippage figure. One key when looking at a track record is when markets open "through" a stop entry or exit by a significant amount. This should be fully reflected in the track record, not as slippage, but as a corrected fill price. Slippage is really nothing more than the usually small but occasionally large adverse fills when dealing with stop order entries and exits that occur intra-day.
MARKETLINE TRACK RECORD. I do not publish a track record since I would rather have others monitor Marketline and report in an unbiased manner. You may request a copy of the trades for any period and calculate the returns yourself. In the past you could consult Commodity Traders Consumer Report, but with the passing of Bruce Babcock, that avenue is no longer available. I do however publish SAMPLE TRADES are posted on my internet pages, including the most recent 18 months or more. In fact, every daily advisory letter since Feb 2004 is posted there.
Look for my philosophy in old CTCR issues, in Bruce Babcock's book, The Four Cardinal Principles of Trading, and in my systems, daily emails and postings.
GOOD TRADING TO YOU!
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Marketline Daily Futures Advisory has been published since 1982. Feel free to ask for a free email trial and inquire about my published trading aids and systems.
*MARKETLINE AGREES WITH THE CFTC THAT: HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL RESULTS. PAST RESULTS NOT INDICATIVE OF FUTURE RESULTS. THERE IS SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
