just to clarify: I didn’t mean to suggest that extreme-os is too good to be true. I think it is a well-designed system, not in the least b/c it has good reward/risk, is very consistent and virtually uncorrelated with any index. However, you need a fair amount of capital (as is the case with many other systems) to offset the monthly cost by a sufficient margin.
"In fact, I would suggest to learn autotrading with extreme-os. I don’t mean this as a trade recommendation, but as an easy system to get the hang of autotrading. (Probably some other system can do that too, I just happen to know this one). It has a few trades per day at a few days per week, so you won’t have to wait weeks and you don’t have to attend it every minute either. And even if you do something wrong and buy 100 shares instead of 1, well, there is still a fair chance that you can exit without a great loss."
Clarify me if I am wrong, but wasn’t he just saying get the hang of autotrading by using extreme-os? Not necessarily putting $50,000 into it, Hes just saying to trade 1 share…
I am getting a bit confused at this point…
I think I understand his point, but it seems rather expensive to me to become familiar with autotrading for $190 a month. This goes straight against Buffet’s rule #1 (and #2 as well).
"Ross, I think you may have the wrong impression…I will do whatever is necessary to make sure I preserve my capital."
Mark, understand that the problem is, most new traders think they get it, but it often takes a good trader several years to get it, after losing significant amounts of $ for unexpected reasons.
Strongly advise you stay away from leverage for awhile. Get used to trading stocks. You have much more to learn than you realize. This is a lifetime thing. But the saying that 90% of new traders lose their money in leveraged markets (forex, futures, options) is usually due to reasons they did not see.
"But the saying that 90% of new traders lose their money in leveraged markets (forex, futures, options) is usually due to reasons they did not see."
Ross, I agree.
Using the Grid "All", sorting for APD will show that there are no systems with (APD > 1.0) and (Avg. Trades < 1 day) !
The reason is that the scalping machines are working with an
(avg. risk) > (avg. profit) !
But why are there stock-systems with APD < 0.5 that are performing well since more than 2 years ?
There is also a reason for this : The bull market !!!
They stay sitting on their losing positions until the rising stock market helps them to recover again.
But guess what happens in a bear market with these systems !!!
Mark for a new trader I would suggest a very important stastic to look at is realisum factor. Most signals with a 100% realisum factor are end of day traders. That would be a system that usually calculates their signal after the market closes and trades on the open the next day. There are very easy systems to duplicate. Good Luck
Mark, you are right, I meant it just to get the hang of autotrading.
Indeed, Science Trader and I usually agree, so now I am hesitating too… I can see Science Trader’s point that $100 fee is expensive. Perhaps I said that too easily. If you know a similar cheaper system, I would recommend that. Personally I would not really care about $100 if it is a one time experiment, but then I’m not Warren Buffet 
One reason that I suggested extreme-os is the trading frequency and the limited number of positions. This makes it relatively easy to autotrade with a substantial number of trades to learn from.
I also thougt about Weekend Trader, but then you get signals only once every week (if I understand the idea) so there will be less learning potential. I presume that system has more positions at the same time, so it will be somewhat more difficult to follow, but on the other hand you can learn from that too.
So perhaps there are better options than extreme-os, but I would not look only to the fee. Even with 1 share per trade it is best to choose a system that isn’t too wild. For example, if you had started to trade RT Hedge a few weeks ago with 1 share per trade, you would still have lost about $50 in a few days in addition to the commissions and fees (because you will get 1 share per signal). Note that it had a very nice equity curve and statistics before that happened. So it is also important to begin with an old, proven system.
Correct, Harald
mid-May 2006, and late-Feb 2007 exposed many of these ystems for what they are.
Many systems just leverage a rising market and new traders think "Bravo!!!" and follow like rats after the Pied Piper.
A seasoned trader says "show me the money" and scrutinizes the stats and follows the system over time, to get a better idea.
You want a potentially good system? Watch for someone who makes money with his short positions in a rising market (over a good length of time)…
"I am getting a bit confused at this point… "
Mark
That is the first wise thing you said. Let me show you what REALLY happens to a trader named NEWBIE:
1) NEWBIE thinks "I would just like to find a system that makes me 30% a year"
2) NEWBIE opens a broker account, and subscribes to a system. NEWBIE makes a little money, and gets more excited
3) After 3 weeks of trading, NEWBIE’s account is down 10%. NEWBIE tries another system.
4) NEWBIE goes sideways for a couple of weeks. NEWBIE makes some money.
5) Smelling success, NEWBIE cranks up the volume. If I can make money at 2X leverage, imagine what I can do on $500 day-trading margins for the eminis.
6) A sudden adverse trade takes away 70% of NEWBIE’s account in 2 hours. NEWBIE happened to be at work, and figured autotrading would do the trick while he is gone.
7) Now, NEWBIE appeals to others, what am I doing wrong?
8) After gathering some more counsel, NEWBIE is more careful this time. NEWBIE is on 3rd or 4th system.
9) After a few more weeks, nobody on C2 hears from NEWBIE any more. NEWBIE has lost the rest of his $40K account…
Understand? I would rather be blunt and have you be careful, than to think a couple of months of practice or trading will make you “experienced” or “seasoned.” It will most likely make you overconfident.
I think his confusion was about Science Trader’s interpretation of what I said.
Anyhow, no one will get hurt with papertrading, so I cannot say that I am against your suggestion. I have the feeling that you undersestimate Mark though. He said that he lost already a lot money (didn’t he?) so he should have some awareness of the risks by now. The scenario that you sketch is realistic, however, and I agree that it is wise not to jump to full scale after some success experiences. I would suggest to build up a small cushion of profits first, then scale a little higher, build up a larger cushion, scale a little higher, etc.
But guess what happens in a bear market with these systems !!! - Harald Kempf
Vendors tell subscribers to do the opposite of what the signal says?
In any case. I understand what Ross is saying, and a lot of what I have read on this forum has been enlightening. Let me say a couple of things before you start ranting again =).
#1. I like Money (keeping it too)
#2. I consider my self conservative and safe…careful.
#3. I usually make safe decisions, like when to say no, when to walk away, when to not open my mouth…you know.
I have been fairly successful up until now in my life, I understand daytrading, and being a “seasoned” trader means gaining some experience with the markets, ok I understand that, now how do I get it.
So I have a question for you Ross (Don’t worry everyone else I have questions for you too! :p) How does one go about getting started in these shark infested waters? While others have said jump in, they don’t bite, you have said stay clear. I would love to hear what your answer is to someone starting fresh.
Risk comes from not knowing what you’re doing. A great man said that…
Just to clarify a couple of things people have said:
1. I have never lost any money in any market.
2. I have traded before. Pushing buy and sell in some brokerage account
And finally, I actually have swam in shark infested waters. Tahiti, 06, Honeymoon. Great fun.
"Let me say a couple of things before you start ranting again =)."
??? Was I ranting?
no you were not. You were helping.
- as a new trader, consider yourself like a 16 year old with a brand new driver’s license. They are excited, but If I remember correctly, they have an accident rate about 4x higher than the population at large (they lack experience). New traders crack up at an alarming rate. Often because they have no clue about the many things that can sink a trader.
Think of this as a longterm enterprise. If you are in a hurry, you may get some lessons the hard & expensive way. Why learn lessons at the cost of thousands, when you could have learned some by asking a few questions?
I went through about 5 reinventions of my trading methods before I learned about patience and rigorous testing of systems without using real money (or, only risking a LITTLE money)
2) Study about trading. Get at least a few books, and learn the field. Most system vendors (outside C2) are liars, deluded, or play with the truth. At least in C2, you get to see independent testing of the systems.
3) Ask lots of questions from the experienced traders here. Lew, Jules, Sam, Randy M, and some other people here can provide a ton of good advice and/or maybe point you to good links.
4) Go back in history on these forums, and skim/read through interesting looking topics. Try to learn and try to see what other traders went through
4) Unleveraged trading is relatively safe. The faster you dabble into leveraged trading (options, forex, futures), odds say the faster and more likely you are to lose money.
2) IF you have 100 active systems, by definition, 10 are in the top 10% (probability). I would say that maybe one or two of those 10 has longterm potential. Find the systems that you are interested and watch them for 4 weeks. If they REALLY work, they will continue to do so. What you are likely to find, is that many promising systems that work this month, will be forgotten in 2 more months.
And as I said before, I put a bunch of things for new traders in my forum (look down for Futures-Systems). Since the system has never sought subscribers, it is relatively objective
What books would you recommend Ross?
Mark,
one more bit of advice. My experience is that the execution of a trading strategy, regardless whether its manual or autotrading, is something you can pick up rather easily, compared to learning how to choose a system or portfolio of systems that will make you consistent profits with low risk. I would suggest to spend most of your time in that area.
> And finally, I actually have swam in shark infested waters. Tahiti, 06, Honeymoon. Great fun.
Cool.
Actually your chances of dying in a shark attack are about 300,000,000 to 1. Your chances of losing money in your first year of trading are about 9 out of 10. The old shark metaphor really doesn’t hold much water 
Trading is more like swimming with piranhas: the markets tend to nibble you to death.
Anyway, get started with a “small” system that doesn’t correlate too much with the S&P. Has low DD’s, and high APD, RF, and PF stats. Then trade it really really small.
Or, go buy $1000 worth of trading books and spend a year (or 10) reading and paper trading and looking at charts and programming in TradeStation or something similar.
FWIW, one of the best traders of all time (Marty Schwartz) lost money for ten years before making 800% per year in public real money trading competitions over the next ten year period. Be patient.
Here are some books as reviewed by real traders. You can read the descriptions and reviews, to see what it is you want to learn.
http://elitetrader.com/bo/
Truthfully, there are zillions of books. Each trader would probably have a different set. And it also depends on whether you plan to ultimately do futures, stocks, options, forex…
