This is why I prefer (and only trade) mechanical systems. Your mileage may vary, of course. 
Hi Chris,
"Don’t you feel that a certain amount of luck is inherent in all forms of trading the stock market?"
A certain amount, yes I sure do. But among other things, the historical trend of the stock market is up, so that has some reliablility, and diversification and money/risk management can reduce “company risk” to almost zero. So IMO luck can be invited, so to speak, much like counting cards in Vegas.
Bill,
I really like your "counting cards" analogy.
Cheers
Bill, I like your points.
By the way, you don’t mean Luck (as in ‘Good Fortune’) do you? It’s obvious to say that Luck has never been proven (convincingly) to exist and it is widely accepted (by rational thinkers at least) as a fallacy. I guess you mean ‘chance’ (although even chance is a debatable concept if you believe in an ultimately deterministic universe - but, I digress). I suspect people who count cards in Vegas are not actually inviting luck, but rather improving their likelihood of taking the right chances when they come.
Anyway, this has a point. It’s often said that in Poker it’s the same people who reach the world series final every year. Only the amateur relies on luck. The seasoned player takes his chances when they come. As most people know, poker is first and foremost a percentage game; you minimise your losses with poor cards, and maximise them with good cards (commonly achieved by playing ‘tight’, except perhaps in a head’s-up bluff or where needed to control your table image).
Maybe there are some analogies with trading. e.g. In the sayings, ‘cut your losses’, and ‘let your profits run’. Perhaps traders could be judged on their abilities to maximise their chances when they come, and visa versa on their judgement not to trade at all when the conditions are wrong. In Poker it’s straightforward to categorise people as tight/loose and passive/aggressive. Perhaps we could do this on C2! (only joking).
Charles
I agree with a lot of what you’re saying, Charles.
"I guess you mean ‘chance’"
If that’s a more accurate term, great.
"I suspect people who count cards in Vegas are not actually inviting luck, but rather improving their likelihood of taking the right chances when they come."
Right. What is that saying about preparation meeting opportunity? My understanding is that counting cards is not technically illegal at any US casino, but folks have gotten physically hurt by continuing to do it. Not so in the stock market.
We also know from the legal system and the insurance industry that the difference between risk and gambling is that in gambling, the odds can be calculated in advance. Still, we can apply some of the ideas learned in the insurance industry to our economic futures.
the odds can be calculated in advance
That’s a major difference between the casino (incl. the effect of card counting) and the stock market.
One of the points in this thread was that if the profit depends on a few big winners, the subscriber must be
patient, and missing one trade can have a great effect on his outcome. Why is it needed to understand the
underlying events for that? To draw this conclusion it is enough to know that the winners are rare.
Actually I mean under underlying events a system signals, because it’s an events for subscribers.
If you understand which type of a system you trade it gives you more than “be patient” 
I.e. "trend following"
1. Logically for the system is to have average winner bigger than average looser. First stats that you can have it’s ratio between winners that are less/equal of average loss (WL) and winners that are more than average loss(WM). It will clearly show to you from which kind of trades the system depends.
WR(Wins ratio)=SUM(WM)/SUM(WL) if WR is more than 1 you recognized the system type correctly. Otherwise it’s second type of systems and your patience won’t help you You have to wait until additional stats or review the system as scalping system.
2. First rile of trend following system “cut losses”. Reviewing of negative outliers. For the kind of system for stocks/options - only overnight gap up/down outliers are acceptable, for futures - overweekend (as I remember the futures market closed only at weekend), for forex - there should not be any outliers. If you see something different - well you have to think twice.
3. Second rule “follow a trend”. Take any 10 average winners. Put it on chart. Make a trendline. Estimate what kind of percentage of move was taken by the system. Bigger average taken percentage of move shows better trend following rules of the system.
4. Averaging. Logically there might be only adding to already winning position, because the system is in trend. If the system averaging losing position you have to think twice
Huh, does it make sense for anybody? You see how a lot of about system and system vendors action you can say just by knowledge of type of the system. I didn’t even touch the stats itself
You have to recognize type of the system and adjust stats for the type.
Then, what kind of adjustment do you suggest?
One is for any system. A system should stay profitable even if all profitable outliers will be removed. Also the kind of stats will represent a system without “luck”.
Second adjustment might be made for the “trend following” system. If we remove WL and the system still be profitable you’ll have stats that is based on skills of the system vendor.
Eu
P.S. Of course everything that I said above is only my opinion.
"the odds can be calculated in advance
That’s a major difference between the casino (incl. the effect of card counting) and the stock market."
Yes, Science Trader. I thought I had mentioned that?
you’re right : )
Interesting site. And I was directed to your ytd achievements. Quite nice! You handled the Feb draft well. Your market direction prowess pays off with knowing when to short or go long, as the market typically is going up - if not correcting for a while. The market doesn’t usually base much (at least for 5-10 yrs), but of course you wouldn’t lose much unless holding options that decay.
Putting most all your account into each trade is helped with a diversified instrument like (I think you are using an e-mini?). Of course if you stop-losses at 15k-25k and make money most all other trades…they may show up as risky (DD) but is fairly contained for 200-300% rampup every 6 months!
Anyway…from one ‘scientist’ (optical engineer) and money manager to another…I look forward to your system NOT imploding and will soon get mine up. In the meantime…just shoot me a trade and I’ll wire you $1,250 (just jokin’) cya
Interesting site.
Pls, use search for ".com" on the site. There are bunch of selling guys who cannot make anything at C2, even C2 is just simulation. Just use the site search. So… Are you next guru from the kind of ".com"? Good for you. Try it to make a bank lol
Eu
Hi Gilbert,
I’ve read your post a couple of times, but honestly have no idea what you’re talking about. Are you addressing me, or someone else? Are you referring to two systems I started in the past on C2 and terminated? Are you referring to my blog where I discuss my life as a subscriber to C2 systems?
ST
Thx Eu, did cursory (quick) search and tells (me) a lot. 1. C2 systems go back ~4 yrs. 2. Mutual Fund Trader, Extreme os, CT Snapback, Hawke (plus maybe 1-3 others) are doing things since (for the longer-term systems).
It’ll be quite interesting to see how the rest stack up by year-end 2007 ; ). I don’t need to tell you Tango is quite impressive - who’d a thunk: Bottom-Fishing?!!?
Keep in mind I am new at C2 and will eventually know u and others’ offerings more (in time). Of course I am pulling 4 ALL at C2!!
Hello ST
I’m no ‘rocket scientist’, BUT to clarify…I may not know!! I just quickly checked out your system and commented on what I thought was up with it. Perhaps I need to spend more time to actually ascertain exactly what u do.
Gilbert
sound like a good idea
I don’t understand it either. Which system do you mean?
OK you got me! Here is the SNAFU. I checked my history and found I was looking at ‘Rocket Science-Mini S&P’ by Rocket Science Corporation.
Oops! Hope that clears things up.
I bookmarked your blog and will hopefully now be referring to the REAL ‘Science Trader’!
Ah I see. Indeed I’m not related to that system but I agree the similarity in names can be confusing.
Can new threads be started? I was going to begin a discussion on ‘Subscriber Review’s’ that seem dauntingly scarce. I will like to get my upcoming-subs to put some verbiage up (in the form of a ‘subscriber review’) so that the public can get more of a feel for what is being offered. Gil
If you have a system, you can create a forum for it. It can be public or for subscribers only.
