Trading Falsehood 155

"You'll work out your own best methods
if you keep trying different things."

In systems trading, experiment and research are to be encouraged. But any newcomers to systems trading should be warned that it is essential to get a good grounding in the basic methods practiced by the professional traders before they think of trading their own money.

Never risk trading the markets on a learn-as-you-go basis. You will get very expensive lessons and you will exhaust all your trading capital a long time before you learn how the professional traders operate. These are the winning traders you want to copy.

And why would you take the risk of 'reinventing the wheel' when you can learn how to put yourself on the right track before you start?

With a sound knowledge of best practice, you will have ample opportunity to develop and experiment with your own ideas, if that is what you enjoy doing.

By this time, you will know how to test your own ideas and evaluate system rules and changes that interest you.

Traders normally limit their application of new ideas to system rules rather than the basic underlying methods employed but there is no barrier to any experiment provided it is carefully tested and controlled.

New trading software is now available which makes it much easier to re-program rules so that comprehensive simulated live testing can be done.

The best software offers alternative ways of setting up system rules, some of which involve no coding at all and others only require simple pseudo code.

Knowing when to and when not to 'work out your own best methods' will be an important factor in your success as a commodity trader.

 

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Copyright David Bromley 2006
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