7:34 PM
Sipemalu Andro Meda
An Inquiry into Trading Systems, Money Management and the Human Psyche
At a recent seminar, I got involved in an interesting discussion with other attendees centered on trading success. More specifically, the percentage of successful trades and the percent of accuracy you should realistically expect from trading.
For whatever reason, our minds tend to focus on accuracy as the primary way of evaluating a speculative endeavor. True to form, accuracy - our mental magnet of making money - has very little to do with finding success.
Reality - No Great Expectations
By and large, the record of the past teaches us that on balance, the investment newsletter writers (commodity, stock or mutual funds) don't do such a hot job. As a result, taking a quick peak at the advisors' percentage of accuracy in picking winning trades should prove to be at the very least - interesting.
In looking into this I primarily focused on: Of the small percentage of winning services, what was the accuracy percentage of these most profitable advisory services?
I arbitrarily selected the March 1993, January 1996, March 1997, May 1998 and June 1999. What follows are the figures for the most profitable advisors / service for that month and their percent of accuracy of all trades for the prior 12 months.
Mar 1993 Commodity Timing . . . $60,939 . . . 51%
Jan 1996 Moore Research . . . . $84,643 . . . 52%
Mar 1997 Turtle Talk. . . . . . $79,244 . . . 42%
May 1998 Commodity Timing . . . $90,430 . . . 47%
Jun 1999 Moore Research . . . . $102,605. . . 54%
A key point to remember is that these results are the "best of the best" for the above time periods. On average these services were right 49.2% of the time - our first indication that accuracy percentage doesn't necessarily have much to do with making money.
Consistent Winners
During the selected timeframe there were four advisors / services that substantially outperformed the others. In other words - they made money. Before we look at their figures, let me point out that none of the top four performers base their approach on the "magical and mystical" stuff like Gann, Elliot, Astrology and the like. In fact, advisor letters touting those methods have the worst performance. The winning letters are, by and large, trend followers to one degree or another. With that in mind, here are the ones that I feel had the best performance. The market letters that had the most consistent and profitable performance and their percentage of winning trades. The dollar figures represent the money they made from their recommendations for the prior 12 months from each of the reporting dates listed above.
Top 4 Newsletters . . . . . . . . 5 Year Total Profits . . . % of Winners
Commodity Research Bureau . . . . . $158,840 . . . . . . . . 48%
Commodity Timing. . . . . . . . . . $224,239 . . . . . . . . 47%
Commodity Trend Service . . . . . . $214,858 . . . . . . . . 32%
Moore Research. . . . . . . . . . . $242,253 . . . . . . . . 51%
Clearly, the winners are not particularly accurate - just very profitable!
Now the question begs - What allows them to make money with what would appear on the surface as mediocre accuracy? The answer lies in one of the oldest adages on the street… let your profits run and cut your losses short. In terms of math, this simply means that their average profit per trade is substantially greater than their average loss.
The message should be clear and is one based on how real people did in real time and in real world trading - accuracy really doesn't matter all that much. On a side note, the next time someone tells you that all newsletters are a bunch of hot air you may want to show them the figures above.
Of course, the counterpart is that you must not take quick little profits. To succeed in this business you've got to hold on for large winning trades because as you can see by these real world examples - accuracy doesn't make you money.
This article may be reproduced only in its entirety.
At a recent seminar, I got involved in an interesting discussion with other attendees centered on trading success. More specifically, the percentage of successful trades and the percent of accuracy you should realistically expect from trading.
For whatever reason, our minds tend to focus on accuracy as the primary way of evaluating a speculative endeavor. True to form, accuracy - our mental magnet of making money - has very little to do with finding success.
Reality - No Great Expectations
By and large, the record of the past teaches us that on balance, the investment newsletter writers (commodity, stock or mutual funds) don't do such a hot job. As a result, taking a quick peak at the advisors' percentage of accuracy in picking winning trades should prove to be at the very least - interesting.
In looking into this I primarily focused on: Of the small percentage of winning services, what was the accuracy percentage of these most profitable advisory services?
I arbitrarily selected the March 1993, January 1996, March 1997, May 1998 and June 1999. What follows are the figures for the most profitable advisors / service for that month and their percent of accuracy of all trades for the prior 12 months.
Mar 1993 Commodity Timing . . . $60,939 . . . 51%
Jan 1996 Moore Research . . . . $84,643 . . . 52%
Mar 1997 Turtle Talk. . . . . . $79,244 . . . 42%
May 1998 Commodity Timing . . . $90,430 . . . 47%
Jun 1999 Moore Research . . . . $102,605. . . 54%
A key point to remember is that these results are the "best of the best" for the above time periods. On average these services were right 49.2% of the time - our first indication that accuracy percentage doesn't necessarily have much to do with making money.
Consistent Winners
During the selected timeframe there were four advisors / services that substantially outperformed the others. In other words - they made money. Before we look at their figures, let me point out that none of the top four performers base their approach on the "magical and mystical" stuff like Gann, Elliot, Astrology and the like. In fact, advisor letters touting those methods have the worst performance. The winning letters are, by and large, trend followers to one degree or another. With that in mind, here are the ones that I feel had the best performance. The market letters that had the most consistent and profitable performance and their percentage of winning trades. The dollar figures represent the money they made from their recommendations for the prior 12 months from each of the reporting dates listed above.
Top 4 Newsletters . . . . . . . . 5 Year Total Profits . . . % of Winners
Commodity Research Bureau . . . . . $158,840 . . . . . . . . 48%
Commodity Timing. . . . . . . . . . $224,239 . . . . . . . . 47%
Commodity Trend Service . . . . . . $214,858 . . . . . . . . 32%
Moore Research. . . . . . . . . . . $242,253 . . . . . . . . 51%
Clearly, the winners are not particularly accurate - just very profitable!
Now the question begs - What allows them to make money with what would appear on the surface as mediocre accuracy? The answer lies in one of the oldest adages on the street… let your profits run and cut your losses short. In terms of math, this simply means that their average profit per trade is substantially greater than their average loss.
The message should be clear and is one based on how real people did in real time and in real world trading - accuracy really doesn't matter all that much. On a side note, the next time someone tells you that all newsletters are a bunch of hot air you may want to show them the figures above.
Of course, the counterpart is that you must not take quick little profits. To succeed in this business you've got to hold on for large winning trades because as you can see by these real world examples - accuracy doesn't make you money.
This article may be reproduced only in its entirety.
By - www.readbud.com
Presentation Skills - The First To Know
To fully understand the rules that govern just how much information you can include in your presentation slides, you need to appreciate a fundamental of human nature – namely, that we have an innate desire to be The First to Know.
Unfortunately, most of the presentation visuals that we see are designed with the mistaken belief that audiences will actually wait for the presenter to walk them through them. Wrong.
When the technology of communications was slower, we took a more historical approach to news - news was about what happened. We were accustomed to waiting for the news, and news had a time: Did you see the morning paper? Did you hear the evening news?
But with electronic advancements, we came to think of news more in terms of what is happening at the moment. Film brought us motion, but video feeds brought us there. Screens eclipsed paper as the preferred venue for getting the latest. Newspapers folded, first afternoon editions and then even icons of Americana - think Herald Tribune. Instead of being the first source of news in the world, to survive newspapers became more feature oriented – providing value only for less perishable and less immediate content.
Cable News Network took a huge gamble that people all over the world would watch news twenty-four hours a day - news on the people's timetable, not the providers. News on demand. Fulfillment for those with the desire to be "the first to know."
What does all this have to do with presentation design? You don't need to be a news junkie to share a basic trait of humans and other intelligent animals – curiosity. Curiosity is basic to survival, and we have evolved as creatures who need to learn what we can quickly. So this same desire that humans have to be the first to know translates to every event that involves new information uptake. During a presentation, audience members want the same control, and are basically unwilling to wait for you, the presenter, to help them be the first to know.
Once the curiosity about a slide has been satisfied, audience members usually will give the presenter their attention.
But when a new slide first appears on the screen, all eyes, like moths to the flame, tune to the new image, and immediately begin the race to be the first to know what the slide is all about. It's not their fault! They're human! Only when every member of the audience is thoroughly convinced that they know exactly what the slide means will they lend their attention back to what you are saying.
And until this point you realistically might as well not be there. Oh, sure, you can act as most do and begin to describe the elements in the slide, but for all intents and purposes, it matters little what you do. You could drop your pants. You could leave the room. You could tell off-color jokes. But until the audience has determined for themselves exactly what all the data and word tracks on the screen mean to them, you have approximately 0% of their attention.
With most of the slides we see in business presentations today, this is where the disaster begins. You see, the typical slide contains so much information that a typical audience member would need more than 30 seconds just to read the material, much less absorb it. The reading process is delayed, though, because first the viewer tries to decide for herself where to begin, and which piece of information is most important. Clues to the relative value of the information are often erroneous, however, as audiences base them on such things as the size of the type or placement on the screen.
For this reason, you must ask yourself how long it will take the average person to discover for themselves all the information you have in your slide. The more time it takes the average person to absorb and assimilate the information they see, the greater the chance you have to lose your audience.
So what does this tell us? Of course, there is only one truly viable solution, and that is to limit, by all means possible, the amount of information that is released with each click of your mouse.
The less time it takes the audience to discern the new information, the sooner they'll get back to you and start to listen to what you really mean to "say" on the slide.
Unfortunately, most of the presentation visuals that we see are designed with the mistaken belief that audiences will actually wait for the presenter to walk them through them. Wrong.
When the technology of communications was slower, we took a more historical approach to news - news was about what happened. We were accustomed to waiting for the news, and news had a time: Did you see the morning paper? Did you hear the evening news?
But with electronic advancements, we came to think of news more in terms of what is happening at the moment. Film brought us motion, but video feeds brought us there. Screens eclipsed paper as the preferred venue for getting the latest. Newspapers folded, first afternoon editions and then even icons of Americana - think Herald Tribune. Instead of being the first source of news in the world, to survive newspapers became more feature oriented – providing value only for less perishable and less immediate content.
Cable News Network took a huge gamble that people all over the world would watch news twenty-four hours a day - news on the people's timetable, not the providers. News on demand. Fulfillment for those with the desire to be "the first to know."
What does all this have to do with presentation design? You don't need to be a news junkie to share a basic trait of humans and other intelligent animals – curiosity. Curiosity is basic to survival, and we have evolved as creatures who need to learn what we can quickly. So this same desire that humans have to be the first to know translates to every event that involves new information uptake. During a presentation, audience members want the same control, and are basically unwilling to wait for you, the presenter, to help them be the first to know.
Once the curiosity about a slide has been satisfied, audience members usually will give the presenter their attention.
But when a new slide first appears on the screen, all eyes, like moths to the flame, tune to the new image, and immediately begin the race to be the first to know what the slide is all about. It's not their fault! They're human! Only when every member of the audience is thoroughly convinced that they know exactly what the slide means will they lend their attention back to what you are saying.
And until this point you realistically might as well not be there. Oh, sure, you can act as most do and begin to describe the elements in the slide, but for all intents and purposes, it matters little what you do. You could drop your pants. You could leave the room. You could tell off-color jokes. But until the audience has determined for themselves exactly what all the data and word tracks on the screen mean to them, you have approximately 0% of their attention.
With most of the slides we see in business presentations today, this is where the disaster begins. You see, the typical slide contains so much information that a typical audience member would need more than 30 seconds just to read the material, much less absorb it. The reading process is delayed, though, because first the viewer tries to decide for herself where to begin, and which piece of information is most important. Clues to the relative value of the information are often erroneous, however, as audiences base them on such things as the size of the type or placement on the screen.
For this reason, you must ask yourself how long it will take the average person to discover for themselves all the information you have in your slide. The more time it takes the average person to absorb and assimilate the information they see, the greater the chance you have to lose your audience.
So what does this tell us? Of course, there is only one truly viable solution, and that is to limit, by all means possible, the amount of information that is released with each click of your mouse.
The less time it takes the audience to discern the new information, the sooner they'll get back to you and start to listen to what you really mean to "say" on the slide.
By - www.readbud.com
The Purpose Of Shame
Many people on a healing path have found it extremely challenging to heal their shame. Yet when you understand the purpose of shame, you will be able to move beyond it.
Shame is the feeling that there is something basically wrong with you. Whereas the feeling of guilt is about DOING something wrong, shame is about BEING wrong at the core. The feeling of shame comes from the belief that, "I am basically flawed, inadequate, wrong, bad, unimportant, undeserving, or not good enough."
At some early point in our lives, most of us absorbed this false belief that causes the feeling of shame. As a result of not feeling seen, loved, valued, and understood, we developed the belief that we were not being loved because there was something wrong with us. While some children were told outright that they were not okay – that they were stupid, bad, or undeserving – other children concluded that there was something wrong with them by the way they were being treated.
Once we establish our core shame belief, we become addicted to it because it serves us in two primary ways:
1) It gives us a feeling of control over other people's feelings and behavior.
As long as we believe that we are the cause of others' rejecting behavior, then we can believe that there is something we can do about it. It gives us a sense of power to believe that others are rejecting us or behaving in unloving ways because of our inadequacy. If is our fault, then maybe we can do something about it by changing ourselves, by doing things "right." We hang on to the belief that our inadequacy is causing others' behavior because we don't want to accept others' free will to feel and behave however they want. We don't want to accept our helplessness over others' feelings and behavior.
2) It protects us from other feelings that we are afraid to feel, and gives us a sense of control over our own feelings.
As bad as shame feels, many people prefer it to the feelings that shame may be covering up – loneliness, grief, sadness, sorrow, or helplessness over others. Just as anger may be a cover-up for these difficult feelings, so is shame. Shame is totally different than loneliness or grief or helplessness over others: While shame is a feeling that we are causing by our own false beliefs, loneliness, grief, sadness, sorrow, or helplessness over others are existential feelings - feelings that are a natural result of life. We feel grief over losing someone we love, or loneliness when we want to connect with someone or play with someone and there is no one around or no one open to connection, love or play. Many people would rather feel an awful feeling that they are causing, rather than feel the authentic painful feelings of lifeIf you are finding it difficult to move beyond shame, it is because you are addicted to the feeling of control that your shame-based beliefs give you – control over others' feelings and behavior and control over your own authentic feelings. As long as having the control is most important to you, you will not let go of your false core shame beliefs.
You will heal from your shame when:
1) You are willing to accept that others' feelings and behavior have nothing to do with you. When you accept that others have free will to be open or closed, loving or unloving - that you are not the cause of their feelings and behavior and you no longer take others' behavior personally - you will have no need to control it. When you let go of your need to control others and instead move into compassion for others, you will let go of your false beliefs about yourself that cause the feeling of shame.
2) You are willing to feel your authentic feelings rather than cover them up with anger or shame. When you learn to nurture yourself by being present with caring and compassion for your own existential feelings, you will no longer have a need to protect against these feelings with blame or shame.
Control and shame are intricately tied together. When you give up your attachment to control and instead choose compassion toward yourself and others, you will find your shame disappearing.
Shame is the feeling that there is something basically wrong with you. Whereas the feeling of guilt is about DOING something wrong, shame is about BEING wrong at the core. The feeling of shame comes from the belief that, "I am basically flawed, inadequate, wrong, bad, unimportant, undeserving, or not good enough."
At some early point in our lives, most of us absorbed this false belief that causes the feeling of shame. As a result of not feeling seen, loved, valued, and understood, we developed the belief that we were not being loved because there was something wrong with us. While some children were told outright that they were not okay – that they were stupid, bad, or undeserving – other children concluded that there was something wrong with them by the way they were being treated.
Once we establish our core shame belief, we become addicted to it because it serves us in two primary ways:
1) It gives us a feeling of control over other people's feelings and behavior.
As long as we believe that we are the cause of others' rejecting behavior, then we can believe that there is something we can do about it. It gives us a sense of power to believe that others are rejecting us or behaving in unloving ways because of our inadequacy. If is our fault, then maybe we can do something about it by changing ourselves, by doing things "right." We hang on to the belief that our inadequacy is causing others' behavior because we don't want to accept others' free will to feel and behave however they want. We don't want to accept our helplessness over others' feelings and behavior.
2) It protects us from other feelings that we are afraid to feel, and gives us a sense of control over our own feelings.
As bad as shame feels, many people prefer it to the feelings that shame may be covering up – loneliness, grief, sadness, sorrow, or helplessness over others. Just as anger may be a cover-up for these difficult feelings, so is shame. Shame is totally different than loneliness or grief or helplessness over others: While shame is a feeling that we are causing by our own false beliefs, loneliness, grief, sadness, sorrow, or helplessness over others are existential feelings - feelings that are a natural result of life. We feel grief over losing someone we love, or loneliness when we want to connect with someone or play with someone and there is no one around or no one open to connection, love or play. Many people would rather feel an awful feeling that they are causing, rather than feel the authentic painful feelings of lifeIf you are finding it difficult to move beyond shame, it is because you are addicted to the feeling of control that your shame-based beliefs give you – control over others' feelings and behavior and control over your own authentic feelings. As long as having the control is most important to you, you will not let go of your false core shame beliefs.
You will heal from your shame when:
1) You are willing to accept that others' feelings and behavior have nothing to do with you. When you accept that others have free will to be open or closed, loving or unloving - that you are not the cause of their feelings and behavior and you no longer take others' behavior personally - you will have no need to control it. When you let go of your need to control others and instead move into compassion for others, you will let go of your false beliefs about yourself that cause the feeling of shame.
2) You are willing to feel your authentic feelings rather than cover them up with anger or shame. When you learn to nurture yourself by being present with caring and compassion for your own existential feelings, you will no longer have a need to protect against these feelings with blame or shame.
Control and shame are intricately tied together. When you give up your attachment to control and instead choose compassion toward yourself and others, you will find your shame disappearing.
By - www.readbud.com
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