Hi Don, I just read your bio and was very interested in your evolution as a trader. Sounds like we've both come to a fairly similar conclusion re. the most best/safest way to make a consistent profit.

I notice from your system metrics that your avg. profit/loss is about 2 point something to 1. Does this mean you're using daily data or a fairly tight stop? Everyone's risk tolerance and goals are different of course, but I'm wondering whether you've ever done backtesting on weekly data, especially with a volatility stop? Personally I've found several kinds of stops that work well. But weekly systems always outperform daily systems by a wide margin - both for profits and drawdowns. I'd be very interested in whether you've experienced the same thing. Cheers.

Hi GraySwan, I've just reread everything you've written here so far, and before I forget, want to note that we're more on the same page than you might have imagined. I've been a fan of the Austrian school of economics for 30+ years now. And regarding trading philosophy, I think Taleb, Covel, and Tharp are must reads. As for Weinstein, he hits on all the key points that make for good trading, and I know at least one trader personally who made a great deal with little more than Weinstein during the 90's and subsequent bear market.



About my stop, it's based on daily data, which incorporates a measure of the ATR (average true range, for anyone else reading this). I've also done extensive testing of my program on weekly data, and as it now is configured, I use a weekly version of the same program as a filter to minimize whipsaw trades. That addition made for a considerable improvement, as you suggest, as it has improved the bottom line, with fluctuations that have been easier to live with.



From there, I maintain about 50 columns of calculations that focus on range, volume, and risk to the account, which generates a trailing stop daily. As a percent of the stock price, my initial stop may be as much as 50% below purchase price (e.g. bought a stock at $3.00, and initial stop is at 1.50, but more commonly, it's much closer. But that's an incidental measure. What I measure is risk to the account, which ranges from 1/2 of one percent, all the way up to 2%. Actually, my combined calls on gold have a total risk of 5% right now.



I'm not sure you need it, but If you'd like, I'll send you my Position Sizing formula in a spreadsheet. I'm at donbartell@comcast.net. Good luck with these markets, and thanks for your comments and insights and humor here! Don