My efforts in developing trading systems stemmed from a chance encounter with an entry on the Jonsson’s blog. I was fascinated by Van Tharp’s claims and began reading quite voraciously on the topic toward the end of 2003 and was soon trading mechanical systems.
I had no idea at the time, but I had basically signed up to be schooled, and class was in session for a couple years…
5 Replies to “Losing my marbles”
Interesting article. I would love to know what books you found the most helpful and what kind of system you have adopted.
My approach is a small variation on the Graham/Buffet theory. I use 5% positions and try to find small cap stocks that the inefficient market has priced below fair value.
This week I read about ETF funds such as QLD that double the market change on any given day. This amazing development has me thinking about the theme of the marble game. We’re all trying to beat the market, but good trading systems are so hard to implement that simple index funds beat 2/3rds of the mutual funds (professional full time traders) every year. Now I can beat the market long term by 2X just by buy and hold of QLD!
John, stick with me for a bit longer and I’ll start to cover those very questions (methodology, rules of thumb, good books, etc.).
I buy index funds and forgot about them. Life’s too short so spend time trying to outsmart the market. I’ll take market average and be happy.
The Four Pillars of Investing by Bernstein had a big impact on me.
Chris, I do believe the “buy index funds and forget about it” approach is to be preferred over most other alternatives, though it is not the methodology I use.
if you are going to actively trade please pick up a copy of taleb’s “fooled by randomness”. it is stoic, not christian, but has some important things to say regarding the probability theory involved with trading. judging from the QLD ETF comment, supra, it would be time well spent.