NONJUDGMENTAL APPROACHES Wouldnt It Be Nice . ..

• Once you have the development in place, your research and your work are over. Your trading system is fixed, stationary, and immutable. Stress is nonexistent since the decision-making process is out of your hands and in the purview of a machine. Thorough and precise (hypothetical) testing techniques have left little to chance. Everything has been taken into consideration, so your confidence is strong.

• You can arrange for signals to be implemented by a hired trader or broker and thereby avoid the tedium of monitoring the markets yourself.

• "It" (the "system," the "program," the "solution") can generate an adequate income flow, which will enable you to go to Fiji and stick your toes in the sand.

The Reality ...

• The work never ends. When system historical extremes are exceeded, you are back to tweaking, testing, and massaging the parameters.

In fact, you better have two independent systems, or maybe three, or four, to even out the equity swings. Oh yes, there will not only be some tweaking and massaging, it is more likely that outright replacement of a system or two will occur, as one or the other goes sour altogether.

What about stress? You dont know stress until you experience pervasive impotence. You feel utterly helpless to affect results as you watch your system(s) dictate one absurd order after another. You just know that profit is going to evaporate and go to a loss. When that happens, you cannot do anything but watch and obey the signals it generates. Hey Mack, pass the Maalox®, now! You learn that the $100 for slippage and commission you thought would be extravagant, was in fact sorely inadequate. You forgot about limit moves, 40 tick runs without looking back, worst possible fill situations and. . . . The data you did the testing with was supposed to be okay, but really was not all that good. Your confidence in your testing techniques is hitting a new low along with your account size.

• The broker who is executing your trades seems to be missing entries on some of the biggest moves and . . . why couldnt he get that stop right! Or, the trader you hired cannot resist putting his vast experience (one year) to work "improving" what you have struggled so long to perfect.

• The only way to get enough capital to properly fund four systems over the 15 futures contracts you have found necessary to trade for adequate system diversification is to take in, and manage money. Now you have disclosure statements, CFTC (Commodities Futures Trading Commission) oversight, a staff, and more NFA (National Futures Association) compliance issues than you ever dreamed existed.

What about Judgmental approaches?

Wouldnt It Be Nice ...

• You study under the best of the high-powered pros. You achieve a 90 percent win ratio through unexcelled market understanding.

• You live where you want, trade when you want, and rid yourself of the employee hassles that have been bugging you for years.

• You turn a modest amount of money, through skill and diligence, into a veritable mountain of pure financial muscle. You leave an ever-growing portion of it in a high-yielding money market account whose proceeds will allow you to zip off to Fiji whenever you choose.

The Reality ...

• You learn from one high-powered pro, then from another high-powered pro, and although you find some real benefit here and there, you never quite achieve what you expected. In fact, after years of efforts; $30,000 in seminars, books, software, and trading courses; your profit is only barely able to cover your overhead. You havent been able to touch that $50,000 youre out from past trading losses!

• If you cannot find a way to get really profitable and hit a big home run, your savings will be gone in not so many months. You start wondering if you will become someone elses employee.

• The stress and time demands of constantly focusing on that screen, being there for the open, and tangling with the overnight Globex session have you wondering if you will ever get to the local beach. As for Fiji, is there a contract on them? Whats the tick size and . . . where do Fijis trade?

Okay, things are neither quite as rosy nor quite as had as outlined here, but they easily can be. In fact, they can be worse! What follows are some unqualified observations from my direct involvement: the odyssey / have experienced. These are not hypothetical events; real-time living is being described here, so you can see how I arrived at certain conclusions. Then, perhaps you can better decide for yourself where you might best fit in.

Some History

Around 1980, I decided to investigate the futures markets. The plan was to switch from the vehicles I had been trading to what I knew was the most demanding and potentially rewarding game in town. The timing of the switch had to do with my view of my station in life. By that time, I was "well heeled" enough to take what I expected would be a rough transition. I also thought my knowledge level and trading expertise

had reached a level that would allow me to meet this new challenge. I quickly realized two things. It was a good thing I had waited until I was well heeled, and the challenge was a bit more than I had anticipated. Here are the highlights of the odyssey, how I got started in, and eventually became successful at trading futures.

After about a year of trading poorly, I managed a much sought-after meeting through a social contact with an extremely successful and reclusive commodity trading advisor ( ). This man was reputed to have made a bazillion dollars over the past five years in agricultural futures. I wish I could describe this bizarre person to you, but perhaps someone would recognize him, and one prerequisite for his tutelage was that I never reveal his identity. Of course, I never have.

After a few pleasantries, this cerebral type began our discussion of futures: "What if you were a Martian and you came to earth to trade commodities." Hmm. . . . "You look at this action, that action, another action, and so on. Not being able to speak English, you simply watch actions. Prices fluctuate." He went on, "You talk with your Martian friends about these actions and you wonder about appropriate reactions." I looked at him as if he were Moses holding the Commandments behind his back and musing about the fit of his sandals. After an hour of this much cloaked "benefit," I was so befuddled and confused I was willing to settle for which way soybeans might be going. I could only hope that information wrjuld allow me to get back the cost of my travel to see him!

This man was the first of three mentors I was fortunate enough to have. Their kindness and willingness to share with me weighed heavily in my decision to begin teaching in 1986.

So what was all this about Martians? It took me a while to figure it out, but he held the key to the gold box and he wasnt about to share it with a stranger whose intentions, interest, and sincerity were unknown. This meeting was the first of many that stretched over a period of about three years. I learned a lot from this man who traded strictly and competently from the basis of a nonjudgmental system. But, strangely enough, none of what I learned was what I was after in that first meeting. He taught me that:

• There are no absolute heroes, only heroes for a while.

• All nonjudgmental systems eventually fail (stop making money). Your hope is to be using one while it is working.

• Excellent information can be gleaned from a true expert once trust, eligibility, and prerequisites in your knowledge base are established.

• Nonjudgmental systems are lucky to achieve 50 percent winning trades; 30 percent is acceptable.

• Trading a nonjudgmental system is difficult and stressful. It requires tremendous concentration, diligence, and self-discipline.

• There is an awesome level of challenge, fulfillment, and discovery in the entire trading process.