Collective2

Rebuttal, posted on Oct 8, 2012 by system developer:

I consider any trade that loses to be a "bad trade". Admittedly, the system made "many" bad trades in September. A "high risk" trade, however, is one that risks too much capital relative to what's available, and there were only three of those in my book.

If you consider three to be too many, then I do sympathize and apologize, though that does little to ease the pain of loss. However, it is up to you to adjust the trade size relative to your account. You can't expect to trade the exact same size positions with a $3000 account as with a $20000 account.

I also take issue with the criticism of not considering Fundamental Analysis. That is not what this system is about, and not even mentioned in the description. Granted, I am often aware of Fundamental events, but only in preparation to react to the price action at that time. In the end, I am only concerned with the Technicals, because regardless of events and news and economic data trends, the price actions tells me everything I need to know. If you are not comfortable with that, then you shouldn't be following this system.

All that said, the system requires some human element for risk management, and perhaps that is its greatest downfall. So blame me, but don't blame the system. It makes money over time, and lots of it. A theoretical gain of >50% since the start is surely worth of more than one star. Still, I know that timing is truly everything, and I'm sorry you were unable to participate in prior gains.

In short, yes, I failed to follow my risk management strategy to great detriment, but September was an extraordinary month of events that changed only the short term landscape. And indeed, the great thing about being human is that we can learn from our mistakes. So I remain confident in the system's profit potential, and I have recommitted to following the risk management strategy and superior technical analysis that got me here thus far.