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It would appear that most mechanical systems are based upon solid money management, some simple price channel breakout rules that adjust themselves to underlying volatility and then the trader's discretionary management to assess in which market he will put the system to work. The trader might...

Well, that's an assumption out of his account size. He certainly has to diversify his portfolio among several markets. If that's the case, how can he track all markets without the aid of a computer?

Could you elaborate more on logical discretion? Thanks. From reading their interviews, it seems that both Ed Seykota and George Soros aren't trading 100% mechanical systems. Here and there they use some discretion. On the other hand, I don't think there are 100% discretionary traders. In a...

It does work: http://www.originalturtles.org/

Oh, yes! Good point!

No, I don't. I was just curious to know something about the hedge funds mechanical systems' modus operandi. Do you know of Lee Gauss trading system? He's been marketing his system (probably to attract investors and set up a fund) and it seems to be a good one. It sounds like he's working with...

Yes! They also claim that they use only reactive indicators. Does anyone know of a proactive indicator, such as one that goes ahead of price? I would like to incorporate that into my tools.

The Turtle philosophy seems to be based only on buying new highs and selling new lows, as a follow-up to the Donchian System for mechanical trading. I also notice they don't mention central tendency and volatility expansion/contraction cycles in their website, which seems to be more popular...

Dear brethren: Has anyone taken the Turtle Trader Course? Is the course worth its dollar value? Is the content original or something can be found in most books on trading? I will appreciate any comments. Thanks. OPC

Dear brethren: I was browsing through the board and found this interesting thread about options trading. I would like to know your ideas about buying naked options. What do you think are the odds for a profitable trade in this respect? With regard to strategies would they be limited to...

... in the sense that brains have nothing to do with balls.

Thanks for the link.

WDGann: Thanks for your comments and expertise. For the time being, however, let's say I will limit myself to grasping the concepts of mechanical trading so as to better understand market dynamics. OPC

ET: That's the random factor I was talking about. Hence risk management becomes a key component. Thanks for the book. I guess it's what I needed to grasp some mechanical concepts. I will read it as soon as I can. With regard to the principles I outlined before, that's the way hedge...

ET and WDGann: I would not say that wind direction is completely random, in the same way I believe that markets are not completely random. What perhaps I am trying to convey is that we have an interesting phenomenon nowadays. With so many funds in the commodity and equity markets, there is...

ET: Would you give me only three principles upon which non randomness is translated into mechanical instructions? I mean, if you had a large fund under your control, and you could give only three instructions for your computer, which ones would you give? OPC

For me, discretionary, as applied to trading, means using the human judgement for trading decisions. Mechanical, on the other hand, means systematizing the human judgement about market behaviour and translating it into specific instructions for computer execution. OPC

I am interested in learning about mechanical trading as applied by large funds. It would appear that most funds are using the same criteria to make investment decisions, and they seem to be purely mechanical/systematic in nature. I know it's a tall order asking for these criteria in a public...

None, myself. I do not have a trading platform to perform such tests.

Dear brethren: While I myself feel more inclined to the discretionary approach, as it is the path I have taken from the start, I would like to know the way the funds' machines are thinking. I guess the rules applied to mechanical trading have a predictive value given the amount of money...