rivkin's actual returns - from report 13/01/03, page-5

G'day,

Just to add a little to the discussion.

Getting 70% of one's calls wrong is not necessarily bad. It is in fact quite conceivable to have 70% of one's trades go against you but still make a profit. Many traders work on this type of scenario. Ie many small losing trades and a few highly profitable ones. Concentrating on the number of successfull trades can be misleading.

The difficulty, when trading this way, is to ensure that one makes every trade that the system calls. For example, if your "system" is to follow Rivkin because you are happy with the returns indicated by his track record then you must make every trade that he recommends. The one trade that you decide not to take may be the one that turns the year from a loss into a profit. If you attempt to "overlay" the system (Rivkin, in this case) then you are syaing that you have a better system and therefore you should throw away the original system (Rivkin).

Another issue to consider. Does Mr Rivkin tell you how much to put on each trade or are his quoted figures based on an equal amount placed on each trade? Does he give a risk factor for each trade so that you can work out a position size that suits your risk/reward targets?

I hold no particular opinion on Mr Rivkin, one way or the other.