Long before I had put the Cable Glider system into production or even given it it’s name, I had always thought of trading systems as belonging to one of two broad categories.  The first one, which I call a Grinder, is a system that exploits short term statistical anomalies and derives its edge by having a high winning percentage, but not necessarily from having a greater average win than average loss.  I have toyed with a grinder type system with the Euro over the past few months, but this system is not something that I’m very confident in.  In fact, the system has generated very little profit so far, but thankfully, it hasn’t generated significant losses either.

The second category of trading system that I think in terms of is the Home Run Hitter.  This type of system derives its edge from achieving greater average wins than average losses, but not necessarily from a high winning percentage.  The Cable Glider falls squarely into this category.  I’m much more comfortable trading this type of system, but no matter how well the Cable Glider works, I continue to feel vulnerable without a stable portfolio of other systems to back it up.  I’m sure I’ve mentioned this before, but the fact that the Cable Glider has worked so well makes my other attempts at system development feel like failures, even if these other systems are marginally profitable.

At any rate, my first goal for 2008 is to create a Grinder style system that will work for the British pound.  So far, even in the context of trying to create a grinder system, I’ve found it very helpful to stay out of the markets on days of significant economic releases.  It seems to me that on these days, the market ignores technical setups to a large extent as it schizophrenically adjusts to the new data.  Right now, I have a one parameter system on the 4 hour chart for the British pound that tests as well as the Euro system that I currently have in production.  The rules are so simple it’s almost stupid, but again, the system would not work well at all without the economic release date filters to keep it out of choppy waters.

So if I could offer anything as a word of advice to aspiring traders, it would be to examine how economic releases such as the employment report, the CPI, central bank interest rate decisions, etc, affect your trading strategies.  I continue to find a dual benefit to staying out of markets on those days…a chance to preserve my capital, and to recharge my mental batteries to trade clearly….LATER…in calmer conditions.

 Good luck to all in 2008.