Developer's Interview with Michael Mermer
From the October/November 2001 Issue of Futures Truth Magazine

NAME: Michael Mermer
EDUCATION: B.A., J.D., Hofstra University
BACKGROUND: 1990 to date, President, TradersSoftware.com
CURRENT POSITION: CTA
FAVORITE BOOK ON TRADING: Technical Traders Guide to Computer Analysis of the Futures Market by LeBeau & Luca

The last few years have been tough for trend followers. To what do you attribute your ETS Daytrade System's consistent performance and why have trend followers suffered through the last two or three years?

We do not totally agree with the statement "tough" for trend followers. We have found the contrary and ETS has had some of its best years ever the last few years. Many newer systems were designed and optimized for bull markets only. The systems fell apart once the market started to decline. This last year, we have been in a bear market on most major indexes so the system's design had to take into account what would happen in bear markets. Since ETS was originally designed in 1990, during volatile up and down markets, it has held up very well over time, especially the last few years.

Do you have any advice for those who trade your systems or any other systems?

Trends are defined by the time frame you look at. On a one minute chart or tick chart, there are dozens of trends per day to trade. As you go up in time frame, the number of trends decrease. You need to find a comfortable time frame to trade that meets with your personality. What works for one trader may not suit another and the number of trades you wish to make per day should determine the time frame you look at. As a general rule, the longer the time frame, the more relevant the data is and more reliable the signals - this goes for most any trading systems.

Is there anything that you would tell to those new to trading that you wish someone had told you when you were getting started?

Yes. Expect both wins and losses. If you are looking for a system that has no loser, forget trading and go onto another hobby. Systems are best judged by the risk/reward ratio, not the number of wins to losses. You can make a tomorrow of money on a system that is only right 40% of the time so long as you have big wins and small losses. The gross number of wins is meaningless without looking at an entire system. And, trading is not for everyone. If after 6 months you find you cannot make money consistently, don't even consider making it into a business.

You can see the rest of this interview in the October/November 2001 backissue of Futures Truth Magazine. Order your copy today!