magic of proper money management (which we address more thoroughly in
Chapter 4), and the power of trading several seemingly less tantalizing systems on
several markets. That is what this book is about.
Before we close this chapter, let me once again draw your attention to Active
Tradermagazine, which during the fall of 2001, featured a series of articles by the
renowned systems developer Dennis Meyers, Ph.D. In these articles, Mr. Meyers
showed that the larger the profit factor (above two) during initial testing, the less
likely a system is to hold up in the future, when the system is traded for real or
tested on previously unseen data. In these articles, the system was an intraday
breakout system tested and traded on IBM with five-minute bars.CHAPTER 4 Risk 55