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Buy the ASK Sell the BID
Monday, October 16, 2006

Here are some helpful visitor comments received in the last 24 hours.

The first relates to the confusion regarding bid and ask prices experienced by beginner traders.

Posted by Nik 

"This is the line I used to use when I first started."

"Buy the ASK , Sell the BID"

The second is an observation regarding trading systems offered by others and backtesting.

Posted by Dropout

Anyone offering a new system should be able--at minimum--to say that they've manually backtested it for at least a year's worth of data, resulting in "x" number of winning trades and "y" losing trades, for a profit of "z."

However, 99.9% of the time, experts selling systems, and those posting their systems on message boards, say, basically, "Here's a system I've been fooling around with. I looked back at a few trades I could have made with it, and it looks really good." Then, they and others who follow their advice start trading the system with live accounts.

As you can probably tell from my tone, I think this is a bad idea.

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