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Baseball to Finance: It’s All About The Numbers

Some good feedback, interesting story and more trend following validation:

When I was young (late teens), we’d play ball in the summer and then we’d to play a game called Stratomatic Baseball in the winters when we weren’t playing hockey. You ever hear of it or play it as I’m guessing we are probably of a similar vintage.

Really cool game, but offered similar or perhaps traps analagous to what you find in trading. You had a team with cards based on real player capabilities for fielding, base running and hitting and then pitchers cards took into account the pitcher’s abilities such as hits, extra base hits, homeruns allowed, strikeouts, walks etc… (this was obviously well before the days of Playstations and X Boxes and the like). Pitchers would tire after so many innings and then other areas of their card would be enabled. We forced a strict rotation so you couldn’t start your ace every game.

During gameplay you rolled three die one of which was a different colour than the other 2. If the different die was 1, 2, or 3 you looked on the hitters card, if 4, 5, or 6 you looked on the pitchers card. Each card had 6 columns and 11 rows (from 2-12). Pitchers had a 4, 5, or 6 column for right handed batters and another set for left handed batters. Hitters had a 1, 2, or 3 column for right handed pitchers and another set for left handed pitchers. You’d look at the appropriate “cell” on the card and determine whether you had a hit, walk etc… and if a hit where it was hit to. this then allowed you to determine whether a runner on base could try to stretch from first to third or second to home depending on the fielders ability at that position and his arm strength etc…

My buddies and I would have a 48 game season and then a 7 game world series and of course we’d play for money. I was the only guy to consistently make money and I made it to all 4 of our world series events (winning only one). The reason for my success was really really simple. My buddies new a lot more about major league baseball than I did (a lot more), but I didn’t need to know anything because I had the cards, and I broke the cards down into simple math. I had a lot of data that I used to manage the team with whereas my buddies played the players they loved and who would hit the 3-run homerun a la Earl Weaver or the guys with the celebrity handles. I fielded a lineup every game that had a good probability of winning against that pitcher in that ballpark and I knew who to use in a hit and run because of the cards. This strategy worked well over a 48 game season, but was more vulnerable in the short term where luck played more of a factor which is why I only won one world series. I did make the most money by far though.

So, when I read your book, trend following made a lot of sense. It boils the information down to that data that really matters versus all of the other noise, and it’s working with the information that you absolutely know not what you guess or even worse what you hope for. Interesting. How would I go about ordering that T-Rex system? Any chance you’re considering a Spring celebration discount for flagship alumni?

Cheers, Derek

Thanks Derek. If interested in one of our trend following systems that run on Tradestation drop me an email for all of the details.

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