In his book, "A Short Course in Technical Trading," Perry Kaufman offers some sobering statistics on the matter. According to this veteran program-trading expert and author, "You can expect six or seven out of 10 trend trades to be losses, some small some a little larger." Yet, Kaufman says that trend-following systems are some of the best trading systems around. In other words, trend-following systems won't yield huge profits, but they'll still do better than most systems.

It will probably come as a shock to those who have spent countless hours searching for a winning system, but Kaufman makes it absolutely clear in his book that having realistic win/loss expectations means expecting losses - lots of them. He states, "As a trend trader, you should expect mostly small losses, some small profits, and a few large profits."

If it gets across this point alone,"A Short Course" is a worthwhile addition to your library. Kaufman provides an example to demonstrate a phenomenon that traders in the game for the long haul have come to learn the hard way: