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I nearly always depend 95% on my farm system for talent. The only free agents I will pursue are because I have no alternative from my farm system. I do not make trades either, if I can help it. When I do, it is usually just to find a home for a player that I cannot use.
To build a team exclusively with the farm system takes a lot of effort. Not only do you have to identify the best talent in the draft, but you have to make sure that you have a steady supply of talent at all positions. Spending your #1 pick on a catcher for 3 years in a row might insure that you will have a good catcher in the future, but it will also insure that you are substandard everywhere else.
I draft on a ten year plan. I have ten draft "patterns" that I rotate each season. They are plans on what positions to pick in what rounds. Thus, in every 10-year span all of the positions have been everywhere in the draft and this helps keep my stream of talent even across the board.
However, I do not stick rigidly to the scheme. If there is a player that is clearly superior to any in the position I desire to pick, I will pick the superior player and make adjustments in the future lists to compensate.
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