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Well, it received a higher rating than this one :D

The major flaw in my argument that markets are so competitive that it's not worth playing, I explained here: "A lot of people on EliteTrader will beat the market… here is why". I no longer hold the view that markets are efficient, I only believed in this for a week after five years of beating...

OK then, my intuition is wrong about the return of the short traders but my original premise that the average trader will receive an average return can still hold. Let's imagine a trader who only trades from the short side in the stock market. You are correct that on average he should have...

That's good to hear. Do they trade stocks mostly and in what time frames?

That's an interesting concept in theory but of course is very difficult in practice. Nevertheless I think we continually apply the blue ocean strategy in the markets. For example some 30 years ago there was a huge demand for a moving average crossover strategy. The market just paid a lot for it...

May be there is some truth in this. But here is how I look at it. Options trading is a zero sum game, just like poker, which means that it is open to competition and change. The philosophy on which Taleb's strategy is built is not much different than the philosophy on which trend-following is...

This is not quite correct. If you invest in a couple of ventures trying to find a new market or niche you will probably lose money on most of them and if you are fortunate you may have a winner to pay for the losses and succeed. So there is a cost. Now if someone else gave you the money in...

Well, yes, you are correct. Your returns from going both long and short should be less correlated to the overall market. Intuitively I feel that you would still be able to do some 10% a year, which is what the market averages, but I cannot prove it. May be you will miss half the bull moves and...

I would only add that in sports betting the spread is much higher which makes it even more difficult to beat the game. It is more acceptable on betting exchanges like betfair.

Very good post by MAESTRO, I agree. Indicators are derivatives. As for experience, I helps as long as it doesn't make you overconfident - only the paranoid survive.

I can never beat that. Will you take my money to trade? You can keep 50% of profits as performance fee.

Oh, some people will definitely lose :)

What is it that you didn't understand in my post? I've read Taleb and watched many of his interviews. The guy seriously underestimates competition. You can't just buy insurance and wait for the bad thing to happen. You have to be a trader - buy the insurance when it's cheap and sell it when...

I realized that I am wrong and that the market can be beaten. So I opened a new thread "A lot of people on EliteTrader will beat the market… here is why".

OK, guys, I know it looks like I am arguing with myself, but I found the weak spot in my argument that "you cannot beat the market" that no one brought up. I know that many of you will say - what was this all about, we knew we could beat the market and didn't need anyone to prove it to us. But I...

No, I try to trade in the direction of the primary trend in whatever time frame I am watching. Of course there are always opportunities to fade some moves in the smaller time frames but that's not a basic strategy I use.

If some participants have some knowledge of the future price or odds, and it is legal to trade on that knowledge, then it will already be reflected in the price if there were a huge number of participants in the market. If however it is illegal, then yes, their knowledge will not be reflected in...

They certainly trade both sides. But since there is a long term economic trend which is up (+8% a year on average), the larger part of trading profits will naturally come from long trades. Of course you can trade the short side in a bull market and make money, but not as much as if you traded...

That there is a majority of consistent losing traders in the market (say for 10-20 years) if you add back the trading related costs like commissions and fees (which are profits for brokers and not for other traders).

I didn't want to spark a discussion for arguments' sake. My point is very simple - regardless of your intelligence and past success, you must avoid competition as much as possible. The stock market may not be perfectly competitive, but it is the most competitive market in the world. It is...