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More musing from my reading. In my first post I made an assumption that all edges that can be constructed from publicly available data are being fully exploited and that gaining an edge would require access to unique data. This seemed quite reasonable at the time given my ignorance and the...

Yes, but there are even more high level thinkers that are really poor poker players. Actually poker is not a very good model for the market because of the problem of segregation. Poker players don't all play at the same table at the same time, but in little groups. If you consider a large...

I think it is more a case of horses for courses. The market may displays no features of model 2 at all. If this is true then smart people should stay out of the market. They don't think like the other players so can't understand what is going on. Just as it is nearly impossible for average...

No argument, just lots of interesting discussion :) Yes it is an assumption that all exploitable edges that can be constructed from publicly available data are being fully exploited. It is quite likely that some have not yet been discovered, or are only being partial exploited. The real...

Some further thoughts. I like to make models of systems to gain an understanding. Doing this it is possible make two simple models of the market. 1. A random-only model market. Imagine that the closing prices for every security is set by elves rolling dice. In this market the closing prices...

Thanks for the advice. Even more for me to think about :)

It is possible that I am overthinking, but it is hard to do much about this as this is my nature. There is about as much point telling a smart person to not think as there is to telling a dumb person to think :) Given my strengths and weakness I need to find strategies that suits my personality...

My understanding on options is they are equivalent to a leveraged long or short position with a guaranteed stop loss position. Apart from being able to avoid gaps, what other benefit do they offer? Don't they also have higher trading costs?

I am considering everything at the moment :)

Ouch! I only lost a bit of money from my stupidity (about a 1/4 of my play capital) - my natural caution saved me from making too big a mistake. I still think that fundamental trading is a good idea, but as already mentioned in this thread it requires a large amount of capital and no...

Thanks for the heads up on the thread - I guess I have a bit of reading ahead of me :) I case anyone else is interested here in the link to that thread http://www.elitetrader.com/vb/showthread.php?s=&threadid=33654

I wasn't suggesting that the approach that I have taken to date is the best, in fact the more I have learnt the more I think it is poor, hence my other posts. The first problem is I have no idea of the validity of my mid-term predictions. Just because they have worked to date doesn't mean...

I am not a value investor (only an involuntary one via my pension). My experience has been that I can "see" the future price direction of some stocks 2 to 3 months out with a very high success rate (actually 100% on the 22 predictions I have made over the last three years). I never had an...

I think I have a good idea of what the posters here will tell me :)

I have gone back to tried to work out why I lost money (one of the reasons I ended up here). The reasons were fairly obvious in hindsight - excessive leverage (10 to 1) and buying in too early. My trades were not short term plays, but mid-term predictions based on economic and political data...

The base player is providing the signal. If the drummer starts following the lead guitar then things won't sound too good.

I am amazed at the level of anti-intellectualism displayed here - have a look at the really successful traders - are they intelligent, or they idiots with a good "feel" for the market. If it is the former then maybe thinking is not such a bad thing.

I do think a lot, but that is my nature :) I am very likely to be wrong (almost certain), but I am most interested in knowing why I am wrong. Every hypothesis I can disprove brings me one step closer to the correct hypothesis. I can't believe that people here are not worried that the trading...

If the majority of traders in a stock were insiders then any information that could cause a price shock would be reflected as soon as the insiders knew (ie the stock would not move when the price shock news was later publicly released the stock. A stock with this much insider trading would be...

Since some people seem to have found my post entertaining I will continue :) I have been thinking more about the trading strategies that are used. Assuming that most traders (even the successful ones) are actually using random strategies that they have either mined out of back testing, or...