Can Trading Edges be Quantified?

Ronb,

I totally agree with you. Until recently, I've been a purely discresionary trader, so I have developed some sense of what you are talking about. I especially agree with your thoughts about position sizing. At the moment, I'm WAY under trading in terms of size (NO MARGIN!) until I can get a better feel for how my systems work under various conditions.

What I'm finding most frustrating of all is Easy Language. It's not so Easy! I feel as though I have to simultaneously develop my trading skills AND learn a new language. Obviously there is some overlap, but I'm having trouble describing things I would do as a discresionary trader.

Having said all that, one great thing about automation has been being able to direct my focus to where it is most needed. The computer is scanning mulitple markets, which would be difficult for me to do alone....

TigerO - how the heck do you make those cool symbols??? Inquiring minds want to know~
 
Ronb, yeah, I'm pretty sure that if you had the guts to actually do that in real time you'd have a pretty decent chance of making money with a random entry system that cuts it losses and gives lots of leeway to winners and based on great position sizing, and then you go and improve that with some stable market common sense based entries and exits, and that's really all it is.

I really believe that trading is simple, which of course isn't saying that it's easy, because we're just humans
bouncer.gif


Btw,I really loved reading Darvas
w:)

Lightningsmurf, I punched Smilies into Google and came up with

http://www.plauder-smilies.de

Enjoy
 
hello zone,

trading is an art as well as a science. the science (system) gives one parameters, the art is the execution and the intuitive feel. an interesting book i would reccomend to you is "the predictors" by bass. it's about a group of quants with major backing developing the "perfect" system.


zen trading guerilla,

surf
 
Yeah, the Predictors, although weren't they bought up by WDR now taken over by UBS in 2000, while results at UBS haven't really shown all that great an improvement since?

Not putting down systems by any means, just saying one shouldn't expect a holy grail anywhere.

Systems that work, sure, more than enough of those around that aren't being sold but being used on a proprietary basis to have proven the point. Just not a pot of risk less gold waiting to be discovered lying around somewhere.

Marketsurfer, I do agree with that art and science business being the ideal combination.

 
thanks for the reply. those guys (predictors) claim to have beat the roulette table. wonder if this is accurate ? i have found that the most simple systems are the most effective---- your KISS.

best,

zen guerilla surf:cool:
 
Originally posted by marketsurfer
i have found that the most simple systems are the most effective---- your KISS.

best,

zen guerilla surf:cool:
More...

Agree, simple and robust, don't care about the individual trade, just think about way down the road.

Best of luck:)
 
TigerO:

Guts comes with experience and confidence. Personally, I prefer to locate strong trending stocks to improve the selection process (if I'm over 50% with winners, I'm very happy).

Darvas took tremendous risk (IMO, since he didn't truly understand position management) when employing large position sizes with 10-20% trailing stops (given his initial portfolio size). But, the risk paid off (and you can't deny him that). I think the book is one of the classics, and provides more inspiration for the KISS approach than Jesse Livermore.

Originally posted by TigerO
Ronb, yeah, I'm pretty sure that if you had the guts to actually do that in real time you'd have a pretty decent chance of making money with a random entry system that cuts it losses and gives lots of leeway to winners and based on great position sizing, and then you go and improve that with some stable market common sense based entries and exits, and that's really all it is.

I really believe that trading is simple, which of course isn't saying that it's easy, because we're just humans
bouncer.gif


Btw,I really loved reading Darvas
w:)

Lightningsmurf, I punched Smilies into Google and came up with

http://www.plauder-smilies.de

Enjoy
More...
 
Gosh, this is really gonna be my last post for this week, now, but again, Ronb, we're in full agreement.

I loved both those books, Livermore was what actually got me interested in this in the first place, and Darvas was a great follow up that I discovered later.

Upping the ante absolutely has it's place on certain occasions and if you want to hit your stretch targets, but it's most definitely to be applied with caution.

Have a great weekend !
 
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