Derivatives are the key to the rabbit hole

Successful trading (trading 101) is about controlling, not eliminating risk.

Or better yet protecting one's capital and understanding probabilities of a particular outcome. Risk is ever present and quite often can't be truly anticipated. Fat finger/flash crash/black swan event anyone!!
 
VTS said:
You can't prove risk free trading doesn't exist. You can only find evidence for it's existence, and when you come up empty handed the intelligent person concludes that based on what we know of the world we live in, the complete lack of evidence must therefore mean it does NOT exist.
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Absence of evidence doesn't means evidence of absence !
But I agree with the first part, that we can't prove flying saucers do not exist.

From the great Feynman:
“Some years ago I had a conversation with a layman about flying saucers — because I am scientific I know all about flying saucers!
I said "I don’t think there are flying saucers’.
So my antagonist said, "Is it impossible that there are flying saucers? Can you prove that it’s impossible?”
“No”, I said, “I can’t prove it’s impossible. It’s just very unlikely”.
At that he said, “You are very unscientific. If you can’t prove it impossible then how can you say that it’s unlikely?”

BrandNewTrader,
You can't talk about risk-free unicorns and leverage together.
Otherwise you will blow up as well as LTCM did.
 
Reminds me 42 from H2G2 (Epic movie). A civilization ask, to a supercomputer, the ultimate answer to the world and the entire universe. The computer tell them the answer. It's 42. So they have the key. Right. But they don't know what the heck they can do with that f*ckin' answer.

So you guys believe to know the answer.
Okay ... But concretely it's worth peanuts.

So stop askin' for the answer.
Just get your hands dirty.
And make it works.

Since there's no right nor wrong answer.
Especially down there, outside theoretical physics, where clouds haunt even the most deterministic, clockwise, dynamics.
 
Risk free is the wrong term to use. There is certainly risk that needs to be managed successfully. A good example is when schwartz was one of the early guys reading the overnight physical and financial bonds right before the equity close to make overnight bets on the s&p futures when they were first offered by chicago. He rode that edge for months. It's like printing money. Finding cross market and other obscure correlations above 0.7 (?) Offer enough statistical advantage to be traded profitably to the point of guaranteed return in the context of a pro or semi pro. If you're good enough your research and awareness is generating high probability trades on a regular basis. But what if it's a loophole afforded by leverage and financial engineering? The question is then what's the definitively correct term for a guaranteed profit based on obscure edge / loophole?
 
BrandNewTrader said:
Risk free is the wrong term to use. There is certainly risk that needs to be managed successfully. A good example is when schwartz was one of the early guys reading the overnight physical and financial bonds right before the equity close to make overnight bets on the s&p futures when they were first offered by chicago. He rode that edge for months. It's like printing money. Finding cross market and other obscure correlations above 0.7 (?) Offer enough statistical advantage to be traded profitably to the point of guaranteed return in the context of a pro or semi pro. If you're good enough your research and awareness is generating high probability trades on a regular basis. But what if it's a loophole afforded by leverage and financial engineering? The question is then what's the definitively correct term for a guaranteed profit based on obscure edge / loophole?
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Aren't these types of edges gone now with the introduction of HFT ?
 
BrandNewTrader said:
Risk free is the wrong term to use. There is certainly risk that needs to be managed successfully. A good example is when schwartz was one of the early guys reading the overnight physical and financial bonds right before the equity close to make overnight bets on the s&p futures when they were first offered by chicago. He rode that edge for months. It's like printing money. Finding cross market and other obscure correlations above 0.7 (?) Offer enough statistical advantage to be traded profitably to the point of guaranteed return in the context of a pro or semi pro. If you're good enough your research and awareness is generating high probability trades on a regular basis. But what if it's a loophole afforded by leverage and financial engineering? The question is then what's the definitively correct term for a guaranteed profit based on obscure edge / loophole?
More...


Again you are confusing a streak of successful returns with risk free. Even if a person demonstrated 100 straight months of profit, that does not mean it was risk free. Every trade that is not manipulated has risk, period.

I don't know why more traders aren't able to separate results from process.
 
VTS said:
Again you are confusing a streak of successful returns with risk free. Even if a person demonstrated 100 straight months of profit, that does not mean it was risk free. Every trade that is not manipulated has risk, period.

I don't know why more traders aren't able to separate results from process.
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I started out by saying risk free is the wrong term to use. But guaranteed is accurate, as in no matter what the market does now, as long as i follow my methodology, stops, fills etc i am GUARANTEED to make a profit. No divination or tea-leaf reading required. Again i ask, how would this be classified?
 
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