Do the opposite trade

[jys78]

If a trader is a consistently lousy trader, doing the opposite trade might make you
very rich.

you can install an 'inverter'.
when you buy something, the inverter will convert the order to sell and vice versa.


similarly, you can sit next to a lousy trader.
if he sells, you buy and vice versa.

This. Someone who is consistently wrong is a very valuable indicator indeed.

 

[ellisdelgado]

As long as you are good at risk management and money management, you can make money even by taking the opposite trade direction. As far as it is about the guarantee of making money, then sorry to say, there are obviously no guarantees in the market. It is unpredictable and you will have to deal with it that way only.

 

[sandy_s]

As long as you are good at risk management and money management, you can make money even by taking the opposite trade direction. As far as it is about the guarantee of making money, then sorry to say, there are obviously no guarantees in the market. It is unpredictable and you will have to deal with it that way only.

Risk management is the foundation and secondary.

Taking position is primary..

Good entry will make money more often.

Bad entry will lose money. The tricky part is - sometimes the bad entry makes money...that inculcates a bad habit.

If a strategy can’t predict correctly most of the time - it should stop trading.

 

[David's faith]

Many years ago, I experimented and designed profitable systems that used random entries; and stop-and-reverse entries/exits. The edge was in the loss, profit, and/or time stops.

I also ran a trading contest and entered a dummy (control) trader that traded based on the first digit of a state lottery pick-three daily draw. It outperformed all traders (several) for three months, and was freakishly profitable (on paper, of course) with low draw downs.

That said,

It is just as difficult to make a system that is wrong 80% of the time, as it is to make a system that is right 80% of the time. Think about it, they are one and the same.

Most losing systems are around 50% (i.e. random), imo. slippage, commissions, and what I call the percentage paradox is why reversing such a barely losing system, will not create a winning system.

I call the fact that losing 10% (or any percentage) will require winning more than that initial percentage (or increasing risked capital) to get back even, the percentage paradox.

Yes, however you could outdo this by trading on margin, for example 1 futures contract like MES. The thing is profits don't scale either in that case

 

[traider]

To do this, there is a wide range of options. You can either turn your monitor upside down, or you can stand on your head or hang by your ankles while trading with eyes glued to your right-side-up monitor. Any of these methods should work equally fine. Hopefully someone will soon try one of these equivalent methods and report back on the results.

I've just completed a thorough analysis using Ricardo's equivariant tensors on polar manifolds on my liquid nitrogen cooled decicore® AMC server and can confidently report above recommended methods are in fact equivalent.

What has occurred to me in the meantime is that the same result should be attainable by simply painting over any data and graphs on your monitor and proceeding to enter orders as you see fit. I shall test out that next. And yet another equivalent occurs to me. Why not simply use a felt tip pen to draw a pretty price-time graph on the monitor and trade accordingly? This method recently worked for repositioning hurricanes, so why not give it a try?

I just put a sell sticker over my buy button and a buy sticker over my sell button

 

[tomorton]

I just put a sell sticker over my buy button and a buy sticker over my sell button

I honestly think some days I should stick a "Do not touch!" sticker over both Buy and Sell........
Hey ho.....

 

[virtusa]

Brilliant, this is exactly how Jim Simons makes money.

Did he tell that to you? What did he exactly tell you?

Oooh, you are just guessing...

 

[virtusa]

You may run a simulation where 1000 clueless traders make 1000 trades each a year. From those 1000 traders you may have X amount of really successful traders but if you average all of their returns they should still be losing money .

If you do that test a few times, you will have each time other traders who are the winners as you use random data. Which one will you then follow?

Reminds me of people who optimize a MA on past data and use the best MA for trading. But each trade the optimal MA is changing, so they are always running behind.

 

[virtusa]

Conclusion would be: You don't need any knowledge to trade ,just do random trades.

My conclusions:

• this is the first "profession" were no knowledge is needed (according to you)
  
• you have no clue what trading is
• even the biggest idiot can make millions without even knowing what he is doing (according to you)

If you would have knowledge about trading you might at least try to optimize the random signals to improve your chances. This would implicate knowledge about trading that will be needed.

You cannot just reverse trade bad signals to make them good. There are a lot of factors that makes a system work. Leverage, where are the stops, where are the take profits...

Just one example:
If a trader is constantly losing, maybe putting the stops further away (because he is always stopped out) might make that system very profitable.
If you would reverse that system you probable will lose much more then by moving the stops. You will have to analyze each separate signal to see the specifics of it. Not each loss is based on the same problem.

 

[virtusa]

This. Someone who is consistently wrong is a very valuable indicator indeed.

No, I just gave an example in my previous post that shows that all depends on a lot more information about each trade. In my sample reversing the trade would not work because the onkly reason why he is losing can be that the stops are too close. So he can theoretically be always right about the direction, but is too afraid to stand the heat.