Depends on the time of day and the volume. In the morning, with high volume, MMs let the crowd take the market where they will, and content themselves with the spread and making the crowd periodically slightly wrong by shaking them out of their good positions with retraces. During mid-day and in low volume, they lead the crowd around by the nose by repeatedly making their majority positions wrong. It is easy to show that all day long the crowd is wrong by at least the spread, and often by as much as a tick more. Nice work if you can get it. The only way to win is to judo their style. Regards. Al.
Do you have a EDGE over the market?
- Thread starter benysl
- Start date
Rubbish. There are more ways than one to skin a cat.
Sherlock
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Tao te Ching, tetragram 56:
Those who know do not speak
Those who speak do not know
Block the passages
Close the door
Blunt the sharpness
Untie the tangles
Harmonize with the brightness
Identify with the way of the world
Determine the trend of the market on a long term basis and enter batch positions on a short term basis. Short term for me is 2 to 6 weeks. I use batch trades because 1... Reduces risk, you gotta be nuts to put all your money in one or two stocks. 2... They way I pick stocks I usually get one or two or three in the group that really take off (or drop like a rockwhen short). 3...You never really know which stock is going to move.
If you only enter one or two stocks, the whole market could be advancing and your stocks can still go down. This is a numbers game not a stock prediction game.
Here is some real stats from 5/2004 to present...
Compounded Rate of Return 38.52%
108 winners 102 losers total 210 trades for 51%
What keeps me in the green is my average winners to losers...
Ave winners Avg losers
Long Trades $1,323.93 ($836.28)
Short Trades $800.89 ($465.30)
All Trades $1,057.28 ($616.72)
But In my opinion your barking up the wrong tree...... I actually just broke above the 50 % mark with my last trades over the last two months... I'm was in the 47 to 49 % from 2004. But then again 2004 was a crappy year for trendfollowing. But in reality, it wouldn't hurt to have both on your side... % trades profitable and average winners to losers....
I did a back test from 2000 and was at 57 % winners but again the real key is in the average winners to losers. The backtested
Compounded Rate of Return was 140 %
. Of course this is assuming we could have shorted all the stocks that the system picked to short....In any event the system thrives on a trending market..up or down...From 1997 my backtested results were 73 % winners...but everything was going up from 1997 to 2000. Compounded Rate of Return was 123 %
So to answer your question...define your trend...then apply it consistently ....trade portfolios of at least 15 ...not a few stocks ....
when you need to buy stocks buy good ones that are meeting and beating estimates and when your shorting, short junk.
Good luck ...
Nick
Quote from NKNY:
Determine the trend of the market on a long term basis and enter batch positions on a short term basis. Short term for me is 2 to 6 weeks. I use batch trades because 1... Reduces risk, you gotta be nuts to put all your money in one or two stocks. 2... They way I pick stocks I usually get one or two or three in the group that really take off (or drop like a rockwhen short). 3...You never really know which stock is going to move.
If you only enter one or two stocks, the whole market could be advancing and your stocks can still go down. This is a numbers game not a stock prediction game.
Here is some real stats from 5/2004 to present...
Compounded Rate of Return 38.52%
108 winners 102 losers total 210 trades for 51%
What keeps me in the green is my average winners to losers...
Ave winners Avg losers
Long Trades $1,323.93 ($836.28)
Short Trades $800.89 ($465.30)
All Trades $1,057.28 ($616.72)
But In my opinion your barking up the wrong tree...... I actually just broke above the 50 % mark with my last trades over the last two months... I'm was in the 47 to 49 % from 2004. But then again 2004 was a crappy year for trendfollowing. But in reality, it wouldn't hurt to have both on your side... % trades profitable and average winners to losers....
I did a back test from 2000 and was at 57 % winners but again the real key is in the average winners to losers. The backtested
Compounded Rate of Return was 140 %
From 1997 my backtested results were 73 % winners...but everything was going up from 1997 to 2000. Compounded Rate of Return was 123 %
So to answer your question...define your trend...then apply it consistently ....trade portfolios of at least 15 ...not a few stocks ....
when you need to buy stocks buy good ones that are meeting and beating estimates and when your shorting, short junk.
Good luck ...
Nick
Rubbish too.
When a tiger gets hungry he goes looking for some yum-yum food. When he sees a nice herd of yum-yum he will select his prey. And then chase that prey back and forth until it is yum-yum time. If he is chasing and then decides to chase another prey, and then another prey no yum-yum time is to be had. (which is what cubs do).
Moral: Focus on one thing, and one thing only. Learn all the ins and outs of that. Then wait for the right opportunity.
Sherlock
Someone posted this
*****************************
How to win with 30% accuracy:
Expectation = (Win% x WinSize) - (Lose% - LoseSize)
E = (30% x $1000) - (70% x $300)
E = (0.3 x $1000) - (0.7 x $300)
E = $90
*****************************
From Maths view the above is not VALID
You enter a trade what is the chances of it hitting $1000 profit and what is the chances of it hitting $300 stop loss
% of it hitting $1000 profit = 23.077%
% of it hitting $300 loss = 76.923%
To calculate a 30% vs 70%
30% to win $910
70% to loss $390
or
30% to lose $910
70% to win $390
Thus the above scernario after a 100 trades net position is 0 (excluding commission for simplicity)
thus back to my topic, from a mathetician points of view how do you increase the EDGE?
*****************************
How to win with 30% accuracy:
Expectation = (Win% x WinSize) - (Lose% - LoseSize)
E = (30% x $1000) - (70% x $300)
E = (0.3 x $1000) - (0.7 x $300)
E = $90
*****************************
From Maths view the above is not VALID
You enter a trade what is the chances of it hitting $1000 profit and what is the chances of it hitting $300 stop loss
% of it hitting $1000 profit = 23.077%
% of it hitting $300 loss = 76.923%
To calculate a 30% vs 70%
30% to win $910
70% to loss $390
or
30% to lose $910
70% to win $390
Thus the above scernario after a 100 trades net position is 0 (excluding commission for simplicity)
thus back to my topic, from a mathetician points of view how do you increase the EDGE?