Does market profile system have the potential for generating good retruns ?

[MrMuppet]

Common, really ... after this long bull market!? So how exactly the big boys make money with billions under management? Scalping?

The biggest firms issue ETFs for the public to do the "trendfollowing", the rest is relative value. Fixed income arb, merger arb, basis trading, cash&carry, long/short aka. pairs trading, stat arb, correlation and dispersion trading and what not.

The "big guys with billions" or how you call them are pension funds and other whales that are heavily restricted in what they can actually do. In the end they can buy stocks, bonds or stay in cash. But these guys arent actually generating alpha, they are just fee hovers so they don't count.

The guys who are betting on big moves are the global macro dudes and they trade with information edge.
I don't think there is any CTA left who just buys new 20d highs and rides it like the turtles did. Autocorrelation is mostly gone.

 

[ironchef]

So if we only have shovels why not dig in the same place as the excavator ? I mean why not follow the trend which the big boys are following.

This is also one of the main tenets of market profile. Market goes like this
Balance ---> Imbalance ----> Balance.

You need to identify it.

Thank you. Yes I should look at market profile system first before commenting. My bad.

Talking about excavator and shovel. Buffett bought 5% of AAPL within a short period. I trade AAPL options. I love to dig when he dig but had no clue when he bought. You would think a 250 millions shares of extra demand should create an imbalance?

Regards,

 

[golfdude]

The biggest firms issue ETFs for the public to do the "trendfollowing", the rest is relative value. Fixed income arb, merger arb, basis trading, cash&carry, long/short aka. pairs trading, stat arb, correlation and dispersion trading and what not.

The "big guys with billions" or how you call them are pension funds and other whales that are heavily restricted in what they can actually do. In the end they can buy stocks, bonds or stay in cash. But these guys arent actually generating alpha, they are just fee hovers so they don't count.

The guys who are betting on big moves are the global macro dudes and they trade with information edge.
I don't think there is any CTA left who just buys new 20d highs and rides it like the turtles did. Autocorrelation is mostly gone.

Off topic. There is a trendfollowing strategy you can do in commodities because commodities have strong autocorrelation. Right now only 10% of the entire commodities trading strategies is TF. So there is some juice left.

 

[Variss]

I can say that there is no one analysis that fits all traders. We should keep on mind that those technical’s are based on stats and maths, so trader need to have excellent understanding of what calculations are involved behind the outputted signals. Data series time frame is also important to consider