Has anyone lost their edge/system b/c too many people knew?
- Thread starter xburbx
- Start date
you can start with this http://www.elitetrader.com/vb/searc...=2878584&sortby=lastpost&sortorder=descending
i know some guys that did it. most washed out and have nothing now. others went on to bigger and better things
Ah, therein lies a clue to trading succeesfully. You might find the FAILURE of such well-known patterns as Double-tops/bottoms and head-and-shoulders to be more reliable than the original patterns themselves.
Sure, those big patterns work well sometimes (enough to pull a lot of people in), but when they fail, they fail more reliably than they succeed. Think about why that may be true, and you may be on to something.
I can easily imagine that many "edges" erode over time - those based on patterns, or stat arbitrage, or some kind of random mathematical anomaly in the MA/MACD cross category. It would happen all the faster if all 200 people in your prop firm suddenly started tossing millions of shares at it.
I think more fundamental edges may wax and wane in effectiveness with changing market conditions, but they will always exist. Just a matter of whether the trader can adapt.
I think more fundamental edges may wax and wane in effectiveness with changing market conditions, but they will always exist. Just a matter of whether the trader can adapt.
IMHO, the notion that too many people get on a system and then it loses its edge is a joke. This is one of the biggest myths in trading.
No two systems are exactly alike in all aspects. There are millions of traders, therefore multiple millions (if not billions) of trades put on every day/hour/minute. These systems are modified constantly and optimized/tweaked and not followed completely.
Besides, no piker trading system is going to move liquid markets for more than a second even if hundreds of other people actually folllowed it to the letter.
I believe that people who cry "too many others are doing it now" are displaying a serious victim mentality, the battle cry of the Loser.
It is more likely that their system was over-optimized for a particular chunk of market time, then market characteristics changed. Their trending system fails in a rangebound market, or their pivot system fails in a trending market.
Just my .02
The formulae and methodologies of hedge funds, institutions and major players are usually closely guarded. This is a long tradition of self interest. Secrecy is a convention I am used to and the methodologies I have developed will also be kept as secret as I can manage.
Of course you will see plenty of my posts which set out the approach and principles to extract major money intraday from markets. There is always room for a few more to join the very restricted numbers of individuals who make themselves rich from the markets. However it is the detail which I do not divulge. There is much more sophistication and effective fine tuning in professional playing which usually does not arise at all in ET threads because this is a site for amateurs.
The few systems of trading which have been promoted on ET amid much controversy are unworkable or insufficient. Not surprisingly they are cumbersome and have never provided proof of sustainable or consistent success.
Of course you will see plenty of my posts which set out the approach and principles to extract major money intraday from markets. There is always room for a few more to join the very restricted numbers of individuals who make themselves rich from the markets. However it is the detail which I do not divulge. There is much more sophistication and effective fine tuning in professional playing which usually does not arise at all in ET threads because this is a site for amateurs.
The few systems of trading which have been promoted on ET amid much controversy are unworkable or insufficient. Not surprisingly they are cumbersome and have never provided proof of sustainable or consistent success.
It depends how deeply liquid the market is.
Most markets are not as liquid as ES or ZF.
I have systems that works on most markets, and in back testing they even work on most illiquid markets, but if i try to use it on a market like GC (gold), even with 1 lot most of the edge goes as other people sometimes want to buy or sell at the same time as me and the skid can be massive (50+ ticks sometimes).
Im not saying these people are using the exact same edge as me but that market does not seem to be able to cope even now let alone if i tell the world about my exact entry rules and invite even more competition.
Most markets are not as liquid as ES or ZF.
I have systems that works on most markets, and in back testing they even work on most illiquid markets, but if i try to use it on a market like GC (gold), even with 1 lot most of the edge goes as other people sometimes want to buy or sell at the same time as me and the skid can be massive (50+ ticks sometimes).
Im not saying these people are using the exact same edge as me but that market does not seem to be able to cope even now let alone if i tell the world about my exact entry rules and invite even more competition.