It seems like people are split on the answer. Something else to throw in the mix in regards to the comment of millions of traders is that the majority of the market is moved by institutions and large buyers/sellers which would drastically reduce that number. Is there a concern that your edge would be taken by enough of those players?
Has anyone lost their edge/system b/c too many people knew?
- Thread starter xburbx
- Start date
If your trading style is extremely gimmicky and based on some simple scam/trick that works over and over again it is obvious that sharing it can/will impact it. Most those types of trades will only have a few thousand shares available, and if someone learns about your edge who is quicker than you, you'll only get the fills when the trade doesn't work as well. The more your style is constantly adaptive and multi dimensional, no one can precisely rip you off because you're not basing your trades on one gimmick.
The Millenium strategy was very gimmicky and hence when it got out, the edge was reduced drastically; more risk had to be taken for less reward, and so many people were doing it that getting the good stock at the right times became competitive and the algos which were previously giving out free money began to adapt.
The Millenium strategy was very gimmicky and hence when it got out, the edge was reduced drastically; more risk had to be taken for less reward, and so many people were doing it that getting the good stock at the right times became competitive and the algos which were previously giving out free money began to adapt.
The most exploitable 'copy-cat' trade is a very specific arbitrage tactic. More players and capital dilutes that trade very quickly. I have a friend who made $4M very quickly in the early '90s on a specific Yen currency basis arbitrage trade - and when the banks caught wind of it, the edge disappeared. Another friend made big money very quickly in the '80s on a Muni Bond futures basis spread that disappeared once the exchange caught wind of it and changed the delivery specifications in the futures contract. Very specific and exploitable examples.
Unfortunately, I have yet to luck into such an arbitrage. The good news for me is that I have refined a spread trading system over the years that allows me to look for the best setups in any number of instruments and sectors. I don't have FU money, but I have been able to make a very good living consistently year in and year out. For example, in the late '90s I did well spreading the Bund, Bobl, and Shatz. In the early 2000's I was able to incorporate the Euribor and Gilt into the trade. I have done the same for the Eurodollars and the CBOT 2, 5, and 10-Year Notes.
Many inter and intra-market spread combinations.
I spread Equities with ETFs and the ES and NQ futures. I have a gazillion different energy futures trades I do with ICE and Nymex. That is the huge strength with spread trading - it withstands the test of time and is applicable to many different markets and combinations.
I have agreed with my family to cut down my trading to two days per week in order to spend time during market hours with my daughter and her medical needs. My wife has a career with IBM, and the medical insurance is with her. I am going to offset a little of the income by coaching traders in the evenings on my upcoming website 'SpreadProfessor.com' if anybody might be interested. I have started on website construction this weekend.
Bone
Unfortunately, I have yet to luck into such an arbitrage. The good news for me is that I have refined a spread trading system over the years that allows me to look for the best setups in any number of instruments and sectors. I don't have FU money, but I have been able to make a very good living consistently year in and year out. For example, in the late '90s I did well spreading the Bund, Bobl, and Shatz. In the early 2000's I was able to incorporate the Euribor and Gilt into the trade. I have done the same for the Eurodollars and the CBOT 2, 5, and 10-Year Notes.
Many inter and intra-market spread combinations.
I spread Equities with ETFs and the ES and NQ futures. I have a gazillion different energy futures trades I do with ICE and Nymex. That is the huge strength with spread trading - it withstands the test of time and is applicable to many different markets and combinations.
I have agreed with my family to cut down my trading to two days per week in order to spend time during market hours with my daughter and her medical needs. My wife has a career with IBM, and the medical insurance is with her. I am going to offset a little of the income by coaching traders in the evenings on my upcoming website 'SpreadProfessor.com' if anybody might be interested. I have started on website construction this weekend.
Bone
That's not an edge. At all.
Let's judge the empirical evidence. The poster who you are responding to hasn't had a down day this month. It is highly unlikely that a trader can have this type of performance without knowing what an 'edge' is.
There's no doubt that he might have an edge. But it's not as simple as "cutting losers short".
The key is: Where is your entry ? What is a loser, what is a winner ? If you cut your losers short, how far do you let your winners run ? THAT is his edge.
Simply cutting losses short without knowing what you do is not an edge at all. If it would be, I could simply write a mechanical system.
The person in question said nothing about not 'knowing what you are doing' stops. Judging by her trading record, I gotta think that the edge in question is real and based on rational analysis. The explanation lacked detail, but certainly wasn't based upon a falsehood.
Perhaps you could re-examine how stops are utilized in your trading, as a means to increasing your positive expectancy.