Has anyone lost their edge/system b/c too many people knew?

[bighog]

CHEESE., Great post for stroking ones own ego. Be sure to show that to the next bimbo you have over from the local trailer park.

NODOJI, Right on. Nothing else matters unless losses are controlled. Everyone is told that from day 1 but how many ever last long enough to realize it is the most important aspect of trading.

Truth be known, there is no such thing as "REVEALING YOUR SO CALLED EDGE". That is a myth and a sure sign of a rookie when they make such a silly statement in front of actual people, even if they are hiding behind their own keyboard brave as can be.

Another myth is that the mkt is always changing. The mkt is not changing because the players are all driven by innate characteristics we all are born with, fear and greed, fight or flight. Humans do not evolve at light speed at all, humans are still in the dark ages as far as changing innate skills. Computers still can not think, humans can. What else do you need to know?

just trade this stuff and do asnodoji says and you might have a fighting chance. Until then, PLEASE keep funding your accounts with your grocery money.

 

[college_trad3r]

It should depend on the simplicity of your edge whether it can be diminished.

If your edge is simply put, trend-following, it will never disappear. Likewise with countertrend trading. Trend and countertrends will always exists. Also support and resistance will always work, because it is so simple, it is based on greed and fear.

What edge you shouldn't give away are arbritage edges, since they have only a specific amount of money to offer.

 

[tradin4profits]

Quote from NoDoji:

Here's an edge nobody can manipulate or take away from you. It's the only edge that works in all markets, with any trading vehicle, using any account size:

Cut your losers quickly.

You enter a trade because you believe it will move profitably in your direction. If it doesn't move in your direction, that doesn't mean you were wrong; it simply means it didn't move in your direction. Get out and try again.

Excellent advice. Ever since I started doing that instead of thinking the stock would come back up I have been extremely profitable. Personally imo thats the best "edge" you can have.

 

[jack hershey]

Quote from xburbx:

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?

OP, et al:

The subject, losing edges, if and when so many people know is a myth of the Conventional Wisdom.

Finders fees are commonly paid to those who bring clients to people in need of capital. the wheeling dealing is done in an "edge" context. Thje turnover in this part of the industry occurs largely as client turnover occurs when clients move on to the next "edge" that whets their appetite.

There is no connection between edge performance and decision making of wealthy people trying to find a more lucrative place for their money. It is simply a sales job being done continually as the "musical chairs" continues.

Providers of "edges" are usually fee seekers for whom "edge" knowledge and skills are foreign and do not interfer with making a sale.

A second consideration is: where is the opportunity to make money in trading?" Larry Harris shows a heirarchy (pg 199) and by glancing at it you see the absence of locations that relate to edges in terms of nomenclature and function. This is probably because of Larry's orientation over his career (ex Head of SEC and Professor); he is oriented to reality.

Thirdly, it is possible to come to the fork in the road where the myth of edges goes one way and science goes the other way. By considering science instead of "edge" sales to wealthy or the heirarchy of trading in terms of nomenclature and function, you get to look at what is going on and the data that characterizes such. It is an enriching experience to go down the science oriented path.

An exciting intoduction is the contract that could arise between the non scientist and the scientist. There is no barganing; simply give the non scientist the rewards he suggests. While each may be peers in many things, the disadvantage of the nonscientist is what makes the deal so easy.

Others have made it clear that market size, in terms of its capitalization precludes external control in any way. If a person cannot conceive of this, that is fine. Not getting there intellectually just denies that person any significant success because of the fears he will take on personally as a consequence.

Trading scientifically should not be construed as an edge simply because thinking in edge terms is a myth and a poor substitute for intellectual involvement. Scientifically, I make it a standard to not trade anymore than a certain size block in an equity for high velocity money making (I restrict my attention to high velocity money making because it is there). similarly, in commodities I do not trade (intraday) at a volume larger than five times the market capacity. I will do three posts to include attachments for each of these. One for equities and one for intraday commodities. In each case there it is certainty that what is posted will work no matter how many people know. Anyone can claim this is not possible and those who do also, cannot prove their claim simply based on rational intellectual considerations, i. e., there is no proof possible that something will not work.

For equities, using a slected universe from RS and EPS considerations (IBD, nowadays, ranks equities using RS and EPS), use the leading indicator of price (volume) according to the rules midway down the page. Obviously this is all done using search ATS's to keep the Universe current and a simple ATS connected to a platform can do the trading during RTH. Early ATS's showed an average hold of 6.6 days and an average profit cycle of 11.1 percent per stream. A 100,000 share limit is appropriate and the ratio of partial fills to enter/exit is 20 to 30. trading at the T&S block size is the limit for the partial fill size. At 100,000 shares my best is a net of 17 points for a cycle; 4 1/2 hours were required to complete 31 partial fills to exit in that single stream of capital.

 

[jack hershey]

continued reply....

To continue the science theme relative to commodities, a simple PA formation will suffice. The approach is on the illustration lower right. Step five shows the reversal which could be used on a scalping level 40 to 60 times a day; on a traverse level 15 times a day; or on a trend level 4 to 7 times a day. With reference to the contract level, five times the capacity is a recommended limit. Ordinarily it is good to use a reference for the market’s offer during the day; I use the ATR and the multiple, depending upon the ATS efficiency and effectiveness, is 3 to 6 times the ATR.
When science is used a deductive process ensues and it is the opposite of induction which is the non scientific approach so common in sales and fee oriented “edge” offerings. Most induction is done by using “statistics” to prove something. Science oriented approaches devolve around information theory, on the other hand.
Information theory takes the scientist to the non probabilistic branch of information theory. Most people never open this door. If they do their personal history precludes following the path to where the rubber meets the road. Trading has a very narrow focus in markets; it can only be done in the Present. This limitation severely restricts the application of non probabilistic information theory. Intellectually, a person’s first recourse to his memory bank has few locations that serve his interest in trading skillfully. This is compounded by how perception works in sensing what is going on. An ATS does not have this problem but it is true that getting an ATS built does require a lot of sensing the get the picture.
The opportunity to trade markets in a scientific no edge myth setting boils down to the choice of always having certainty in the Present. To have this in the space involves looking at the trader/market partnership. Four things are involved and they operate in a circle where an order prevails and where, through repetition, growth of the partnership results. Where a person has been taking laps around the circle is not as important as coming into a trader/market partnership in the first place.
If the “edge myth” is in the space, there is no partnership or any potential for a partnership. The OP raising the question as done means the OP is not in partnership with the market.
At 90 degrees in the circle, a first event may happen. The market “Tells”. The trader is always at choice. He may “accept” the tells. Accepting can be looked up but briefly it means “taking the tell at face value”. By not dialoguing, debating or anything else, accepting creates a connection between the market and the trader. Go through 180 degrees and put “accepting” at 270 degrees. Interject a new thing that appears in the circle from 315 degrees going into the middle. Name it Trust. Trust comes from the trader accepting tells of the market. In information theory the trader can choose to take tells in a go/no go form; this creates certainty at all times.
If everyone did this, the value of the tells being accepted would not diminish or go away. This is the seed of the thread topic. Put at the top of the circle, “value”.
Go around the circle fifty times and see what grows. Acceptance, Trust and value grows. Were more and more people to join in this process, then the market Tells would simply be understood by more people. By using certainty as a requirement, the trader simply gains advantage. He is certain of each item he adds to his sensory process to give him perception. Sensing is only 10 percent of perception; inference is 90% and comes from long term memory as the person’s first recourse when summing memory.
The sale to a potential client of a fund results in a fee to the finder who employed the “edges” of the fund as a hook. The client “senses” the edge and has a perception of it. 90% of his perception comes from the inference of his long term memory. Tells are debated and argued successfully and no Trust comes as a consequence. Value is supplied to the client in dollars and not information. Satisfaction is not the problem of the finder; satisfaction comes from passive inference.
The attachment deals in several binary events where a go/no go is used in each step. Step five causes a reversal. The next post takes the reversal down to a tic level so the bid ask pairs can be seen as well. Obviously an ATS has many filters and much gating to get this series of steps to work on various fractal of trading. What is common to everything is that the trader/market partnership is based on Trust and the value of the relationship and the Tells from the market grows with time.
What causes price changes to occur is NOT more and more people doing the same thing. The market’s operation is counterintuitive. At some point, through repetition, the trader learns from the market what causes price to change, especially if he is able to view the market and more, especially, if his mind has been built to have a long term memory first recourse that is coincident with what the market does. His ATS will have this as well by this time.
How is the edge myth affected by this growth of the trader/market partnership? A lot of myths are known to expert traders. They are treated as myths because the myths do not come from market Tells. The grown mature partnership is orthogonal to the edge myth. The illustration is just an example of a market turn on any of many nested fractals. The chosen fractal is traded go/no go in the elements of the data set Tells from the market. A simple consequence is that the trader is always in the market and always on the right side of the market. When change occurs the trader takes a profit segment and simultaneously begins another. Those following myths can “feel” their circumstance. They split their market time into two parts: sidelining and being “in”. The feeling is oft recorded by its practitioners: anxiety, fear and anger. All of these incoherent things come from absence of trust.
The definition of coherence is “partnership”; mature partnership is the end result of the circle being done repeatedly in an orientation: Tells, acceptance, Trust and value.
Thinking about having an edge is incoherent. Edges are myths.

 

[jack hershey]

continued reply..

This illustration is done on a One Tic Range chart. Here you see the BBidBask pairs working during the HH. The illustration was kindly posted by Charts initially. thanks so much.

as seen bar 1 ends and bar 2 begins. when the open of bar 2 is passed by the bar 2 expansion going in the new sentiment direction, the reversal is taken to "stay" on the right side of the market and "stay" in the market as a partner becuase the partnership is established.

By just usubg "tells" from the market that are non probabilistic in information theory and are limited to "certainty" provided by their go/no go nature, a person is able to continually take the market's offer.

Continually taking the market's offer is a high money velocity trading style for any chosen fractal.

It is part and parcel of the financial industry to be oriented to fees and sales of "products" created by sales driven organizations. One of the myths created along this path was that of the edge. Read marketsurfer to explore this attitude and mythical basis for making fees by influencing people needing to place capital in places where the capital may be able to earn somthing.

 

[NoDoji]

Quote from Currywurst:

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.

It's taken me quite a while to learn this is indeed the biggest edge of all.

And if you'd like some backup to this, check out this journal:
http://www.elitetrader.com/vb/showthread.php?s=&postid=2358234#post2358234

What is a loser? A trade that moves against you. Might the trade that moves against you eventually move in your favor? Yes. But why draw down your account when you can exit quickly and enter again later?

What is a winner? A trade that moves in your favor. Might it reverse and become a loser? Yes, so lock in some profit and see how far it might go.

 

[jack hershey]

Quote from bighog:

CHEESE., Great post for stroking ones own ego. Be sure to show that to the next bimbo you have over from the local trailer park.

NODOJI, Right on. Nothing else matters unless losses are controlled. Everyone is told that from day 1 but how many ever last long enough to realize it is the most important aspect of trading.

Truth be known, there is no such thing as "REVEALING YOUR SO CALLED EDGE". That is a myth and a sure sign of a rookie when they make such a silly statement in front of actual people, even if they are hiding behind their own keyboard brave as can be.

Another myth is that the mkt is always changing. The mkt is not changing because the players are all driven by innate characteristics we all are born with, fear and greed, fight or flight. Humans do not evolve at light speed at all, humans are still in the dark ages as far as changing innate skills. Computers still can not think, humans can. What else do you need to know?

this is a very interesting post. It scopes and bounds trader/market limits in the incohererent realm.

Search fight or flight especially physiologically and in terms of brain function. In terms of bodily organs at least five major arreas are part of the "survival response function.

In the extreme two conditions are worthy of thorough searches:

1. The Lizard Syndrome, and
2. the Bohr Effect.

In market parlance and phenomena, the Lizard Syndrome is a survival tactic based on "freezing up" when risk is very high. The lizard survives because he is thought to be dead. Trader freeze up is shown most commonly by three humorous occurances both of which are totally irrational in terms of making money.

1. The early exit where the trader cannot continue to hold as price change makes more money for him. he freezes to the sidelines to recover from the stress.

2. Holding through the peak of the price move (at peaking volume as well) and simply watching beig stopped out at a loss.


3. Tthe humor of going past (after reversing price direction) the entry price while watching the "wash trade" disappear is not quite as funny as seeing the stop hit while mobilized.

The Bohr Effect is cummulative over time. The brain needs a 100% oxygen supply. The stress of fight or flight is a no win for the Bohr Effect. Fight is stress. Flight is stress. Poor bighog.

the oxygen drops lower and lower as the trader persists in being stressed. It can reach a 50% level. Image trying to rune an engine on a 50% oxygen supple. Bighog doesn't have to imagine noe does the reader. simply read bighog's posts to see it in action.

These two forms of incoherence often combine. the effect on the brain of 50% oxygen is not easily recovered from simple as a manner of fact in how the soft tissue damage is actually killing the celular structure of the brain.

What happens when the brain is falling apart by being damaged? Again read about it as in a novel by starting at the beginning of an ET member's posting. also read up on the causal factors of OCD. There you find out that something in the brain is supposed to top firing after a short period once the brain has moved to a preservation or survival status. BUT the firing of neurons doesn't stop simply because the brain is now busted as a consequence of st5ress damage. Again reading a person's posts as he goes through this transition is a very effective way to takestock on not getting into the same trouble he has given himself.

When does fight or flight take big enough toll to extinguish the trader's career. you can see that by making a graph of the ET gross membership and the active status of that membership. you get a look at the ET turnover rate for fight or flight.

Searching incoherence brings you to its measurable characteristics. It sits at one end of a spectrum where fight or flight also sit. What are the healthy opposites of incoherence and fight or flight? As you read you find out.

Trust is the biggy that comes into the picture. Expereincing coherence is a terrific idea. By all means do it so you know what it is like when you experience it trading. The easy way to experience coherence is to meditate. The measure the spectrum simply attach yourself to your computer and look at the display that appears on several levels. Getting away from fight or flight is a requirement for the health of your brain and most of your internal organs. If you don't you are f*cked like those I referenced.

Knowing edges are a myth does not change where you are in the stress world.

Look at the fighter pilot algorithm developed by John Botd and impressed upon traders who can afford him, brett Steinbarger. OODA is a stress creating disaster. Why would any person want to become a fighter pilot during RTH? Obviously to behave like bighog who thinks trading has the myth of competition associated with it.

What is it like to go to a coherent relationship with the markets? How does trading just parallel meditation all the time during RTH? There is an expression:"knowing that you know". There are some terrific books on how we work and function. for sure, having all this knowledge and practising it while having expert trading skills, simply turns the fight or flight or OODA , et al into a huge pool of humor.

Stress, brain damage, etc provides an endless supply of youtube humor. All the movies on trading and wall street incorporate the humor of stress, fight or flight and OODA. All the myths are there as well.

Going around the circle I mentioned is like meditating while in a pertnership with the market. What does it take to understand that the market is always right and , therefore, there is no reason to not partner and always stay on the right side of the market and always stay in the market during rth? abviously bighog will never have the experience. He is mostly on the sidelines recovering form fight or flight symptoms. It is ver funny to see his eternal plight that is killing his brain day after day.






]

 

[jonnyy40]

Instead of following 'Obi-wan',just get tasered and sound like Chewbacca.


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[bighog]

This man found his edge. His edge is the "TRUTH", truth in yourself and "TRUTH" in what you are doing .

http://money.cnn.com/2009/03/18/news/economy/okeefe_bridgewater.fortune/index.htm

Been watching Band of Brothers again: Formula 1 race season starts next weekend and the Belgium race is in the Ardennes forest. Battle of the Bulge, back to Roman wars etc were fought in the area. Another example of the truth: the guy said to captain Winters..."Looks like you guys will be surrounded" captain Winters relpys...."we are paratroopers, we are supposed to be surrounded".