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

[spindr0]

Quote from NoDoji:

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

People can argue whether it's an edge or not but if you don't learn to do it, it's hard to succeed.

 

[spindr0]

Quote from 1a2b3cppp:

i heard MACD used to work

I think it was a big edge for Gerald Appel (and selling books).

 

[ivanbaj]

I think there are 1 gazillion and 5 ways to trade which approximately matches the number of traders.

Your system is safe.

 

[spindr0]

Quote from slapshot:

This is not an edge, it is just a coin-toss gamble on volatility.

Yep, based on what I wrote so far, I suppose that could be true. But if you put it in the context of a hedged system with intraday bias that utilizes pairs trading and regression to the mean, it removes the coin-toss component. And as I said in a previous post, debating whether it's an edge or not is for you and others. Call it what you may - it has produced consistent good returns for me for 10 months and I have no complaints.

 

[nokomisjeff]

I have a personal blog with a decent number of readers, but absolutely refuse to give anything away. I might discuss everything about trading, but will not give trades, my systems, patterns, etc away. One reader, who claimed to be a successful daytrader, got pissed off at me when I mentioned the fact that I had found a pattern in the euro. He wanted the pattern, and when I told him that I wouldn't give it away, got really pissed. Here's a link to the exchange for your entertainment.

Check out the comments.

http://masteroftheuniverse.wordpress.com/2008/11/19/grain-market-blues/

Sometimes, people just want to be told what to think, when to think, and how to act. In other words, they want something for nothing.

Jeff

 

[Specterx]

Quote from 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.

What's interesting about this is that trends, support/resistance etc. can be viewed as "arbitrage edges." Price movements are a function of buying and selling aggressiveness, and these can and do diverge from fundamental demand. When you buy support looking for price to rise, what you're doing is arbing the difference between the current price and where the price should be, because you believe that fundamental demand in the market has increased at this new price level - even though price has recently been flat or falling.

Obviously I know this isn't what you mean when you talk about arb edges, but support and resistance bend and break all the time. If you've found a way to determine which ones will hold and which ones won't, that's certainly an edge that could get smoothed away.

 

[Pekelo]

I don't think anybody has mentioned yet but giving away an edge can actually strengthen the idea.

Let's say double bottom with RSI divergence. The more people use it to go long, the better it works. So it is a fallacy to think that more people using the same strategy automaticly destroys it...

 

[spindr0]

Quote from Pekelo:

Let's say double bottom with RSI divergence. The more people use it to go long, the better it works. So it is a fallacy to think that more people using the same strategy automaticly destroys it...

Isn't that more of a self fulfilling prophecy where you just have more peeps chasing the same pattern?

 

[spindr0]

Holy crap. Where does that Jack Hershey guy find the time to write those book-length responses? Does anybody actually read all that stuff? :eek:

Hey! You stole my thoughts! Give em back!!!

 

[Specterx]

Quote from Pekelo:

I don't think anybody has mentioned yet but giving away an edge can actually strengthen the idea.

Let's say double bottom with RSI divergence. The more people use it to go long, the better it works. So it is a fallacy to think that more people using the same strategy automaticly destroys it...

This isn't so. Just think about it: as more people crowd into the trade and try to get long on the same signal, the bounce becomes sharper and the divergence becomes less pronounced. You'll increasingly have to compromise waiting for a strong signal vs. getting filled on the trade. As volume competes for places in line your double bottom becomes a higher low, and now maybe somebody who wants to sell will wait and fade your ass because he knows this sharp but unsustainable bounce is coming, and so on.