There was no flaming. The OP asked a question, I told him what I saw. I also said the reality of trying to mimic large institutions was unlikely.
Several of the followon responses were rather naive.
Hedge Fund Strategies
- Thread starter dima777
- Start date
There was no flaming. The OP asked a question, I told him what I saw. I also said the reality of trying to mimic large institutions was unlikely.
Several of the followon responses were rather naive.
Why are people asking this TraderZones clown for advice on a profitable trading strategy?!?!?!? Do people actually believe TZ knows what ANY hedgefund out there actually does? 
Onto something in this thread collectively, but it would take awhile to figure out how to use statistics in a strategy. Don't ask, don't tell, is how I'd intepret the question. If you're curious what the results look like, I think my system is a perfect example of what's been talked about here.
Dima777,
No, it is as Dubes said, relative value. For example, this is a trade a lot of hedgefunds had on long GS, short LEH (or MER or MS or BSC) is a simple example or it could have been +1GS -2LEH +1MER. With positions such as these it is not direction of the stock market or the specific stock it is the "relative value" or the spread price that you are trading. With these spreads you could put many diffrent legs on and weight the legs diffrently also. And then they have strategies to how they go about creating those positions.
To my knowledge a great deal of hedge fund trading is some form of spread trading based on diffrent forms of statistical analysis.
Another one would be the price of a commodity and how it correlates to a companies earnings. When you start thinking about it you can come up with lots of ideas but also markets are very efficient so it is not quite that simple. You still have to figure out how to put the trade on. It is no problem when trying to put a position on that is like 20,000 shares but hedge funds trade with a lot of money so it makes it a bit more complicated.