If it never dissapears,its most likely not a true edge..
And Prudent Risk Management is not an edge,it's a requirement...
And Prudent Risk Management is not an edge,it's a requirement...
How does a edge disappear?
- Thread starter OneQuickNut
- Start date
It's the only true edge.
All fine systematic edges, I found within my 15 years testing and develeoping, with Sharpe >3 did disappear within 1 year. Not long enough to get rich from starting small. They were 100% systematic. So I guess all kind of fully systematic edges have a short lifetime span.
If you want to have longterm consistency trade discretionary as much as you can, because then it is too hard to replicate it and thus your edge should last much longer. But of course you need to adapt over time within your discretionary framework. There is a study I can attach as proof where a good discretionary trader is even turning a non-profitable systematic strategy into Sharpe 2 result, when traded this strat on his own discretionary. That is the way to go, to keep your edge as long as possible alive.
If you want to have longterm consistency trade discretionary as much as you can, because then it is too hard to replicate it and thus your edge should last much longer. But of course you need to adapt over time within your discretionary framework. There is a study I can attach as proof where a good discretionary trader is even turning a non-profitable systematic strategy into Sharpe 2 result, when traded this strat on his own discretionary. That is the way to go, to keep your edge as long as possible alive.
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There are ways to gain edge but they arent available for most retail traders to exploit.
I saw a video on here that explained how a hedge fund sent in 2 opposite orders to the exchange with missing TCP/IP header information prior to that particular news event - which essentially reserved the orders spot in the queue but did not get filled due to missing information. But then as soon as the news event hit, the order that was desired to go through was corrected at the network packet level while the opposite order was either left incomplete or cancelled.
I saw a video on here that explained how a hedge fund sent in 2 opposite orders to the exchange with missing TCP/IP header information prior to that particular news event - which essentially reserved the orders spot in the queue but did not get filled due to missing information. But then as soon as the news event hit, the order that was desired to go through was corrected at the network packet level while the opposite order was either left incomplete or cancelled.