Hi,
This might be a little off-topic, but I wanted to add something about acrary's comment. I learned so many things from his posts, and I like to think that he would have been pleased to know that many traders were enlightened by him and continue to carry on.
The way I see it, acrary's methods are very, very fine in sense that it is scientific(possibility of test/refute/accept), and in general turns out to be acceptable. We should not throw away ideas if they turns out to be acceptable, probabilistic truth(and what kind of truth is not probabilistic?)
IMO, the thing he really wanted to say(to the other traders) is summarized by this:
"I would trade 100% strategic and 0% tactical. By this, I mean I would diversify simple trading styles like trend, countertrend and rangebound over time and markets. I wasted too much time and effort on when to buy and when to sell. My time would've been better served asking; "should I be long, short, or flat?", for the simple strategies in multiple timeframes and markets.
Rather than compounding I would add more timeframes or markets to build the account while continually lowering the overall risk."
acrary's methods of exploiting edge is tactical. He finds and exploits these edges, then use correlation to win the war by winning little battles everywhere and making those battles count.
Now, by being 100% strategic, you don't focus on winning little battles; you want to win the battles that count most, that could tip the scale and make you winner or loser. Other insignificant battles, you don't have to win, you don't have to focus as much.
Put in a simple example it's like this: you could be a scalper who can turn 80% of daily range into profit, or you could identify day's direction and just long/short around open. Here the scalper has more advantage because he can turn 80% of daily range to profit no matter the direction, whereas the ORB player can go wrong direction and cost him some profit.
But the point is, to be 80% scalper you have to put much, much more effort into this than just trying to be ORB player. Acrary found that he belongs to '80% scalper' in the above example; yes, he has been profitable, but reward to effort is much less than the other approach. Even worse, in his case the reward for both approach is the same, therefore relative loss for him even though he gets audited every year.
In the end, he had his view of the market, and he was right on what he saw, but there were other side of the market that he did not see. I'm very humbled and somewhat inexplicably saddened by his admission... But, I think this is a great news for us.
Even with limited view of the market he managed to earn a fortune. Think what you can do now! It'll be like the best of Warren Buffet and James Simons combined
or something like that, you get the idea: less correlated methods combined.
And I'm sure acrary has gotten his stuff together again, this time much more efficient than before.
