I read somewhere that trading books have caused possibly the largest wealth transfer in history. Boy, were they right. I have self taught myself technical analysis, fundamental analysis and price action. I have read hundreds of books on the subject. And over the years of trading NONE of them have been even close to profitable. Their only edge is that they just happen to time their trades in either strong bull or bear markets.
Believe me I have backtested countless strategies from candlesticks to MACDs to price action to FX correlations to Presidential Elections to Order book correlations to even solar and lunar cycles at one point. And guess what. None of them give you any kind of edge whatsoever because that information is already public and whoever disclosed it in the first place is probably rich by now with his or her book sales.
correlations that occur are only temporary. Quants and Hedge funds try to scalp this inefficiency. But even then, this can never be a consistently profitable strategy as competition increases to try to capitalize on this inefficiency. Eventually, this inefficiency is simply evaporated. And oh look: Hedge funds are dropping like flies if you read the news now because of so much competition. The market can stay irrational for longer than you can stay liquid. And those who can stay liquid already have a ton of capital to win through sheer trial and error alone. Thats why 99% of retail traders consistently fail. They just don’t have the capital to win through trial and error.
As a closing statement, I would like to reveal a little secret. If you buy today and sell tomorrow, you have a 50/50 chance it will either go up or down. This is true for virtually every stock, index or forex out there. Go ahead and backtest it yourself if you want. (Boy, are those 1% of profitable traders laughing their guts out right now!)
Now that I look back, if I just followed the buy and hold strategy with most of my trades I would have been a millionaire within 5 years.
Believe me I have backtested countless strategies from candlesticks to MACDs to price action to FX correlations to Presidential Elections to Order book correlations to even solar and lunar cycles at one point. And guess what. None of them give you any kind of edge whatsoever because that information is already public and whoever disclosed it in the first place is probably rich by now with his or her book sales.
correlations that occur are only temporary. Quants and Hedge funds try to scalp this inefficiency. But even then, this can never be a consistently profitable strategy as competition increases to try to capitalize on this inefficiency. Eventually, this inefficiency is simply evaporated. And oh look: Hedge funds are dropping like flies if you read the news now because of so much competition. The market can stay irrational for longer than you can stay liquid. And those who can stay liquid already have a ton of capital to win through sheer trial and error alone. Thats why 99% of retail traders consistently fail. They just don’t have the capital to win through trial and error.
As a closing statement, I would like to reveal a little secret. If you buy today and sell tomorrow, you have a 50/50 chance it will either go up or down. This is true for virtually every stock, index or forex out there. Go ahead and backtest it yourself if you want. (Boy, are those 1% of profitable traders laughing their guts out right now!)
Now that I look back, if I just followed the buy and hold strategy with most of my trades I would have been a millionaire within 5 years.
