No one on EliteTrader will beat the market… here is why

The effecient market hypothesis has to be the most iron clad theory in the social sciences....no one is ever going to disprove the theory as far as winning a noble prize for their research...
When someone finds a way to refute this absurd theory, they exploit their own theory in the financial markets...No rational agent would ever do anything other than that..
It doesn't take much more than a gloss over of academic economics research papers to get the feeling that its a bunch of virgins making up theories on sexual performance..
Real economics research at this point is what is being done behind the closed doors of guys like Jim Simmon's boys...they aren't and will never be publishing though.
 
Quote from jdeezero05:

The effecient market hypothesis has to be the most iron clad theory in the social sciences....no one is ever going to disprove the theory as far as winning a noble prize for their research...
When someone finds a way to refute this absurd theory, they exploit their own theory in the financial markets...No rational agent would ever do anything other than that..
It doesn't take much more than a gloss over of academic economics research papers to get the feeling that its a bunch of virgins making up theories on sexual performance..
Real economics research at this point is what is being done behind the closed doors of guys like Jim Simmon's boys...they aren't and will never be publishing though.
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Stayed tuned . . .
 
I'm skeptical of your post.

There are 3 forms of the efficient market hypothesis and you're referring only to the "strong" form. Most academics agree that it is the "semi-strong" form that better reflects reality.

Besides, if markets were totally efficient how do you explain the January effect? The Monday/Friday/Weekend effect? How do you explain the "Surpise Earnings" effect where up to 60% of gains in a stock can be realized in the 3 months after the surprise earnings are announced.
 
If there was no added value to research then there'd be no need for insider trading laws, eh?

Would you argue that if I knew the earnings beforehand of a few dozen stocks that I wouldn't out perform the index? Did Dennis Levine outperform? Boesky? Random luck? Hardly. And as much as I think him a tool-Buffet until his new found affliction from hubris wasn't random either. Nor Bill O'Neil. Nor probably quite a few swing traders or investors on ET.

Price is the point spread. Yes it's efficient. To a degree. Obviously in a high volatility environment it's hard to argue each price point is agreed upon value but by and large the the last print on the ticker and odds in a horse race properly reflect market sentiment at that moment. It's fallacious though to extrapolate from the efficiancy argument that some participants do not have superior knowledge of future valuations. Apples and oranges argument.
 
Quote from GTS:

Without responding to the rest of your original post, the above part stood out for me...you seem to be assuming that stock/equity futures traders only trade on the long side - an obvious false assumption. Did I misunderstand you?
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They certainly trade both sides. But since there is a long term economic trend which is up (+8% a year on average), the larger part of trading profits will naturally come from long trades. Of course you can trade the short side in a bull market and make money, but not as much as if you traded more from the long side. You simply have a little bit of tail wind being on the long side.
 
Quote from neutrino:

They certainly trade both sides. But since there is a long term economic trend which is up (+8% a year on average), the larger part of trading profits will naturally come from long trades. Of course you can trade the short side in a bull market and make money, but not as much as if you traded more from the long side. You simply have a little bit of tail wind being on the long side.
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You stated that an equity trader would yield 8%/yr on average presumably because that is the average yearly market index gain.

Based on your premise, the only way that someone would average gains equal to the market is if they were only long the market.

Taking this to its logical conclusion, someone that traded only short would lose on average 8% per year (according to you).

Someone that did a mix of long and short then they would fall somewhere in the middle of that range, they would not yield 8%. This is basic math.
 
My guess would be that 95% of crack addicts fail to quit and go on to live a healthy lifestyle. I would also hazard a guess that 95% of obese people fail to stick to a diet and exercise regime for the rest of their lifes.

Being patient and disciplined in the markets (especially when you have no one holding your hand and have no promisses that your success will last) goes against human nature. It's a very hard thing to do and it's no surprise that 95% can't do it.

I don't even know what my edge is (although I am to believe that if I don't know what my edge is I don't have one)! All I know is that if I am strict with keeping losers small and letting winners run I net out profits.
 
Quote from Pa(b)st Prime:

If there was no added value to research then there'd be no need for insider trading laws, eh?

Would you argue that if I knew the earnings beforehand of a few dozen stocks that I wouldn't out perform the index? Did Dennis Levine outperform? Boesky? Random luck? Hardly. And as much as I think him a tool-Buffet until his new found affliction from hubris wasn't random either. Nor Bill O'Neil. Nor probably quite a few swing traders or investors on ET.

Price is the point spread. Yes it's efficient. To a degree. Obviously in a high volatility environment it's hard to argue each price point is agreed upon value but by and large the the last print on the ticker and odds in a horse race properly reflect market sentiment at that moment. It's fallacious though to extrapolate from the efficiancy argument that some participants do not have superior knowledge of future valuations. Apples and oranges argument.
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If some participants have some knowledge of the future price or odds, and it is legal to trade on that knowledge, then it will already be reflected in the price if there were a huge number of participants in the market. If however it is illegal, then yes, their knowledge will not be reflected in the price, but the price will still be fair because no one is allowed to use that knowledge.
 
Quote from neutrino:

They certainly trade both sides. But since there is a long term economic trend which is up (+8% a year on average), the larger part of trading profits will naturally come from long trades. Of course you can trade the short side in a bull market and make money, but not as much as if you traded more from the long side. You simply have a little bit of tail wind being on the long side.
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so let me guess....you got your ass handed to your in the bear market because you were so used to going long and buying pullbacks and couldn't adjust...does this sound about right?
 
Quote from robbie380:

so let me guess....you got your ass handed to your in the bear market because you were so used to going long and buying pullbacks and couldn't adjust...does this sound about right?
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No, I try to trade in the direction of the primary trend in whatever time frame I am watching. Of course there are always opportunities to fade some moves in the smaller time frames but that's not a basic strategy I use.
 
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