Old edges

Quote from mastertrader456:

I do agree with HYDROBLUNT, love the name by the way, that back in the day you could trip and find money in the market. The edge was that good back then. Once those edges dried up the only ones that survived were the real traders who had discipline.
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Frankly, there is nothing exciting or interesting about trading with no edges on discipline. money management & risk management alone. Real money is made by exploiting edges & opportunity.
 
Quote from kut2k2:

Position sizing is worthless without a positive-expectation strategy.

And trend trading ALWAYS works, at least in the aggregate. The trick is to look beyond drag-ass strategies like the turtle strategy. You have to be both quick like the hare and consistent like the tortoise to win the race these days. It's still doable, it's just a bit harder than the glory days of Dennis and Eckhardt.
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Position sizing influences whether or not a positive expectancy is possible.......
 
I subscribed to a stock newsletter that had several thousand subscribers. They used to release a new stock pick or two every 3rd thursday at 12pm. If you got the stock symbol quick enough and bought in, it would usually pop 2 points or so. Made some nice rips on that for a while. You had to be quick and stick with nasdaq issues.

Anyone else have a similiar experience now or in the past?
 
Quote from jmoo:

I subscribed to a stock newsletter that had several thousand subscribers. They used to release a new stock pick or two every 3rd thursday at 12pm. If you got the stock symbol quick enough and bought in, it would usually pop 2 points or so. Made some nice rips on that for a while. You had to be quick and stick with nasdaq issues.

Anyone else have a similiar experience now or in the past?
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That's nice.:cool:
 
Quote from Wide Tailz:

Position sizing influences whether or not a positive expectancy is possible.......
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Not really. Position sizing influences whether or not you can continue to exploit an already existing positive expectation.

Consider a situation where you have a biased coin that lets you win 60% of the time. So your expectation is 0.6(+1) + 0.4(-1) = 0.2. Position sizing says to only bet 20% of your betting capital in this situation because that is how you maximize your long-term betting account. You can bet 100% if you want but once you lose a bet, you've lost it all and can't continue. Your expectation is 0.20 per bet in either situation, but only using sensible position sizing will allow you to continue betting and attain a long-term acceptable betting account.

For trading, this means that you must first find an edge (a trading strategy that can expect to win more money than it loses) before you can apply position sizing to take maximum advantage of your edge.

Position sizing will never turn a zero-or-negative-expectation situation into a positive-expectation situation.
 
Quote from kut2k2:

Not really. Position sizing influences whether or not you can continue to exploit an already existing positive expectation.

Consider a situation where you have a biased coin that lets you win 60% of the time. So your expectation is 0.6(+1) + 0.4(-1) = 0.2. Position sizing says to only bet 20% of your betting capital in this situation because that is how you maximize your long-term betting account. You can bet 100% if you want but once you lose a bet, you've lost it all and can't continue. Your expectation is 0.20 per bet in either situation, but only using sensible position sizing will allow you to continue betting and attain a long-term acceptable betting account.

For trading, this means that you must first find an edge (a trading strategy that can expect to win more money than it loses) before you can apply position sizing to take maximum advantage of your edge.

Position sizing will never turn a zero-or-negative-expectation situation into a positive-expectation situation.
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++1

To all the elite super smart traders, it is time to find edge, let start with head and shoulder, RSI, doji candlestick, 50MA cross 100MA..anymore those BS indicator ?
 
Quote from HATEtheRisk:

yes, iceberg orders and block trade system would be probably the best. i use iceberg orders too for stocktrading, although i dont need them really, cuz i dont trade so big in stocks, but i train for later. :D
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yup, that's what pretenders do. Why are you in this thread? You haven't a clue what you're talking about.
 
About two years ago I opened a micro account with FXCM. This was on their dealing desk system. One Friday I had a position with a stop on it. I left the stop on over the weekend. On Sunday the market gapped way down but at the open I was filled at my stop price. Through the course of a few more trades, I realized that you were always filled at your stop (or limit). So the next Friday at the close I set a stop sell open order in and was filled at the stop price on Sunday when the market gapped down. I was sure that I was gonna make a killing doing this. So I built a program with their API. At 3:59:30, my program would start sending out about 30 or so orders in the next 30 seconds into the close. For instance EUR/USD would be 1.3000 x 1.3002. I would send a buy stop at 1.3007 and a sell stop at 1.2995. I did that on about 8 different currency's. Then wait till the market gapped up to 1.3050 on Sunday, get filled at 1.3007 and sell it for an instant profit.

Would have worked perfectly except not much action happens on the weekend. So frequently, the market would gap up 5-10 ticks, I would get filled at 1.3007 and the the bid/ask would be like 1.2998x1.3012 and I would be struggling to get out of a hugely overleveraged position with 10+ tick spreads.

Eventually the account just went bust from other trades and I never tried it again. I put $100 in there a few months ago to try the no dealing desk they now have. It wasn't any good as you cannot actually buy at the bid/sell the ask or split it. Stops and limits are now filled at the market rate. For instance if you have a buy limit at 1.30021 and the ask is 1.30025 and then the next tick goes to 1.30019, you are filled at 1.30019. Same for stops.

Would have been great if I used it during some volatility. Imagine if you could have used it in the fall of 2008 when the Euro was frequently gapping up or down 200 ticks almost every Sunday for a few months.

Other than that, I've never been able to find an edge that could be exploited. All the good ones were before my time.
 
Quote from kut2k2:

Not really. Position sizing influences whether or not you can continue to exploit an already existing positive expectation.

Consider a situation where you have a biased coin that lets you win 60% of the time. So your expectation is 0.6(+1) + 0.4(-1) = 0.2. Position sizing says to only bet 20% of your betting capital in this situation because that is how you maximize your long-term betting account. You can bet 100% if you want but once you lose a bet, you've lost it all and can't continue. Your expectation is 0.20 per bet in either situation, but only using sensible position sizing will allow you to continue betting and attain a long-term acceptable betting account.

For trading, this means that you must first find an edge (a trading strategy that can expect to win more money than it loses) before you can apply position sizing to take maximum advantage of your edge.

Position sizing will never turn a zero-or-negative-expectation situation into a positive-expectation situation.
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Thanks for that. Perhaps I should have said "variable position sizing".... i.e expanding a position size in a profitable trade, 'pyramiding in' etc. Risking open profits at a different rate than starting capital, etc.

Example: you take position, it gets stopped out. You lose 2% of your account value. You take another, it moves up 5%, you then double its position size and move up the original stop to keep the 2% total risk. You keep doing this until your profit taking exit is closer than the risk exit.

Swing for the fence when you get a fat pitch..........

:D
 
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