Old edges

[eusdaiki]

Quote from Wide Tailz:

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..........

That kind of sounds like a martingale system...

scary...

 

[kut2k2]

Quote from Wide Tailz:

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..........

Good plan. The only thing I'd disagree with is the profit taking exit. Profit taking is for RTM trading. For trend trading, as long as price is moving in your trade direction, ride it until it turns against you.

 

[Buy1Sell2]

The only true edge in trading is capital and the use thereof--


Thank you for your time.

 

[kut2k2]

Quote from Buy1Sell2:

The only true edge in trading is capital and the use thereof--


Thank you for your time.

Reminds me of the old saying:

Want to make a small fortune in the stock market? Start with a large one.

 

[ronin266]

My 0.05:

I had an edge during the Imbalance trading time (aka MOCs) that got closed when they made a "continuous" actualization of the imbalance status.

I discovered it making a statistical study of price reaction after imbalance releases, taking the price changes during the release, at the update, 5 min after and at the close, with a note about the market direction that day.

Basically it was front-running. I knew that Imbalance traders would send the majority of their orders (and it was a really big flow) at the update time. So I had 2 baskets ready of both buy and sell imballances, and waited until after the update time the MOC guys started to open their positions. Once I saw they started it, I only had to send the favorable basket orders, wait 5-20 cents until the orderflow ended, and take the profits.

It didn´t gave me amazing results, but it was a steady income with really small risk, that a lot of times turned a negative day into a positive one .

But as I said at the beginning, it died after the 123c rule changes, so it was impossible to catch the right moment, and the strategy just become a "Top short/bottom pick" stuff with the same probability of wining of these (adding the imbalance factor of course, but now it was a too small play for the risk).



It´s an interesting topic. Since the edges are always the result of unconventional thinking, there is a good use of info about old edges. They can help you start thinking in their languaje, and create new edges (my edge was created when I discovered Imbalance trading, and at that time, it was an already done one).

 

[Mav88]

what inspired you to dig up a 6 month old thread?

 

[ronin266]

Quote from Mav88:

what inspired you to dig up a 6 month old thread?

Found it lurking into other member posts. Sometimes you can find really nice stuff that way. Didn´t noticed the dates lol

 

[oraclewizard77]

In Forex, a group of traders used a faster bank forex chart feed to get a 2 - 3 pip look ahead at the real price. Then they used the bucket shop FXCM to place their orders. Eventually, FXCM figured out what they were doing and froze their accounts.

Doing the opposite trade of anything that anyone posts here on ET. This worked for awhile until some good traders actually started to post so you did not have as many newbies posting dumb ass trades.

 

[Lights]

when VIX was 60-90 back in 2008, i had a strategy to simply scan market imbalances at 3:40. if the market was up big for the day, i would just buy the largest buy imbalances and short the largest sell imbalances on a big red day in market. it was really a once in lifetime type of market where stuff up 5% for the day would close up another 2-5% in the last ten minutes and vice versa. this happened nearly everyday for 3 months

Quote from cyoungmark:

I think this could be really useful in helping new traders cut their learning curve. It's late, so sorry if this doesn't make sense.

What are some old, unprofitable, or unusable edges that the market has made ineffective? It would be great if you could share stories.

I'm thinking maybe if old edges are put out there, new traders could try and create a new edge around that. Get ideas flowing and get on the right track.

 

[ronin266]

Quote from Lights:

when VIX was 60-90 back in 2008, i had a strategy to simply scan market imbalances at 3:40. if the market was up big for the day, i would just buy the largest buy imbalances and short the largest sell imbalances on a big red day in market. it was really a once in lifetime type of market where stuff up 5% for the day would close up another 2-5% in the last ten minutes and vice versa. this happened nearly everyday for 3 months

That was the golden age . You could end up 30-40k in that 10 minutes. Some ppl say that in triple and quadruple witching you still can win something using that strategy, but the risks ar far bigger, and the MOC fills are only a couple of cents. Nothing close to the 2008 times...