Out of curiosity: anyone here consistently predicts market direction?

VolSkewTrader said:
Much easier to predict direction of implied volatility than direction of the underlying.
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Tradex said:
Hi,

What do you call a 7% edge, exactly?
Is that the mathematical expectancy of your system, per trade, for instance?
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Should have specified but I admit I deliberately left it ambiguous. It's a probability edge in predicting a change in implied volatility.

Like VolSkewTrader said, it's much easier to predict direction of implied volatility. Volatility seems to be decreasing some 55% of the time (I think this can be explained as in it tends to jump up rapidly but it takes more time to calm down). So let's say I want it to increase some amount (not just "increase" but "increase by at least so much"), it happens so randomly some 35% of the times but if I add my indicator, it's up 42% of the time.

So is it possible to do something profitable with such info?

When volatility increases, prices go up, so I'd buy an option one day then sell it the other day. But there's theta which makes it lose value, plus the change in underlier. So maybe buy a delta-neutral call/put pair at the money then if the vol goes up enough sell it the next day for a profit. I can test the hypothesis but can tell you upfront that it won't work so funk it. Need to find something more elaborate to actually make money.
 
Aquarians said:
Leaving alone high frequency trading which by definition is predicting market direction with nearly 100% accuracy, anyone here managed to do it?

I see posts here of guys selling naked puts and sometimes making a profit. Based on my backtests with such strategies, the market always beats me by a small margin. Not a huge one, just enough so on average I'm consistently losing. Say I risk $1000 in order to win $200, that's a 20% probability of making money on my side. And my calculations say the risk of losing money is at most 10%, so on average even when losing, I'd be losing $100 and making $200. That should be profitable but my calculations are always wrong, I lose money like 30% in these cases. That's a huge difference in calculations: me thinking risk is 10%, market offering 20% - and experience showing that every freaking time the market offers something it only does so to burn you: because if they offer 20% then somehow they know it's actually 30% and you is the one who will lose.

One TSLA profitable trade is not "consistently predicting direction", also winning with high probability is not "consistently predicting direction" unless the times when you lose multiplied by the amounts you lose are significantly lower than the accumulated profits.

To some extent options can avoid the need for guessing direction as long as you can guess the magnitude (volatility). But my experience with trading on vol is just as disappointing as with direction: the market always gets it slightly better than I am able to do.

So... anyone here managed to consistently outsmart the market? (There was a "backtesting" thread a while ago and it made a point that 5 successful trades once a year does not qualify for that. Trading once a week for 30 years (or 1500 independent trades) with a Sharpe of > 3, I guess that does qualify).
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In 2019 - 2020, I made 147% swing trading ETFs. I tweeted every trade BEFORE I did it, and I documented every trade in a spreadsheet. In June, 2020, I started another run, again tweeting every trade BEFORE I do it. So far, I'm up 36% since June, 2020. @RandomFour
 
Steve Alexander said:
In 2019 - 2020, I made 147% swing trading ETFs. I tweeted every trade BEFORE I did it, and I documented every trade in a spreadsheet. In June, 2020, I started another run, again tweeting every trade BEFORE I do it. So far, I'm up 36% since June, 2020. @RandomFour
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What about 2000 to 2018
 
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