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).
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).
