Question for those who believe everything is 50/50 always...

[birzos]

I agree with almost everything you said, even on how public indicators can be used a lot more efficiently, don't see much information on that though, maybe people don't want to give it out.

The only thing I don't agree on is that you need macro fundamentals, I am sure that helps. But if you're speaking of a massive edge, doesn't that edge come from being able to follow the actions of big money and the clues or prints they leave behind? This is what allows for the consistency and accuracy of the trading. Where as a macro fundamental view(I am assuming you're speaking of economic and policy effects on the markets?) is more trying to front run and predict where price will go, without an actual edge to back that up.


Hopefully I didn't misunderstand you and if I did please correct me.

You are correct, the only part you're missing is that technology and micro economics can take you to 95% of the picture, in some instances 99%, but for perfection you need a dose of macro knowledge. Even with algos they still need constant adjustment, what the developers are doing is 'indirectly' building in macro fundamentals. If you have pure micro algos they cause flash crashes, LTCM events, Teslas driving in to the side of trucks, Brexit unwinds.

I already had a pre-warning of the Brexit short because some people looked at the macros, then it was a case of monitoring the micro signals on the day and found the short before the polls closed. Same happened for the US elections, that combination of micro and macro allows a push above 2%/mth.

You have direct (conscious) and indirect (subconscious) combined with macro (fundamental) and micro (technical), being able to combine all four combinations takes you to the top 0.1% of the best of the best or 20%/mth, that is the ultimate return. In essence, if you can identity all four combinations there is no random movement*, if you identify two combinations you have 50% random movement, and if you can only identify one or none you have 75-100% random movement, which covers 99% of people who try trading.

*The Vitruvian Man "The Vitruvian man is unique because it walks a fine line between art and science."
Source: https://www.quora.com/Leonardo-da-Vinci-What-is-special-about-the-Vitruvian-man

 

[trdes]

You are correct, the only part you're missing is that technology and micro economics can take you to 95% of the picture, in some instances 99%, but for perfection you need a dose of macro knowledge. Even with algos they still need constant adjustment, what the developers are doing is 'indirectly' building in macro fundamentals. If you have pure micro algos they cause flash crashes, LTCM events, Teslas driving in to the side of trucks, Brexit unwinds.

I already had a pre-warning of the Brexit short because some people looked at the macros, then it was a case of monitoring the micro signals on the day and found the short before the polls closed. Same happened for the US elections, that combination of micro and macro allows a push above 2%/mth.

You have direct (conscious) and indirect (subconscious) combined with macro (fundamental) and micro (technical), being able to combine all four combinations takes you to the top 0.1% of the best of the best or 20%/mth, that is the ultimate return. In essence, if you can identity all four combinations there is no random movement*, if you identify two combinations you have 50% random movement, and if you can only identify one or none you have 75-100% random movement, which covers 99% of people who try trading.

*The Vitruvian Man "The Vitruvian man is unique because it walks a fine line between art and science."
Source: https://www.quora.com/Leonardo-da-Vinci-What-is-special-about-the-Vitruvian-man

That's a good point. Personally I don't have the ability to correctly predict any macro fundamentals and the effects they will have on the market with any consistency, so adding that for myself would likely negatively affect my results.

Thanks for posting on ET, but just curious if I may, what is your motivation or why do you personally post on ET?

 

[birzos]

That's a good point. Personally I don't have the ability to correctly predict any macro fundamentals and the effects they will have on the market with any consistency, so adding that for myself would likely negatively affect my results.

Thanks for posting on ET, but just curious if I may, what is your motivation or why do you personally post on ET?

Because to make a better world and a better life you need knowledge, there are already enough problems in the world so if you can help people make money who then go on to help others then you did something useful. But you can't help anyone until you help yourself, however you need to do it without destroying you own energy, otherwise you can't pass on that knowledge or success. The main problem is that most people will go and create a ponzi scheme with anything useful.

Why here, because some idiots decided they didn't like the fact that I have a healthy number of combinations and like to pass on knowledge, so have used rather a large amount of energy to offset their stupidity. In the process I increased my combinations, much to their disgust, and it's about time some transparency came back in to the world, this is one of the more time efficient places to put that information.

Which comes back to the money flow diagram, unless you were destined to be in the right (they are the noisy group who never have a solution to anything), do everything possible to avoid them, they create endless amounts of bureaucracy with no end result. I had the knowledge from UHNW to back me up and even I'm shocked, there's very little random in the world, contrary to popular belief. If you study something at the micro level you will find the anomaly eventually, people are very good at hiding them by obscuring the summary and conclusion, but I'm even better at finding them, you just have to look up occasionally to make sure you're not hit from above by a macro event.

Mine was akin to an asteroid hitting and I was standing in the wrong place at the wrong time, while everyone stood in expectation at me being on the unmarked landing spot gleefully waiting for it to hit, but there you go, still here. Random events for you.

 

[Simples]

Because to make a better world and a better life you need knowledge, there are already enough problems in the world so if you can help people make money who then go on to help others then you did something useful. But you can't help anyone until you help yourself, however you need to do it without destroying you own energy, otherwise you can't pass on that knowledge or success. The main problem is that most people will go and create a ponzi scheme with anything useful.

Why here, because some idiots decided they didn't like the fact that I have a healthy number of combinations and like to pass on knowledge, so have used rather a large amount of energy to offset their stupidity. In the process I increased my combinations, much to their disgust, and it's about time some transparency came back in to the world, this is one of the more time efficient places to put that information.

Which comes back to the money flow diagram, unless you were destined to be in the right (they are the noisy group who never have a solution to anything), do everything possible to avoid them, they create endless amounts of bureaucracy with no end result. I had the knowledge from UHNW to back me up and even I'm shocked, there's very little random in the world, contrary to popular belief. If you study something at the micro level you will find the anomaly eventually, people are very good at hiding them by obscuring the summary and conclusion, but I'm even better at finding them, you just have to look up occasionally to make sure you're not hit from above by a macro event.

Mine was akin to an asteroid hitting and I was standing in the wrong place at the wrong time, while everyone stood in expectation at me being on the unmarked landing spot gleefully waiting for it to hit, but there you go, still here. Random events for you.

Things can be random, but if micro reflects macro, which is more often the case than not, you can find statistical biases, that confirm whenever there is adversity, "Truth" Will Eventually Prevail. I know from experience this will sound good to the innocent ear alas impractical. it's how it is, and doesn't even matter if you say it out loud, 20 MA > 50 MA will convince otherwise any day. Not easy to exploit consistently admitedly, but that's what we're up against. To those who think it's against eachother at any given moment in time, I think it's more a reconciliation with one self, with one's perspectives and beliefs.

 

[birzos]

Things can be random, but if micro reflects macro, which is more often the case than not, you can find statistical biases, that confirm whenever there is adversity, "Truth" Will Eventually Prevail. I know from experience this will sound good to the innocent ear alas impractical. it's how it is, and doesn't even matter if you say it out loud, 20 MA > 50 MA will convince otherwise any day. Not easy to exploit consistently admitedly, but that's what we're up against. To those who think it's against eachother at any given moment in time, I think it's more a reconciliation with one self, with one's perspectives and beliefs.

Not sure about the rest of what you are saying, it's not clearly laid out.

"Truth" Will Eventually Prevail - that's true but the eventually can be a very long time and can cause so much damage in the process that the truth starts to become irrelevant, the film Inception is a good example of this.

Things can be random - I have analyzed many different aspects of life down to a micro level very few have ever seen, and so far there are only a handful of examples of what you could call random. Even then I know they are not random, just the amount of effort to find the detail does not justify the result, so you let time work it out for you. Here are a couple of stories.

Went to the head of a CDC regional center with some information about a combination of circumstances that produce a set of results the top professionals cannot understand. They came back, we have no idea and don't have any long term information on the subject, effectively it was random, so I went and worked it out myself. Turns out it's a public health problem but you need 50% majority peer review for traction, so I have the summary and the conclusion and will just have to wait a few years while everyone generates the detail which backs up the already provable summary and conclusion.

Someone posted on ET about the Nasa EM Drive, basically Nasa have no idea why it works but it does. The problem is that it breaks Newton's Third Law of Motion "For every action, there is an equal and opposite reaction". Given Newton's Third Law was from 1686 and has stood the test of centuries we take the primary macro view that the thesis is correct, with a secondary view it could be wrong or incomplete. Now, I am probably one of the more qualified to answer this, my Father worked for Nasa, JPL to be precise, and designed technology for ISS. Is it random, no, what it means is that on a micro level Nasa have no understanding how to test what is actually being moved, they have the summary so need to work through the detail to get to a matching conclusion. It is highly likely that the first attempts they will miss, the process could take years, decades, or longer.

In life, almost every occurrence of random is a lack of knowledge (the almost being too time consuming with too little return to justify the effort). When it comes to markets and money you can be certain of one thing, that lack of knowledge usually comes from someone 'choosing' either directly or indirectly not to release that information.

 

[trdes]

Not sure about the rest of what you are saying, it's not clearly laid out.

"Truth" Will Eventually Prevail - that's true but the eventually can be a very long time and can cause so much damage in the process that the truth starts to become irrelevant, the film Inception is a good example of this.

Things can be random - I have analyzed many different aspects of life down to a micro level very few have ever seen, and so far there are only a handful of examples of what you could call random. Even then I know they are not random, just the amount of effort to find the detail does not justify the result, so you let time work it out for you. Here are a couple of stories.

Went to the head of a CDC regional center with some information about a combination of circumstances that produce a set of results the top professionals cannot understand. They came back, we have no idea and don't have any long term information on the subject, effectively it was random, so I went and worked it out myself. Turns out it's a public health problem but you need 50% majority peer review for traction, so I have the summary and the conclusion and will just have to wait a few years while everyone generates the detail which backs up the already provable summary and conclusion.

Someone posted on ET about the Nasa EM Drive, basically Nasa have no idea why it works but it does. The problem is that it breaks Newton's Third Law of Motion "For every action, there is an equal and opposite reaction". Given Newton's Third Law was from 1686 and has stood the test of centuries we take the primary macro view that the thesis is correct, with a secondary view it could be wrong or incomplete. Now, I am probably one of the more qualified to answer this, my Father worked for Nasa, JPL to be precise, and designed technology for ISS. Is it random, no, what it means is that on a micro level Nasa have no understanding how to test what is actually being moved, they have the summary so need to work through the detail to get to a matching conclusion. It is highly likely that the first attempts they will miss, the process could take years, decades, or longer.

In life, almost every occurrence of random is a lack of knowledge (the almost being too time consuming with too little return to justify the effort). When it comes to markets and money you can be certain of one thing, that lack of knowledge usually comes from someone 'choosing' either directly or indirectly not to release that information.

Yes, but regarding markets, not everyone can make money. Someone has to lose for someone else to win. So, if someone just releases a lot of information that may change the players, or who's the receiving the gains for awhile, but I don't see how that changes the game in the long term.

Maybe your point is you feel some have received ill gotten gains? and you want other's to have that instead? but what's from stopping the people now receiving the edge from becoming the people you disagreed with, that didn't release information in the first place?


Though time, given enough of it. I think history has shown just about anything can be corrupted. I am just trying to better understand your goal or point here.

 

[Maverick74]

The gibberish on this thread is trading at all time highs. I'm not going to short it though as it's going much higher. Good Lord.

 

[speedo]

The gibberish on this thread is trading at all time highs. I'm not going to short it though as it's going much higher. Good Lord.

 

[carrer]

Guys, there is no anti-edge. If I could find a way to consistently lose money doing whatever it is I'm doing, that is actually "positive edge". Why? Because I found something in the market that can consistently be exploited. Just because I'm not personally making money on it does not mean it's anti-edge. Either a market inefficiency exists or it doesn't. At any given time there are people on both sides of the trade. The person who does not have the edge is the one who "can't exploit it" because they are not able to.

Hi Mav,
As a technical trader myself, I could not see a way to find an edge. Looking from the technical perspective, everything seems to be 50-50. The chances of the price to move up or down is 50-50. However, it's different if one is looking from the fundamental perspective. Information can give you an edge.

I am not sure if you incorporate fundamental analysis in your trading decisions. But let's assume it is fully technical. I would like to know how one can find an edge with technical analysis?
Because in the end, everything is 50-50, random.

I hope you get what I mean. Would appreciate if you could give some clarifications.

 

[profitlocker]

To generate 70-100% returns per year you need to understand micro technicals and macro fundamentals

I agree with this, but you can also achieve these returns without fundamentals, using only micro/macro technicals. Not the bullshit textbook TA pattern stuff, but using off-the-shelf, or custom made value based studies.