Robert Morse
Sponsor
Hard to answer that.
Seven Traits that I Believe are Required for Active Investors to Win in the Long Term
- Thread starter FX xtc
- Start date
Hard to answer that.
1) This reminds me of "Princess Bride" -- I do not think ^redundant^ means what you think it means. But if you take it to mean something like "stale and unprofitable", then Yes. (Hmmmm. Even "stale" is not right.)
Imagine profitable trades to be fish in a big inlet off the ocean, and our intended methods ("TA" tools, time frames, entry/exit rules) are the warp and weave of our nets. And as long as the net is sized appropriately to the fish, and placed correctly to the direction of the school, we will haul in a worthy load.
But the fish can change, the direction can change, and hell, maybe they decided they wanted into that inlet a couple o' miles 'down East.' So you lay and you haul, and you lay and you haul, and *nothing* is coming into the boat. What to do? As RM said, "plan for the future with testing of new strategies"... Have maps, know the reefs and tides, have fuel, make test runs.
2) Are there none that are constant? Only one: Buy Low; Sell High -- and its inverse -- Sell High; Buy Low. Seriously.
3) You've got something that works well for you? Excellent. Tune it, though! Define some performance parameters, and seek to improve your weakest. If it is sometimes demanded that you S.O.H. ("Sit On Hands!"), see if there's not something related-but-different, that can a) keep your head in the market, b) not get you in trouble while bored, and c) possibly make you money. "Multiple streams of income" applies to trading itself, not just life.
L
lovethetrade
No, market conditions change but that doesnt mean strategies become redundant. Logic that worked 20 years ago still works today.
Robert Morse
Sponsor
I would say that is not accurate in my opinion. 20 years ago, there were only a few option exchanges and most options were single listed. Now we have 14 option exchanges. That alone reduces edge from the way markets are fragmented. 20 years ago, futures exchanges were controlled by members of the exchange in the pit. Now we have electronic access. Today most products are easier to hedge which creates tighter spreads. Better for liquidity takers, worse for liquidity providers, but volumes are much higher. Structural changes to the markets are an important factor in where and how you can find your edge.
Cost makes a big difference too. The cost for a "customer" is much lower than 20 years ago, but the cost for a BD is much higher because of technology and regulatory responsibilities.
You read it too fast, RM -- and you read it as a former 'inside guy'.
The remark was **lovethetrade said:
No, market conditions change but that doesnt mean strategies become redundant. Logic that worked 20 years ago still works today.**
You just wrote of conditions, and for sure, they've changed. But the basic strategies?
The ones we use every day --
Welles Wilder -- 1970s
MACD's Appel -- 1980
James Bollinger -- 1980s.....
"Theme and variation" for sure. But even the HFT guys are working moving averages (in their technology) to get a handle on things. And the trades we (all) place around them go back to the very first option writers.
Robert Morse
Sponsor
Yes, I often do. But I expect many of the charting technique have changed too. Too much volume floods into ETF vs stocks, creating less opportunities.
Not to quibble, but didn't you mean, "...volume floods into ETF v stocks, creating [even more] opportunities....."
Yeah, the vig has evaporated. But the methods by which to *earn*..... sheeesh! The issue in 2017 (a thousand years into The World's Greatest Bull Mkt Ever-rrrr-rrr-rrr), is whether to be net long and sleep fitfully, or mix-it-up and *watch* (waiting for a plunk and some climb in vol) -- hoping that a *flock* of black swans go a'swimmin' by -- and fighting-like-hell in the meantime.
I dunno.
Much work to do before 2pm....
Robert Morse
Sponsor
Yeahhhhh. Interesting. Interesting. *Definitely* worthy of a beer, but I'll go further -- worthy of an MBA project, or in those departments that do "essays" -- of being 1 essay in support of a Ph.D...... ("An *assay* essay!") I'm sure it's been done; I just don't know about it. But the last 10-20 years has exploded in work that, before then, would've gotten you laughed out of the department. Now that they've realized that there's dollars behind it (as well as at least 2 Nobel Prizes), they're all a'jizz on it. Hoo boy.
Anywho, great thoughts, RM. I'd hoist one your way, should my hand be filled.