simple strategy....but very profitable
- Thread starter voltrader
- Start date
that's a good point..which i overlooked.
This introduces a whole new set of issues. Do you know anyone who truly acts randomly? I don't.
Anyone looking at the stock market would have to come up with some type of selection process for their picks- be it based on technicals, fundamentals, P/Es, CNBC, discussions with the neighbors, advice from the cat...I doubt this lady would have truly thrown darts at a newspaper page or run a randomizing letter engine to pick stock symbols.
Just because we can't take human behavior into account is no excuse for taking it out, because trying to remove it altogether simply results in the false assumption that humans behave like computers!
Because no one and nothing truly exists in a vacuum, experiments and hypotheses that are executed in a vacuum can have hidden flaws and surprise shortcomings that no one has even thought of.
This introduces a whole new set of issues. Do you know anyone who truly acts randomly? I don't.
That's right. I would like to expand little bit. I think that's where importance of consistently following rules comes in. If you don't have them (follow them) you just REACT to the whims of the market and you consistently lose (even if you cut loses).
There is a difference between playing the market and BEING PLAYED by the market.
Consistent following of the rules is more important then rules itself as long as they make sense.
That's right. I would like to expand little bit. I think that's where importance of consistently following rules comes in. If you don't have them (follow them) you just REACT to the whims of the market and you consistently lose (even if you cut loses).
There is a difference between playing the market and BEING PLAYED by the market.
Consistent following of the rules is more important then rules itself as long as they make sense.
Originally posted by darkhorse
actually no, the vast majority of them are trend following systems that have low winning percentages (20-40%) but extremely high reward to risk ratios on their winning trades (often 5 to 1 or higher). Also just as an example Steven Cohen and Paul Tudor Jones, two of the most profitable traders for all time in terms of actual dollars won, both have said that 95% of their profits come from 5% of their trades.
most of the big players in the futures arena and the hedge funds arena also (by big i mean anywhere from fifty million to a few billion under management) play longer term (days, weeks or months) because they are just too big to mess with arbitrage or scalping or any other size inhibited strategy.
one reason that i am a swing trader, in addition to the fact that i'm not hyperactive and don't feel the need to be glued to a screen every second, is because i want a method that will not choke on ten or twenty million under management when i get there.
there is nothing wrong with daytrading, but it will always remain a relatively smalltime game in comparison to what is possible with swing/position trading. as a swing/positional market neutral trader i can run a $20 million operation, collect profits on my own capital and 20% of investors' capital, and consistently make more than the best daytraders around year in and year out, with less effort and less risk to boot.
Darkhorse,
haha. That's right. Finally someone with some sense. When I was at a quant fund(actually considered to be small to medium sized), and we were running close to $2B. And on MOST days(95%), we don't even 1) read the news 2) check on prices(kinda hard with a few hundred to thousand stocks in your portfolio).
Yet, the totally quantatitative system produced steady returns month in and month out on roughly $2B.
And we were just one "small" quant shop out there. And we definitely didn't scalp for 20-30cents, because we couldn't with that size.
- trader99
Many great traders make money on less than half their trades...it all about money management....
With all this talk of randomness, everyone seems to be forgetting that this lady was using this system during one of the biggest bull markets in history. She probably just jumped on a tech stock rode it up 10% and then rolled into another tech stock and watched it go up 10%, etc, etc, etc... Who knows if she is still doing it now or is just living on some tropical island somewhere (or more realistically Florida) blowing her fortune and laughing at us for discussing all of this. I personally don't think anyone would be crazy enough to be using this system in this market. If you are, good luck.
Besides, with all the people around here who know the secret of the holy grail , why are we discussing randomness. They know exactly which way the market is going, so there is nothing random about it except for the gyrations the hit us with on a daily basis to keep us little folks down and shake us out of our hard earned money.
Besides, with all the people around here who know the secret of the holy grail , why are we discussing randomness. They know exactly which way the market is going, so there is nothing random about it except for the gyrations the hit us with on a daily basis to keep us little folks down and shake us out of our hard earned money.
Man, I read through all that just to get here? Let me re write the story.
A woman made money. How did she do it? She bought more stocks that went up instead of down.
A woman made money. How did she do it? She bought more stocks that went up instead of down.