They couldn't replicate the success. This was a real eye opener to me about the fleeting nature of lucky streaks and the "real" reason for succesful trading in most cases. It aint what anyone tells you
What kind of Edge you have?
- Thread starter carrer
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They couldn't replicate the success. This was a real eye opener to me about the fleeting nature of lucky streaks and the "real" reason for succesful trading in most cases. It aint what anyone tells you
Every now and then surf, you actually say something that makes sense!
I remember reading an article that said, to the best of my recollection, that given how many fund managers there are in the world, it was within statistical probability that a guy like Warren Buffet would exist even within the scope of random outcomes. Simply put, you expect that in a 50 year period, there would be one guy at the top, a few really good ones just slightly lower, and then a whole bunch lower down. You can never predict who would get 19 trades out of 20 right in a row, but with 100,000 or more fund managers, a few would end up doing quite well simply by way of the statistical distribution.
The other interesting thing I read (perhaps from those Freakonomics type books) was when looking for a hedge fund, you were actually better off to invest in one that showed a bad performance in the previous year. Any fund that had a spectacular year tended to do much worse the following year. Similarly, if one fund did poorly, it tended to turn things around for the next year. Of course it could still go belly up, but statistically speaking, the funds that did poorly one year tended to do better in their subsequent year than a fund that had done really well.
Every now and then surf, you actually say something that makes sense!
I remember reading an article that said, to the best of my recollection, that given how many fund managers there are in the world, it was within statistical probability that a guy like Warren Buffet would exist even within the scope of random outcomes. Simply put, you expect that in a 50 year period, there would be one guy at the top, a few really good ones just slightly lower, and then a whole bunch lower down. You can never predict who would get 19 trades out of 20 right in a row, but with 100,000 or more fund managers, a few would end up doing quite well simply by way of the statistical distribution.
The other interesting thing I read (perhaps from those Freakonomics type books) was when looking for a hedge fund, you were actually better off to invest in one that showed a bad performance in the previous year. Any fund that had a spectacular year tended to do much worse the following year. Similarly, if one fund did poorly, it tended to turn things around for the next year. Of course it could still go belly up, but statistically speaking, the funds that did poorly one year tended to do better in their subsequent year than a fund that had done really well.
Thanks! yes, this makes sense. We invest in the strategy itself rather than its performance. The strategy has to have an edge and be expected to perform into the future.
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That's my edge, too!
He said his edge has existed for 100+ years. He never said it occurs daily.
It's also a really time and mentally intensive way to trade. IMO we as traders don't consider enough how much time is actually worth.
Sorry that I wasn't clearer. By 'any day' I guess I should have said that you can find such basic 100+ year old price movement every day on 1 and 5 min. charts in stocks, futures etc. but obviously not on fly-specked charts or in stocks/futures that are trading in very narrow ranges.
Of course not. Though to have qualified as basic price movement, the success ratio must be very high. But the beauty is that when basic price movment doesn't work out, it can be read very early to where you can exit without any or with little damage.
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It seems to suit me. I only trade for a couple of hours a day and take frequent breaks. The time spent learning was brutal though.