If that assumption is true, how come hedge funds are profitable most years and the average retail trader cannot save himself if his life depended on it? Most retail traders have no clue on reading the trend of any stock, index, mutual funds, etc. And too much assumptions that they know better than the real professional hedge fund managers? When you talk of smaller trends, I can see you are probably, a day trader. When I talk of trends, I refer to the longer term trend which everyone can easily see from the stockcharts. There is a lot of noise and ambiguity when you are trading on a short term basis. What you see most times is irrelevant to the major long term trend. Those short term moves are nothing but, noise. I do not bother with those. A huge waste of time and effort.
what was your aha moment when you first started trading?
- Thread starter mute9003
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If that assumption is true, how come hedge funds are profitable most years and the average retail trader cannot save himself if his life depended on it? Most retail traders have no clue on reading the trend of any stock, index, mutual funds, etc. And too much assumptions that they know better than the real professional hedge fund managers? When you talk of smaller trends, I can see you are probably, a day trader. When I talk of trends, I refer to the longer term trend which everyone can easily see from the stockcharts. There is a lot of noise and ambiguity when you are trading on a short term basis. What you see most times is irrelevant to the major long term trend. Those short term moves are nothing but, noise. I do not bother with those. A huge waste of time and effort.
Yes I am a day trader because I don’t think one can see the trend clearly and consistently for any time longer than a few minutes or hours. The key here is consistency with a statistical edge. A monkey will get it right 50% of the time by random picking/trading.
Do you know the hedge fund industry as a whole cannot beat the stock market index? Buffett had a famous bet with some hedge fund managers for 10 years and handily beat them by only owning the the stock market index.
Do you know the hedge fund industry as a whole cannot beat the stock market index? Buffett had a famous bet with some hedge fund managers for 10 years and handily beat them by only owning the the stock market index.
What you omit is the fact that not all hedge fund managers are even competent traders. When I refer to hedge fund managers, I refer to the likes of Paul Tudor Jones, Ed Seykota, Steven Cohen, Jack Schwager, etc. I doubt Buffett beat anyone of the top hedge fund managers. Day trader Timothy Sykes used to own a $10 million hedge fund. He lost most of the monies of his friend and had to close it. Michael Covel in his book, Trend Following put the results of the top hedge funds over a huge number of years in his book. They were pretty much consistent, occasionally will have 1 or 2 losing years with most years having huge returns. If your assumption that trends are useless was true, these hedge funds would not be able to have profitable years on a consistent basis yet, even now continue to make huge returns on a yearly basis. That is not even counting the huge handicap of hedge funds moving tens of millions, hundreds of millions to get into on stock positions. Retail traders do not have such a handicap---they can move in and out of stock positions easily.
I know of those big shots but you’re just cherry picking here. In addition, they probably won’t do so well in today’s environment as the market gets more and more efficient.
On the counter point, Jimmy Simons has been hugely and consistently successful of doing pretty much just day trading with billions.
I am cherry picking here too.
On the counter point, Jimmy Simons has been hugely and consistently successful of doing pretty much just day trading with billions.
I am cherry picking here too.
I am all ears.
I know of those big shots but you’re just cherry picking here. In addition, they probably won’t do so well in today’s environment as the market gets more and more efficient.
On the counter point, Jimmy Simons has been hugely and consistently successful of doing pretty much just day trading with billions.
It doesn't matter what the market environment is, the best traders will still be the best traders. No doubt, Jim Simons is one of the best hedge fund managers who happen to use algorithms. Trend following works whether people accept it or not. It does not really matter. I use it in my trading and would be a fool not to.
But the turtles didn’t do well afterwards due to the market changes. Although the principles hold true one needs to constantly adjust to the ever evolving market.