What would you do if you had the "holy grail"?

*If you had it nobody would believe you.
*If you say that what you had was close to it nobody would believe you.
*If you traded your own money that would be the only way other than finding someone to believe you.
*If you gave it away it would not diminish your returns. That is the biggest myth known to traders. The reason being that if your strategy were that robust than you could conceivably trade it on every market from stocks to bonds to futures to forex.
there would be no telling of its vast applications on so many timeframes and numerous markets.
*Even if you started a signal service and sold subscriptions that would not water down its overall effectiveness.
*$$$ counts and until you make some nobody cares or would care for that matter.
:(


T-REX
 
I just want to see the loan officers face when you tell him
you want to use this to DAY TRADE...lmaooo :D

Ummmm...its a home improvement loan...yeah yeah....
...thats the ticket... :D


peace

axeman



Quote from DHOHHI:

If you're highly certain that you have found "IT" then trade it ... and trade it with more size so that it doesn't take as long to build up the account. And I believe in a later post you expected to make 100% annually. So if your capital (trading account) is less than what you'd like it to be then consider borrowing money. Interest rates are incredibly low and the 100% expected return would make a couple percent (interest) look like nothing.
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Quote from axeman:

I just want to see the loan officers face when you tell him
you want to use this to DAY TRADE...lmaooo :D
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or even better - to trade condors, butterflies and straddles :)
 
Quote from Error 404:

Darkhorse, my old friend...always a pleasure to see you post. And as always, your questions and observations are well thought out.

Let me clarify. I hope we are on the same wavelength here.

When a strategy works for a while and then after a while stops working, as you so accurately put it, that is a system that is dependent (as I understand your meaning) that is dependent on "market action".

The difference here is that what I believe I have stumble upon has nothing to do with how the markets behave. There would be no need to adjust to market conditions. Only rules. If the rules change, then the system would cease to work. If the rules do not change, the system should work regardless of what happens in the market.

Which is why I stressed several times that it is crucial to not "over trade" the system. Get visible, and the game would be over. I said it had to be "below the radar". I meant just that.

Hope this answers your question.

How have you been? Are you trading these days? Still up in God's country? (man, I miss the beauty of not being in Florida!!!).

Peace my friend,
:)RS
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Error404,

I'm glad you found something that is working for you. But let me tell you this. There's NO such thing as a Holy Grail. It simply does NOT exist. Some of the best traders and midns in finance have tried to find such thing. None exist. All we have is an fleeting effect that will get arb away or just plain stop working.

Look at Renaissance hf. Possibly the hf with the best track record in history in terms of high returns with low drawdowns. The founder, Jim Simons, said there's no such thing. They have to constantly work hard to stay ahead. Some model/strategy worked for a while then stop working. Then new ones have to be created or old ones modified. That's the definition of efficient markets. Markets for the most part are efficient.

Perhaps you found a small niche that can run on onlya few mil, which might not be worth the time to be big institutions. And if that's so you should try to milk it for all its worth. Even a 100% return on $1M base is a nice payday! ;)

Do that every year for the rest of your life then you are pretty set. Sure, you are not going otbe the next George Soros, but it's hella nice living! But my guess is this. After transaction cost, after slippage, after setup cost, and after a few major DRAWDOWNS it will not look so great. It's the nature of the game. Because even on a small time frame if you can extract money consistently then other short term traders will try to do the same.

but good luck! in fact, even big institutions are getting into the daytrading game. I can't tell you much. But they are going into it in a big way... Except they don't call it daytrading.. just a hint. Gotta be careful who you trade on the other side. Even for daytraders who think they are just competing with other daytraders or MM/specialist. There is another group of players emerging...
 
Quote from DT-waw:

or even better - to trade condors, butterflies and straddles :)
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The loan officers will say that you are too conservative. Instead, you should write tons of uncovered calls.:p
 
As I said many times in many posts: - There are unlimited amount of possible successful strategies that could potentially utilize various market inefficiencies and combinations of them. However, capitalizing on such inefficiencies is a challenge on its own. It requires similar if not more powerful model and often quite elaborated tools. Therefore only handful of models are actually applicable to real trading.

I tip my hat to anyone who accepts the challenge and finds the success!

Good luck to you! I will be happy to help you with anything I know (and the more I learn the more I don't know).
Cheers,
 
Quote from T-REX:


*If you gave it away it would not diminish your returns. That is the biggest myth known to traders.
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Using the screen name RS7, I publicly laughed on ET too many times to think about every time someone said they would not share their "secrets" for the same reason you state. I agree that there is no way a trading method can be so diluted by sharing it with any number of traders to have any impact on it's effectiveness. Furthermore, even if there were validity to this mentality (not yours....the one of those who wouldn't share for fear of losing their "edge"), then it would eventually behoove one to get as many people as possible to USE their "secret" and then do the exact opposite. The absurdity of this alone makes your argument indisputable. I agree with you completely.

But as I said, this is not a method of trading per se. It is merely a method of taking advantage of a flaw in the system.


Quote from misctrader:

Error404,

I'm glad you found something that is working for you. But let me tell you this. There's NO such thing as a Holy Grail. It simply does NOT exist.
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Essentially I agree with this statement as well. But again, I do not expect this to work forever. I know once it becomes apparent what I am doing, the "loophole" will close. If I trade only $1mm doing this, I would probably need to spread it out over at least a half dozen accounts. As a trader at Schonfeld, I traded $8mm in one account and KNOW I had no effect on the market whatsoever. Not even if I had put the whole thing into one position (although I was of course never allowed to do anything of the kind).

As for a "holy grail" not existing, I suppose that depends on your definition. When I traded on the CBOE in the late 80's, while I could not do it myself (for my employer to be more accurate), we witnessed the program trading being done between the NY cash markets and S&P futures on the Merc being done with great regularity and virtually perfect results. It too took a change in the rules (and a lot of bad press, including being blamed in part for the '87 crash) to slow down the "free money". But while it lasted, it worked. It still works (I believe), it's just hard to do with the newer rules. And of course, the efficiency of the market caught up with that as well.

I have a friend who has made over 130% verified returns (for himself AND investors) for the past 6 consecutive years trading the minis against the QQQs. (He is not trading small amounts like I would like to do). However I don't know how many people on the planet can do what he does. He watches his screens probably almost a full 120 hours a week, and pulls the trigger once or twice a month. He has a large home but lives in his office and virtually does not leave the room other than on weekends.

His sleep is interupted by countless alarms. His trading room looks like mission control in Houston.

When I ask him why he doesn't just "black box" his system, he shakes his head and laughs. And that is the end of that conversation always. So even though I pretty much know what he does..(and really, I just said what he does)..I don't know enough to duplicate it. Or to execute it, which I believe is the real trick. The concept is simple enough. How he makes it actually work is another thing.

Peace,
:)RS
 
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