Why Most Retail Active Traders Lose

S

Sam123

Guest
Active trading strategies are highly conserved. In other words, people from all walks of life getting into active trading tend to develop strategies that do the same trend-following and counter-trend-following things.

Inhouse “Fadebots” pick up on this and fade against and shake out trend-followers who are actively trading during uneventful times. The fadebots have access to who is trading when, what, and how much. Nothing new here, but more computerized and automated. Don’t believe a liquid market will not move 1% to shake just you out. They know who is trading and you don’t.

However, trend following success comes from efficient markets getting forced into inefficiency by “events.” And when they happen, the fadebots act as market makers responding to size. All they can do is react and provide liquid and orderly markets in a time of crisis and semi-crisis. Otherwise, they will just take your money.

Counter-trend people cut into the fadebot’s action and make money when most traders are waiting for the next “event” to happen. And when the event happens, the counter-trend people get wiped out while the fadebot’s are protected by their size and access.

That’s why the surviving traders are trend-followers.
 
Quote from Sam123:

Active trading strategies are highly conserved. In other words, people from all walks of life getting into active trading tend to develop strategies that do the same trend-following and counter-trend-following things.

Inhouse “Fadebots” pick up on this and fade against and shake out trend-followers who are actively trading during uneventful times. The fadebots have access to who is trading when, what, and how much. Nothing new here, but more computerized and automated. Don’t believe a liquid market will not move 1% to shake just you out. They know who is trading and you don’t.

However, trend following success comes from efficient markets getting forced into inefficiency by “events.” And when they happen, the fadebots act as market makers responding to size. All they can do is react and provide liquid and orderly markets in a time of crisis and semi-crisis. Otherwise, they will just take your money.

Counter-trend people cut into the fadebot’s action and make money when most traders are waiting for the next “event” to happen. And when the event happens, the counter-trend people get wiped out while the fadebot’s are protected by their size and access.

That’s why the surviving traders are trend-followers.
More...
I'll counter-trade a trend-follower any day of the week.
 
Quote from Sam123:

Active trading strategies are highly conserved. In other words, people from all walks of life getting into active trading tend to develop strategies that do the same trend-following and counter-trend-following things.

Inhouse “Fadebots” pick up on this and fade against and shake out trend-followers who are actively trading during uneventful times. The fadebots have access to who is trading when, what, and how much. Nothing new here, but more computerized and automated. Don’t believe a liquid market will not move 1% to shake just you out. They know who is trading and you don’t.

However, trend following success comes from efficient markets getting forced into inefficiency by “events.” And when they happen, the fadebots act as market makers responding to size. All they can do is react and provide liquid and orderly markets in a time of crisis and semi-crisis. Otherwise, they will just take your money.

Counter-trend people cut into the fadebot’s action and make money when most traders are waiting for the next “event” to happen. And when the event happens, the counter-trend people get wiped out while the fadebot’s are protected by their size and access.

That’s why the surviving traders are trend-followers.
More...


If you're familiar with commodities, your Fadebots analogy is similar to the large Commercial operators/Hedgers in the COT report. Some recent studies show that on balance Commericals actually lose $ fading the trend with their historical tendency to sell into the rallies and buy into the dips. Fading the trend/trend followers is a losing proposition.
 
Quote from mhashe:

If you're familiar with commodities, your Fadebots analogy is similar to the large Commercial operators/Hedgers in the COT report. Some recent studies show that on balance Commericals actually lose $ fading the trend with their historical tendency to sell into the rallies and buy into the dips. Fading the trend/trend followers is a losing proposition.
More...
Not clear by any means. As usual, it all depends on time frame. MMs aren't "aware" of the higher time frame trends...

nitro
 
For sure, but this post is one of the most loaded (in terms of possibly deeps statements made) posts I have ever seen on ET and sits at the heart of my current research.

There are countermeasures...

nitro
Quote from Sam123:

Active trading strategies are highly conserved. In other words, people from all walks of life getting into active trading tend to develop strategies that do the same trend-following and counter-trend-following things.

Inhouse “Fadebots” pick up on this and fade against and shake out trend-followers who are actively trading during uneventful times. The fadebots have access to who is trading when, what, and how much. Nothing new here, but more computerized and automated. Don’t believe a liquid market will not move 1% to shake just you out. They know who is trading and you don’t.

However, trend following success comes from efficient markets getting forced into inefficiency by “events.” And when they happen, the fadebots act as market makers responding to size. All they can do is react and provide liquid and orderly markets in a time of crisis and semi-crisis. Otherwise, they will just take your money.

Counter-trend people cut into the fadebot’s action and make money when most traders are waiting for the next “event” to happen. And when the event happens, the counter-trend people get wiped out while the fadebot’s are protected by their size and access.

That’s why the surviving traders are trend-followers.
More...
 
>>>I'll counter-trade a trend-follower any day of the week.<<<

The trend is your friend. Ever hear of that? Think what will happen when the big money coming from institutions is buying a certain stock. You fade the stock or go short. Heaven help you!!!
You will be bankrupt long before you realize how wrong you are!!! The big money will "always win" and the stock will rise and you will lose your shirt!!!!
And hear of the other saying: "It can't go any higher." Yes, it can and it will as long as there is buying pressure on that stock!!!
 
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