The Secret Edge

[arabianights]

Some of the finer details of what I do I keep secret... only sensible...

It's the algorithm's faults though. And that's all I'm saying

However I voted option 2. You don't need all of that to be successful trading this way. It's icing on cake.

 

[meanreversion]

After 40 years of investing and 7 years of on and off being a consultant to traders and 1 year developing the system I currently use and over 3 months of trading it in a separate auditable account and profits meeting the expectations that my 4 step qualification process, which included 5 years with backtest date, projected, I have developed a certain level of confidence beyond my ego.

40 years of investing as an American = long stocks. This is the "buy and hold" strategy, or "buy and hope" as some people call it. It doesn't equate to trading.

Please get real. Don't say "over 3 months of trading", because anything less than two years is a statistical anomaly. Come back in 2012 and tell us how you got on...!!

 

[Hotch]

Personally I would go for "profitable, but don't think I have an edge."

 

[meanreversion]

Some of the finer details of what I do I keep secret... only sensible...

It's the algorithm's faults though. And that's all I'm saying

However I voted option 2. You don't need all of that to be successful trading this way. It's icing on cake.

You never did explain your theory on algos.

 

[HowardCohodas]

Mentor/trainer after a year's live trading...i've heard it all now.

Don't forget being a consultant to other traders using my AI (Artificial Intelligence) tool kit based on genetic algorithms over a period of 7 years.

I am not the judge of my qualifications. I can only supply truthful data and let others decide. However I take pride in the recommendations of those I have taught as I sought help in spotting flaws in my methods and debugging my teaching process and material.

 

[LiamH]

Personally I would go for "profitable, but don't think I have an edge."

If you have no edge over the market then how are you profitable? You would have to define what you think an edge is because imho if you are profitable then you must have an edge.

 

[redart]

40 years of investing as an American = long stocks. This is the "buy and hold" strategy, or "buy and hope" as some people call it. It doesn't equate to trading.

Please get real. Don't say "over 3 months of trading", because anything less than two years is a statistical anomaly. Come back in 2012 and tell us how you got on...!!

ouch. Do you really think that you need 2 years of consistent profits before you can say you've likely got the hang of it? That's depressing, lol
Even if you are a day trader taking, say, 20 trades per day, would you still say you need 2 years?
Cheers

 

[HowardCohodas]

40 years of investing as an American = long stocks. This is the "buy and hold" strategy, or "buy and hope" as some people call it. It doesn't equate to trading.

Please get real. Don't say "over 3 months of trading", because anything less than two years is a statistical anomaly. Come back in 2012 and tell us how you got on...!!

I would not consider "buy and hold" my strategy. I also used shorts and stock in combination with options. Positions could last days, months or infrequently years. I don't know how you choose to characterize this, but I would call in neither "buy and hold" nor trading.

Don't let how you characterize things prejudice your conclusions. Nuance is often necessary to distill truth.

 

[LiamH]

ouch. Do you really think that you need 2 years of consistent profits before you can say you've likely got the hang of it? That's depressing, lol
Even if you are a day trader taking, say, 20 trades per day, would you still say you need 2 years?
Cheers

I was about to say something along these lines. Surely the length of time would be defined by the timeframe being used. I mean, using the weekly's it could take 10yrs to get a decent sample size but then surely trading the 1 min 10hrs a day for a year would see enough different market conditions to really test your strategy?

I would say, based on others' opinions that if you have 200 trades and you are profitable then you can be fairly sure you're on the right track. Most people on here quote 100 trades but then the more trades the better. You could get silly and say you need a million trades to REALLY know.

It doesn't matter how large the sample, ultimately your strategy can fall over at any point. It's the traders job to spot it and adapt.

There has to be a balance because your mathematical expectancy can only be judged on the number of trades you have already placed which is past performance. We all know that past performance is no guarantee of future performance so where do you draw the line?

Sorry to go off topic.

 

[HowardCohodas]

ouch. Do you really think that you need 2 years of consistent profits before you can say you've likely got the hang of it? That's depressing, lol
Even if you are a day trader taking, say, 20 trades per day, would you still say you need 2 years?
Cheers

I doubt he does either, but it makes good fodder for cynical and caustic comments. I don't take it personally.

I dealt with cynics when I got my patent.

I dealt with cynics when I accidently discovered a method of encoding gif files over the internet without violating the Unisys patent and sold the software all over the world to government agencies, banks, research laboratories and such.

I've a lifetime of ignoring cynics and being successful. Most of my failures have been a result of following conventional wisdom.

And so it goes.

 

[DionysusToast]

I'm still struggling with the notion that someone who has only traded for a year is teaching other people to trade. You can do as much research as you like, but there is no substitute for experience, i.e. actually trading.

After all, do YOU actually know the best style of trading to suit YOU?

Look - he's done 28 trades isn't that enough ? :whistling

 

[arabianights]

I would say 2 years is a reasonable minimum for a day trader.

For someone trading on longer term timeframes, you may never know if you have skill or if it's just luck.

Sorry.

(On the bright side you can rationalise your lack of skill as variance )

 

[Hotch]

If you have no edge over the market then how are you profitable? You would have to define what you think an edge is because imho if you are profitable then you must have an edge.

I am one jammy *******.

 

[HowardCohodas]

Look - he's done 28 trades isn't that enough ? :whistling

You illustrate a distinct lack of the ability to judge quantity over quality. This leaves me little ability to communicate the difference to you.

 

[LiamH]

You illustrate a distinct lack of the ability to judge quantity over quality. This leaves me little ability to communicate the difference.

To be fair, you can't judge the quality of your trades over a sample so small. I mean, how do you know that they're quality trades rather than just a patch of positive variance?

 

[HowardCohodas]

To be fair, you can't judge the quality of your trades over a sample so small. I mean, how do you know that they're quality trades rather than just a patch of positive variance?

It's 29 credit spread positions now. How would you use statistics to determine if 29 samples is sufficient to disprove the hypothesis that the results are statistically significant?

 

[LiamH]

It's 29 credit spread positions now. How would you use statistics to determine if 29 samples is sufficient to disprove the hypothesis that the results are statistically significant?

Well, the bottom line is it's quite easy to get lucky for 29 trades but less so for 200. The more trades the better as I'm sure you know. 29 imho is not enough.

 

[HowardCohodas]

Well, the bottom line is it's quite easy to get lucky for 29 trades but less so for 200. The more trades the better as I'm sure you know. 29 imho is not enough.

Suggestion: Learn more about statistics. Opinion is irrelevant, humble or otherwise.

 

[DionysusToast]

This pair of posts is a breathtaking example of the difference between common sense and quasi-academic nonsenst.

Common sense:

Well, the bottom line is it's quite easy to get lucky for 29 trades but less so for 200. The more trades the better as I'm sure you know. 29 imho is not enough.

Non sense:

Suggestion: Learn more about statistics. Opinion is irrelevant, humble or otherwise.

Howard - your attempts at appearing clever on here are most amusing.

29 trades, 3 months, 1 set of market conditions :whistling

Proof positive of your method no doubt.

 

[HowardCohodas]

Howard - your attempts at appearing clever on here are most amusing.

29 trades, 3 months, 1 set of market conditions :whistling

Proof positive of your method no doubt.

As you cleverly fail to mention, trading with serious money is the fourth step in my qualification process. The 29 spreads are only in the full production phase.

It's your call whether you want to ignore the 5 years of backtest data covering more than one market condition. Or the 5 months of paper trading. Or the 1 month of pre-production (small money trading) have any statistical significance. I think I could make a good argument otherwise.

So far you have displayed a shocking lack of understanding of statistics to warrant so much criticism. Statistics is not my long suit, but it got me through working in manufacturing and the use of statistical process control. And I think I've used it wisely in evaluating the statistical significance of my results.