11–20 of 84 posts
Really successful traders spend their obtaining insider information, not massaging public data. It stands to reason that an ensemble of technical trading methods would regress towards the mean.
Really successful traders spend their obtaining insider information, not massaging public data. It stands to reason that an ensemble of technical trading methods would regress towards the mean.
It was more subtle than inside information. He implied that he could actually influence the outcome and hurried me on from that point.
Mind blown.
Really successful traders spend their obtaining insider information, not massaging public data. It stands to reason that an ensemble of technical trading methods would regress towards the mean.
Using insider information is illegal. If you mean insider information then this is total nonsense. Sure, there are a few that do illegal things (and inevitably get caught since there is so much monitoring going on).
Sure, there are a few that do illegal things (and inevitably get caught since there is so much monitoring going on).
Really successful traders spend their obtaining insider information, not massaging public data. It stands to reason that an ensemble of technical trading methods would regress towards the mean.
Using insider information is illegal. If you mean insider information then this is total nonsense. Sure, there are a few that do illegal things (and inevitably get caught since there is so much monitoring going on).
Interesting article. I do something related, and here's my take: Data mining is useful because it gives you things that are predictive that you might not have considered at first, but make sense after. This is mainly due to combinatorial explosion in the potential number of formulas. You generally have a vague idea of what might be predictive, eg cheapness vs earnings and cash flow, but there's a huge number of ways…
Never understood why anyone would spend time creating any trading method given even if it did work (possible, but unlikely) the SEC would audit you and then leak how you were making the outperforming returns. Welcome any thoughts, in part because legally beating the market is possible, just don't get the SEC & OPSEC aspect.
Why would the SEC audit you? Just by random chance there are many people outperforming the market. They can't audit you just for outperforming. If they do audit you, how will they discover how you are generating your trading decisions? Their remit is to make sure you aren't doing something illegal. There's no reason they would understand what you were doing in anything other than a superficial way. Also, something ca…
Really successful traders spend their obtaining insider information, not massaging public data. It stands to reason that an ensemble of technical trading methods would regress towards the mean.
This is exactly true. I had the pleasure of having a very short sit down with one of the world's most successful traders and he said this in not so many words. It was more subtle than inside information. He implied that he could actually influence the outcome and hurried me on from that point. Mind blown.
Earlier quoted context omitted.
Why would the SEC audit you? Just by random chance there are many people outperforming the market. They can't audit you just for outperforming. If they do audit you, how will they discover how you are generating your trading decisions? Their remit is to make sure you aren't doing something illegal. There's no reason they would understand what you were doing in anything other than a superficial way. Also, something ca…
Few years back, SEC started being very agressive about finding entities making above average returns; my understanding is that if over a set amount of transactions you're making over 30% that you will get "knocked" and the auditors have zero reason not to leak the information. Best example I know is the Walmart parking lot satellite imagery analysis; happy to dig up a link.
Really successful traders spend their obtaining insider information, not massaging public data. It stands to reason that an ensemble of technical trading methods would regress towards the mean.
This is exactly true. I had the pleasure of having a very short sit down with one of the world's most successful traders and he said this in not so many words. It was more subtle than inside information. He implied that he could actually influence the outcome and hurried me on from that point. Mind blown.
Remember the maxim, past performance is not a guarantee of future results. You can develop strategies based on past data that will beat the market, but, the nature of markets is to adapt to kill your edge. Markets adapt constantly and your edge stops working at an unknown point in time. It's unknowable when that WILL happen because past data can't show that.
The other reason is transaction costs. In gambling called vig. Let's say I'm betting NFL games. NFL home teams win 51% of games. Even flipping a coin I've read come up heads 50.1% of the time. These are profitable systems. But you're paying the bookie 10% on each loss. You could find someone to bet you on coin tosses and bet heads each time. You have a positive expected return, although you need a huge number of flips to make money!
In trading of course costs is commissions. Why do you think there was a rise in HFT? The strategies are consistently profitable. (Besides the flashing/manipulation tactics) It is ONLY profitable because of extremely low commission costs that are not available to the retail (or even semi-professional) trader.
Systems that can pull $0.0001 out of every share traded overall on high volume can be (pretty easily) created, but you can't trade them profitably. In fact, you will find commissions (semi-pros who pay about $3 per 1000 shares) priced right at the point of an edge you could be expected to develop.