Quote:
Originally Posted by ToothSayer
This view is silly. If "the price action told you" when to short or do anything, then everyone could get rich off price action. No such edge exists. If there is an edge in price action, it is necessarily small.
If the price action tells you anything it would be a tiny amount of EV. It's my claim there are spots in the market for large EV.
I asked you before, what are you claiming is the EV difference between "waiting for the price to turn" vs trading while ignoring that? You cant answer that, yet make categorical claims. The difference CANNOT be very large or there'd be stupendous amounts of free money out there purely on algos for institutions who don't have to pay retail spread + fees. It would be academically proven beyond all doubt, rather than the literature saying there is zero or slightly above zero at best in anything technical.
It's my claim that there is a large edge in fundamentals, and that "waiting for price to turn" according to whatever tea leaf reading you're doing is flushing that edge down the toilet, because the price turn edge must necessarily be small, and fundamental edges may not be.
That's without going into the the loss of noticing opportunities because you're running worthless stats and lines on charts and thinking about them all the time, rather than looking for real non-tiny alpha.
This post is probably a mistake and I am not trying to start a flame war but I would like to discuss the concept of "edge". I really hope this can be a civil conversation without name calling and typical douchebag behavior. I really like to discuss trading with an open mind.
Edge depends on lots of factors. Edge to a very short term momentum trader means something different than edge to a longer term fundamental trader. Back in the pits edge was simple if you bought on the bid and sold on the offer you got the edge. But only the computers play that game now.
I know exactly what my edge is as I have mathematically calculated it. Certain things happen and when they do I make a trade. Since I have done this for a long time and have kept good records I know the odds of what will happen next and if the odds are right I make the bet. For you poker players think of it as a flush draw when the pot odds are in your favor. It doesn't always fill your flush but its a bet you have make every time.
For someone who talks a lot about their ability to create alpha and trade with a huge edge I don't understand how selling short things that go 15-20% against you are creating alpha or in any way have an edge? Doesn't sound like much edge to me. But like I said I don't play that game.
I am open minded though. I realize that I have a very specific trading style and approach but realize there are many different ways to approach trading and the markets. Just because someone doesn't trade exactly the way I do doesn't mean they are a clown or an idiot or beneath me. There are infinite ways to approach trading with unlimited options of what to trade and what timeframe to trade. I love to discuss both my ideas and the ideas of others so we can all share and learn. I never dismiss them out of hand because the best way to trade is tailor made to each individuals psychology.
We shouldn't be attacking and trying to tear down each other but rather trying to have constructive insult free open discussion. There isn't anyone here who knows it all or couldn't learn a thing or two from others.