if the alpha generators don't knock on MS's front door, they don't exist, never existed and it is a big myth. doesn't sound like such a great business.
It's a pity that you look for alpha producing hedges, I can only offer $ producing edges. I am never lucky in life.
I personally witnessed even more interesting cases here in Russia: when people who's income was, let's say, not ideally from ethical source, claimed to trade to explain where's the money from.
Well, the guy I used as an example spent something like 10 years in local trading related forums investigating various methodologies until he eventually stumbled upon a mentor. Then again I know a guy who told everyone he's in the construction business while he was actually just using it for tax fraud, people found out when he got an actual jail term. And for ms, the requirement for me is that the method has to work in all markets, it can have high volatility and higher drawdowns in adverse conditions but still has to churn out a profit. If the idea was to just come up with something that works only in certain conditions, it would be easy to come up with strategies.
I personally have 10 years of experience with markets and honestly this experience led me to conclusion that whatever edges are not structural or very long-term fundamentals (like stocks going up on average because human civilization evolves, brings innovations and optimization), well, all other edges are most likely just lucky streaks unless one has ability to read markets on almost metaphysical level. On mechanical level my results didn't show any edges that existed in all market conditions. One sure edge in financial industry though is being on the "sell side" (brokers, advisers, mentors and other kinds of commission business).
I agree that edges from the retail trader perspective are most likely temporary. But so what if they're just "lucky streaks", if one of these streaks lasts for a decade and you decide to quit at the right time, you might only give back 20% of the profits. I also expect a large drawdown some time in the future after which I will stop trading. I'd say floor traders also had a "lucky streak" as their edge diminished with electronic trading. That said, many still managed to earn quite a decent fortune spanning through decades.
Very true, just that's not too solid base to provide living to a family. So in a way Surf is right: better have money first and trade second as a way to MAYBE hit the home run or as additional venture, not the other way around. Institutions know that well and are mostly after commissions, not very eager to risk their own capital. Ironically, I know that well too, because for example in 2013 my trading showed net loss, but at the same time my trading profited for myself because of management commissions. I am really sorry about that, cause I managed money of people I truly respect and some considered my friends, but that let me understand how the stuff really works in financial industry. Most funds and banks profit exactly like that, hardly generating any alpha and meeting beta in the best case, yet making consistent money off commissions. THAT is the TRUE edge in markets for sure.