Does the market really change?

Discussion in 'Trading' started by Blitzjoker, Oct 11, 2020.

  1. Overnight

    Overnight

    Then explain why time is the edge for longs on an index? Why has it not been arbed away?
     
    #21     Oct 12, 2020
  2. d08

    d08

    I'm not talking about average fund performance, which is irrelevant. Relevant are funds that have significant returns for a decade or more.

    I'm not talking about generalized ideas like "trend following works" or "stocks go up or down". I'm talking about specific edges that are clearly defined and have significant performance metrics over significant trades. Details are what matter and I can spot chart differences in charts of different decades often.

    Otherwise we might as well say "businesses either lose money or make money, nothing has changed". No shit.
     
    #22     Oct 12, 2020
    yc47ib, .sigma and _terminus_ like this.
  3. "time is the edge" --- huh?
     
    #23     Oct 12, 2020
  4. Overnight

    Overnight

    Why is this so hard to understand?

    Given enough time, an index will always rise. That is the edge.

    BAM!

    This is a theory. Like the theory of General Relativity, it will remain true until it is proved to be false.
     
    #24     Oct 12, 2020
    drcruz likes this.
  5. no disagreement there, outside of the strict definition of 'edge' not being time itself, but rather index b&h strategies (defining edge as anything w positive expectancy)

    insofar as it relates to earlier posts, indeed this appears to be a strategy that cannot be arbed away. it still stands that the strategy is dependent on market regime, but one that has been in our favor as investors in US markets

    one of my first clients once told me 'buy any index fund, hold it 10 years, and you'll double your money'. I thought it trivial advice at the time, and it prob doesn't hold for every 10y increment in us history, but on the whole it was v good advice
     
    #25     Oct 12, 2020
  6. Overnight

    Overnight

    Yeah, especially when you got this shit going on at 10 bux per share...



    Who woulda' thunk it?
     
    #26     Oct 12, 2020
  7. Of course, if you want to take such a simplistic and coarse view, you're right. They're always moving up, down or sideways. That never changes.

    But how they're moving up and down is always changing and it's actually not true that markets always provide plenty of volatility.

    These days, the e-mini S&P 500 on average moves more within the first 30 minutes than it typically did in an entire 6 1/2 hour session in 2013. Obviously, it also moves much, much faster.

    All of this makes a great deal of difference for a day trader strategy. If you want to say that markets in 2020 and 2013 are the same - you're really taking on a very simplistic view and pay no attention to the finer details which do matter a lot in this business.

    Some statistics I generated in another thread:

     
    #27     Oct 12, 2020
    .sigma and d08 like this.
  8. AbbotAle

    AbbotAle

    I don't think they change overtime apart from the amount of volume.

    Go to TradingView.com, put up a weekly chart of the Dow, go back to the 1920's onwards and you'll see the same sort of moves as today. Up, down, sidesways and so on, little different.

    As for edges coming and going, sure, some do especially for the HFT guys but one edge will never go away in the markets - The law of supply and demand. So to find a solid edge use that, try to work out where there are more buyers than sellers and if so, JOIN THEM...
     
    #28     Oct 12, 2020
  9. On the subject of charts:

    A daily chart simply shows the O H L C values for each particular day. It says nothing about how or in what sequence these prints occurred. For example, a market which opens at the bottom, trends steadily higher and closes at the top will visually look similar to a market which opened at the bottom, printed the top within the first 30 minutes, dropped back down to the bottom, ranged there for most of the day, but rallied to the top within the last 30 minutes.

    Same candle - very different market session.

    There's more to the markets than what meets the eyes. Which is also why I prefer to use more than a simple OHLC chart for my trading model. But that's another discussion/subject.
     
    #29     Oct 12, 2020
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  10. Peter8519

    Peter8519

    Exactly! ;)
    Don't jump in when it started to cross over 50 SMA. Be patient and wait for a few more days because most early trend will die prematurely. :cool:
     
    #30     Oct 12, 2020
    Tradex likes this.