Hand-me downs

Discussion in 'Trading' started by cmaxb, May 1, 2007.

  1. cmaxb


    I hear a lot of talk about safeguarding one's methods. You spent years developing them, and they are what bring home the bacon. I am curious what kind of methods did you used to use that once made money for you but are now not state's secrets?
  2. I burn them when they are useless
  3. I remember when I first started I wasn't thinking on the same plane that I am now, and I was very close-minded. I came to realize (thru the market wizards books) that really anything with a greater than 50% probability constitutes an edge. The more probable the event, the bigger the edge.

    This changed my thinking completely. One thing that is noticeable is if you keep track of a specific stock or two, you'll see intraday patterns.

    For example, for the last two weeks or so, NFI was trading with a probably pattern of: 1) Small opening run up higher, 2) Sell off to intraday bottom on low volume, 3) at 3-3:30, the volume popped and the price would shoot through the roof to give a gain for the day.

    In fact, a market order to go long at around 3pm everyday probably had a 75% success rate of yielding a considerable gain by market close.

    A pattern like this could happen for example, when a specific big buyer is buying at the end of the day. Sometimes people will sell-off their positions before going to lunch, and you'll have a lunchtime sell-off.

    The pattern doesn't last indefinitely, and after a while your edge is gone.

    Hope I could be of help. :D I can't give out anything else... there is no free lunch. And if someone does tell you something, it probably is not a big edge. (Yea I admit it, the above example is not a very good edge or a permanent system but I just wanted to give you an example)