Has anyone lost their edge/system b/c too many people knew?

Discussion in 'Trading' started by xburbx, Mar 21, 2009.

  1. xburbx


    Has anyone experienced this or does this only happen if you have a system as famous as the Turtle Trading? My thoughts are that no one person on ET or any forum can share their edge/system and cause enough people to follow it to the point that it doesnt work. I guess it's also relative to the volume of what instrument you are trading. Any thoughts?
  2. There was a thread in the prop firm forum about that. One guy claimed after disclosing his method in a prop firm, methods that worked for 20 years stopped working.

    With all the books out there on trading now, you'd think it may not have much of an impact.

    The one thing I wonder about though is whether all those institutions using systems are altering the way markets move and behave. Imagine all kinds of trend following systems pushing prices to extreme levels all the time. The price of oil almost went straight up then straight down.
  3. you are wrong, many edges are only exploitable with small / mid-size and big players can't take advantage of. you can easily be crowded out of those trades, and that is the opposite of the way of the turtle, and edge that in fact still exists and we haven't been able to crowd out due to it's long-term momentum based nature- those guys made a fucking killing these last 2 years unless they were retarded they made up for a dead decade if they hadn't made money in a 15 year bull market. (retards again if trading momentum and can't spot a 15 year trend)

  4. NoDoji


    Here's an edge nobody can manipulate or take away from you. It's the only edge that works in all markets, with any trading vehicle, using any account size:

    Cut your losers quickly.

    You enter a trade because you believe it will move profitably in your direction. If it doesn't move in your direction, that doesn't mean you were wrong; it simply means it didn't move in your direction. Get out and try again.
  5. xburbx


    As an example I have read that it is why widely known patterns fail because so many people see them and large buyers/sellers can exploit and trick people into trading them and then stop the small traders out. This is just a theory that I read. I'm not taking either side because I dont know.
  6. NoDoji


    I've found that when a widely know pattern fails me it's because I missed a more important "big picture" scenario.

    For example stochastics are a fantastic signal for entering a counter-trend trade; however, make sure a previous S/R level is not about to be tested, because if so the breakthrough can kill you as the trend continues strongly.

    Another example is a stock that gaps up on news, then rallies even further on open, reaching an extremely overbought condition ripe for a reversal. It's pulled far from its intraday moving averages, stochastics are above the 90, and it stalls or pulls back just a bit. Perfect setup! Maybe not. Look at a 6-month and 52-week chart. This hypothetical stock that displays the perfect intraday and even 30-day setup may have fallen 80% over the past 6 months, and the good news is a trigger for big money coming back in, which triggers massive short covering and the avalanche is set in motion.

    So again, the ultimate edge is risk management. Cut the losses and try again on the next setup.
  7. HAH. you do not need to reveal it for your edge to fail.

    eventually all edges over time will fail.
  8. Redneck



    Given your question, and the below two facts - how can any "so called edge” not go away / become obsolete / eventually fail


    The market is continually evolving (changing if you will)

    Every moment in the market is unique

    However find a true edge – now you really have something sir :)

    Take Care
  9. xburbx


    It's not so much an edge failing due to changing market conditions but rather it failing based only enough people knowing about it.

    - Note - I do understand that enough people knowing and using it could potentially be considered a changing market condition, but I'm looking outside that.
  10. bespoke


    ask the MLNM traders that were at swift. specifically one trader here on this board....
    #10     Mar 21, 2009