Hello community, i am wondering myself about thought i have a long time and i want to know what other traders think about this. I asking myself: How many people does it need, who know perfect money making strategies that are easy to trade, that the strategies stop to work ??? Example: A successfull trader, writes a book and give all his strategies to the public. Then logical they should stop working, or not ??? What do you think about this ??? If 30% of all market participants would do the same, would it change the markets ? Can it only work, if 10% do the right thing, and 90% do another thing ??? But, what if this strategies have worked for the last 50 years ? Thank you for your opinions.
http://www.stockexchangesecrets.com/stock-exchange-for-beginners-1.html Quote: Second realisation is this ... It isn't easy for beginners to make money on the stock exchange . If everyone could become a billionaire by investing, Warren Buffett would not be famous. It takes time, study and effort and most importantly - independent thought. Not everyone has the will or stamina to carry that through. I know that mine wavers from time to time. Who doesn't suffer setbacks and confidence knocks? --------------- Yes, who cares about my question ? This will never happen anyways. If something works it will work forever, doesnt it ? The mass of the people are too stupid to trade correctly. Thats incredible fantastic for successfull traders. We need this fucking idiots, without them donkeys nothing would work. And i thought stupid people suck...... Man, was i wrong........
The more that utilize a strategy the greater the impetus that drives it to further success. Right? Pump & Dump works well this way for example. What ruins it are those inevitables that must try to tweak it or "make it better" the strategy change it in some way to "enhance" entry, exit & profit. If all follow the EXACT rules of entry & exit the symbiosis would propel the strategy to even greater success. I think
hmm....??? interesting...... But you must not forget, that the market is not driven by the number of people who do the same thing, but by the money which goes in the same direction. The big money rules the price and that big money can come from the mass of people (mostly in a panic sell off scenario) or mostly from a few bankers and hedge fund guys. So, i think your statement may not be 100% correct ??? Second is that you always need someone to lose on the other side, if you want to win, the coin always have two sides, and the money should be theoretical equal for winners and losers. But the fact is that the winners are a few bankers and hedgy fundys and other big companies, like insurancies or what ever....and the losers are the stupid common sheep citizien. So, if we take this as an fact, your statement would be much worse than before it. Dont you think. I believe, the more money does the same thing, at somepoint, there must be a crash point, where the rules must change and that would decide the bankers, like in a new world order manner, top secret of course........ hmm.......
Who have more money, the mass of private investors/traders or the banks ??? Should be the banks, they borrow it all the time from the central bank to be liquid in their trades. So, that means, if theoretically that situation appears that the mass of private people know the rules how to trade, the bankers must change the rules of the game. Only so they can keep the balance even, how it should be. The mass loses and the bankers win. 90% to 10%. or worse. Besides that the banks trade against each other between themselfs. Would be a bad scenario for banks. Fazit: They would must borrow more money from their central banks and trade more agressive, because if they change the rules in common, they couldnt do business between each other anymore. Is that right, so far. Need help, any economist, here ??? Thanx you
I've use the poker strategy for this (whether it is right or wrong, it's the only analogy I have, hence it's a game changer for me when this happens.) Maybe a card player could comment. If 5 poker players all have the perfect money making stratgy and they all play together every week.Everyone knows everyone, and everyone knows each other various methods of play. What would change the card game is if you introduce a new player or an existing player leaves. The dynamics of the game has changed. I have sort of checked this out with regards to instituional holders of equites. One sells out, why? New one moves in.The remaining holders begin to question the others motives and the consequent psych behaviour of each other against each other. Usually whatever worked in the past no longer applies.
I would imagine that it works the other way as well. More people chasing the same opportunity reduces the number of opportunities per, thereby diminishing one's success. The nature of the market also affects the success of a strategy. That's highly significant with options. You can also see it with hindsight TA indicators.
It takes one player with deep pockets to make an existing strategy stop working. Why are big players entering the market at all? They want to make money. In order to achieve this they have to take it from other (preferrably smaller) players. If a true big player spots a strategy that is consistently followed by people with small pockets he will act as follows: - Wait until small players have taken positions - Initialize movement against their positions / scare them out - Profit from the additional momentum that comes from stop losses that get hit
Yes i know what you are talking about, this happens all the time in Daytrading. Market moves to a certain point, where then it looks clear to enter, but right after that, price turns to the opposite and makes a strong move - i lost money with this a lot of times, before i understood to only trade much more perfect setups - since then, that never happened again. ----------------------------------------------- But until now, i found not any satisfied answer here for this question. One player with big money, no i dont think so. Look, my strategies are worked for the last 30 years, i dont have more data, and thats enough - you see my point...... These strategies are the common business of proffessional traders, because in some sense we all do the same, you know what i mean, otherwhise, it wouldnt work - its a self fullfilling prophecy. Now imagin, i write a book, a huge book, with all i now, so easy how it is possible and i give it for free, in books and the internet, so that everyone can do it exaclty this way, how it should be. Of course there would be some idiots, who are too stupid to follow easy rules, but the rest will make money ---------------------------> And here is the problem, its just not possible that that strategies will continue to work then anymore, and that would change the markets completly, because i almost trade every big possible move what exist in the markets, and that are not so much you know....... You see my point ??? That idea with this poker players, was interesting, but we are talking here about the theoretically situation, that the puplic mass knows what the instituitonals know, that would change someting, i think.........
The signal in the market is caused by more than just other traders. Hedgers, company stock issues and purchases, The Bernanke, and Mutual Fund Mondays being a few examples. Noise, on the other hand.........