<i>"You're going to have to read thorugh a lot more threads than this one to form an opinion."</i> I don't know much about many things in life, but of this I'm very sure: the less time any of us spend inside these pages here, the more money we make in actual trading. Misinformation-to-reality ratio in ET runs at least 10/1 if not heavier. If I were trying to learn about trading mostly or solely from this site, there would be zero chance for me to succeed. Some interesting tidbits and amusement, that's about all. No different than any other anonymous message board, it is simply what it is. Keep things in perspective
A thoughtful item from Conquest: http://www.eurekahedge.com/news/05_jan_Interview_Conquest_Capital.asp "In our study, we found that most CTAs exhibit a very high correlation (70-90%) to one or more simple breakout strategies consisting of trading a diversified group of markets by buying at the nth day high and selling at the nth day low. We chose 33 different breakout lengths, ranging from 1 to 200 days. Each of these breakout lengths was run as an "nth day" simple breakout strategy on Conquest MFS' 55 markets. The result is a historical track record for each of the breakout lengths. Our study plots the correlation between a CTA's monthly return stream and the return stream of each of the breakout lengths. We have found that most of the CTAs we tested have a very high correlation to breakout lengths between 30 and 60 days. This means that what most CTAs are delivering is in part a beta; an exotic beta, but not alpha. Further studies showed that CTAs were not generally delivering alpha in excess of the exotic beta. In other words, CTAs as a group were not outperforming the exotic beta they delivered. For an investor, therefore, investing in the exotic beta directly would generally be a better strategy than investing in a portfolio of CTAs that would purport to deliver alpha."
That is a totally unfair bit of commentary, one sided totally. There are heaps of information on ET, it's upto an individual to compile it. Let's be frank here, how many of us learned how to trade (at least at a consistently b/e level) by simply following any concept invented by another person, a turnkey solution? We have to take any method used through its paces by committing our own money to LEARN how it's done, as it is a psychological matter on most occasions. Anyway, you are mistaken IMO.
hedge funds of which 90 plus percent are primarily long equity funds (although they call thamselves long short funds)took a beating today along with the trend followers. rumours abound of trend guys buying heavy into the dip earlier in week only to be smashed today. best surf
You are spot on. It's easy to ridicule a certain sub set of traders when you refer to trend traders that can't define trends. There are plenty in that group to reference.
This means that what most CTAs are delivering is in part a beta; an exotic beta, but not alpha. Further studies showed that CTAs were not generally delivering alpha in excess of the exotic beta. In other words, CTAs as a group were not outperforming the exotic beta they delivered. For an investor, therefore, investing in the exotic beta directly would generally be a better strategy than investing in a portfolio of CTAs that would purport to deliver alpha." WTF does this mean in English?