+1 One and only one strategy will lead to financial ruin in the long run. A mean reversion system will fail miserably when volatility dries up, which has been the case up until recently. Now a mean reversion strategy is beginning to show some promise. The correlation between moderalte to high volatility and a mean reversion strategy is very high. Likewise, a trend following strategy has a high correlation to a non-volatile market. I prefer the unit root test to determine if we are in a non-stationary environment or a trend stationary environment. When a unit root problem is present fade and exit quickly. When it is not follow and ride. Most certainly not the holy grail.
define "is it." If you are trading a strategy that larger players ignore, then they arent your competition. I did in my example. This isnt that complicated.... Now one can say, I made moneyBUT I could have made more if I held a bit longer, but that isnt what we are arguing... both can make money.. Again, not complicated.. If I bought a stock at $1 and sell it at $5 3 months later, I made money. if a scalper buys my $5 block, and sells is at $5.10, he made a profit... Who is the loser in this scenario? . [/QUOTE]
The loser is he who doesn't understand that each transaction must, by defintion, involve two people. Bye
Think about it: is it possible to get a profit posted in your account if nobody else loses? Where will it come from? I don't like to start calling soem of you naive, but some people in these threads are trully naive, have no basic understanding how a back office works and how markets transact but believe instead that equities rise magically without someone losing money in the process. Neither I have time for this. This is too basic. Bye
Evidently, you're the one who needs to start doing some thinking. Yes, it is possible, and an earlier poster gave an example of precisely this scenario...
I would say it is getting harder in many "purely mechanical" strategies, as there's so much competition from algorithmic traders as transaction costs go down and systems improve. But as the short-term market approaches ever greater efficiency, it may also make other types of trading/investing more profitable, especially when it's based on factors that computers and/or equations can't yet take into account, such as a company's product lineup and outlook.
Lost cause. By his logic, 100% of traders are losers unless they buy the all time low and sell the all time high.
y'ever notice how many folks claim to have a 'system' that kills the market. I've counted 32,677 in the last 10 years alone. rarely if ever a backtest to prove it oh yeah, that would give it away. like saying I'm really from Mars but I can't show you my spaceship.
Just curious, a bit off-topic, but how does one backtest the discretionary elements of a trading system or strategy ? For example, what if the entry was discretiionary, but the exit was a rules-based mechanical expression ?