Actually it is. There is only one reason that over 90 percent of traders fail---------inability to utilize PRM. It's a fact.
Risk management is huge in trading but I think there are other edges. So many great traders didn’t/don’t use the same edge.
I am the one that should thank you for creating this thread. It was one of several favorites I re-read after been away from ET for two years. This time it changed my thinking. The majority argued and disagreed. I think because many missed the meaning of the word "TRUE". To me if TRUE means universal, then I agree because there are other edges that are local and not universal. That was why I ran a simulation using randomly generated stock prices.
Many traders have A TRUE edge.. That's the whole point The "ONLY" True edge??? The "Only" Edge?? Cmon
Here is a quote from @ETJ's thread on the interview of Renaissance CEO Brown: Sounds like they could make money by controlling risk, i.e. risk management is their "TRUE" edge?
I generated this stock price chart using GBM, i.e., assumed a perfect Markov stock price movement. It is a one minute stock price chart, has no long term drift (zero growth) looks no different than many of the price charts I traded. Question for the day traders on ET: Is this stock tradable?
Yeah,pretty sure Simmons did ALOT of optimization of stops before coming up with big mathematical models