...just for the sake of being argumentative, following your points, I would say that a) understandig risks relates to stop placement b) understanding statistical irregularities relates to selection of an entry rule c) understanding how to price things relates to selecting profit targets So a quant COULD trade pure price. Pure sophistry, I apologize.
it's sexy, my man, Nobel laureates coming within a hairs breadth of blowing up the world economy and all. real Pinky and the Brain stuff.
...if you read the book closely, the Fed conned the BANKS into doing the bailout. Guilt is a wonderful lever. If it was so threatening, one presumes the Fed would have financed the bailout themselves. You recall that the gentle souls at Goldman Sachs didn't buy the Fed's con.
Regardless of their approach, I think that people trading with a "razor-thin edge" get killed off by noise. Maybe not today, maybe not tomorrow, but soon and memorably. In that regard, I think that the 2 books mentioned, When Genius Failed (about LTCM) and Fooled by Randomness, are excellent resource material. Regards, Thunderdog
...the only possible counter I can offer is that your longevity is improved by keeping market exposure to a minimum by trading on the shortest fractal that you can make money in given your expenses, and only trading when there is enough liquidity for your market order stops to be filled.
...and then paid the banks for their efforts with the "surprise" rate cut late on a friday. i would love to get conned like that someday, lol.
not in physical size, lol. hey, i run a linux farm crunching market data 24-7, but that and my piddly little degrees are nothing compared to the power the big boys can bring to the table. my little cluster is to them what an herb garden is to ADM, lol, and that doesn't even include the heavy iron i don't have a hope of ever owning.
hypostomus: OK. Funnie. I get the point. I'm not bashing maxpi or anyone. It would be nice that people verify facts before they make blanket comments. Proper spelling would be nice too. etc. but whatever.