the reason for the secret in our business is so simple. if you dont know the reason you will probably never make money. If you make good money , you beat the market (the mass of trader) if you tell how you do , everybody will do that and it will stop to work. When you make money you take advantage on the market , you take advantage on the majority of trader. Only a dumb person will tell how he will take advantage on other people , and good trader are not dumb. Sorry for my english, Vinny
I agree. An edge is an inefficiency. If you have something that REALLY works, why in the world would you want to have it aribtraged away in part by others piling on? Leasing the signal out, OK. At least you make some risk-free $$$. If someone discovered that buying lumber on Tuesday around 11:30am and holding it until Wednesday around 11:30am made a reasonably large return, it is not an unlimited market! But my rule of thumb is, that when a purchased trading system "reveals its logic, it is unlikely to have much value.
You bring up three points directly and one other by inference. All are interesting and may or may not have merit. There is one thing for sure about the human aspect of you comments. The WSJ addressed trhis unknowingly on Friday 19JAN07. from my personal experience, on any fractal and in any market, people wind up going in one of two directions as a consequence of one thing: continued mental effort. It is one of those perfect storm types of things. Many people in ET have recognized what I speak of regarding each fork that provides the two directions. I call one strong and persistent work to learn one of my methods or any good or great method. The other is just as productive and it goes in another direction. It is a strong and persistent "work" to refute my methods or refute specific aspects of market trading (TA for example). Two identical mental activities that lead permanently in opposite directions. It is so cool to observe, literally, over the years. One result is wealth and the other is a devistating mental state that is pervasive. The book of interest is: Train Your Mind, Change Your Brain: How a New Science Reveals Our Extraordinary Power to transform Ourselves By Sharon Begley. What is so spectacularly neat is how a proof comes into being right here on ET from two distinct paths going in opposite directions. Very tough shit for the B people and really exciting for the A people. The subject is neuro plasticity. For those of you coming into the realm of sports memory that I have described, this is the underlying topic. For the out of control detractors, you see that they are triggered automatically to perform over and over what their strong and persistent "work" has precipitated in building their mental state. In either case it is impossible to stop hitting T to make money almost automatically or to hit Reply to spout off some banal remark that has already been stated ad nauseum. 2007 is coming to an end and for sure some wealthy A people will continue to pay it forward and the B people will continue to "work" at their banality. Viva!!! neuroplasticity. Now everyone see's why passing it forward is so personally valuable. Your comments on how the market works, I feel are only accurate if the impact is significant and the person is entering/exiting. for those using a timely reversal strategy it is always a case of positions being "pushed" by the herd.
And ironically, now that every trader and his mother knows all about the old turtle method (simple trend following), it no longer works nearly as well as it used to. As far as I know, Richard Dennis hasn't made a dime trading since the 1980's.
Around 1999 a video was made about traders on the SFE.The trader that stood out the most was an American named John [rambo] Moultan [a local]who during the documentary outlined his approach to the markets, it was as follows. 1. His most important comment - " I DON'T TRY TO PREDICT THE MARKET " 2. The market is like a Comet going thru the sky,you can't really see the Comet [ grasp the market ]you can only usually see the tail! 3. Regarding charts/TA - "you can analyze charts up to the ying yang but all you're really seeing is history,the tail of the Comet" 4. As a trader you have to learn to jump aboard and ride the Comet. It's as simple and as complex as that! I listened to other traders being interviewed describe him as a big trader, at one point he showed the printout of his trades for the day, it represented 13% of the volume in the financial market he was trading, he was concerned about possibly overtrading! After careful consideration of the documentary I realized that this guy knew what he was talking about, so I set about finding a way to ride the Comet! My copy of Metastock has resided in the office cupboard for many years now during which time I worked diligently to understand 1 market [for me the FTSE 100] as completely as possible. These days my trading emulates a school of fish or a flight of birds, have you ever noticed how they seem to move in unison! Obviously the technical and mechanical aspects of trading also need to be mastered but they won't do you much good until you learn to - RIDE THE COMET! I sincerely hope that this may be of help to someone out there! p.s. If anyone wants info regarding the documentary feel free to PM me Best Regards Johno
Thats true with regard to Dennis, but I think he has all kinds of personal issues with wealth that ultimatly lead to his downfall. Look at the political "causes" he has been involved with, classic of someone who feels guilty for being wealthy. His former partner, William Eckhardt, continues to be successful and has a huge office at the CBOT, an entire floor the last time I was there (about a year and a half ago). Sorry for the pop psychology. Brandon