I already posted this idea 3 years ago. Get in line! P.S.: Good ideas get discovered usually by more than 1 people... See that thingy called radio.
Interesting thoughts. In an unrelated note, I've got a possible job offering for you if you're interested.
This will indeed work. It will not only work, it will work effectively, and can even be improved / enhanced through optimization and, what I refer to 'intelligent optimization'. I have developed my own version of this concept, and believe it holds great profit potential. While it differs from the OP design, the overall concept is similar. And certainly it can (amd should) be implemented at a lower threshold than 100 traders. As for artificially / technology driven systems that in fact replace / replicate traders, in place of actual traders, that is an entirely different discussion, and may have merit in its own right that holds potential. It does make one wonder though, if the very nature of the hedge-fund model may in itself have at its root and core, the realization of hedge-fund managers that even they have to hedge their own positions, in the acknowlegement they are most likely to create losses otherwise, ie, more likely to wrong than right, on an on-going and consistent basis.
I am doing pretty well right now, but any offer on a trading board could be very interesting. what type of job?
There is a path-dependency not being accounted for. Maybe an actual example would be illustrative... Stock A trading at $100. Bad Trader -> goes long, profit target is $10, trailing stop of -$3. Your inverse trader therefore goes short, profit target is -$10, same trailing stop. Actual stock movement -> goes +$3, then retreats back to where it started from. Bad trader has lost a little money (slippage + commissions) Your inverse trader has lost a lot more money (your -$3 stop got triggered). Hope that helps illustrate the problem. To invert properly, it's not just entries, or even just entries and exits - you have to invert the entire risk profile. So if you're fading a dude with tight stops, you need to have no stops at all - ie, accept "infinite" risk - to actually invert what he's doing. And that means you'll have to deleverage, a lot, which means you've cut your own profit potential, a lot.
Where do you all get these retarded ideas like inverse trading for novice traders ? .... The back of a cereal box? This site really is going to the shitter
maybe instead of switched buttons you can use inverse ETFs,so if lame trader buys FAZ you buy FAS and you both are long...
PRECISELY what I was going to say. This idea reflects the OP as a newbie. Seems like many newbies come up with the "Gee, if I just trade the opposite of a losing system, would I make money?" NO! Slippage, bid/ask spread, errors, commissions, trading/data fees, + business costs, etc. make this negative slippage. Poor money/trade management add to this. At best, you get a longterm random results before costs.
There is some merit to the idea. There was a reality show on last year (I think) of a bunch of newbie traders in London, who were taught basic TA etc. and then set loose in the markets. They were doing short-term swing trades, i.e. holding positions for a few days. Equities only. Most lost money, most of the time. So, someone else in the market was pocketing that money. Mathematically modeling the newbie mind, or using actual newbies, and inverting them, might produce results.
great idea on paper, I'd like to see how it would play out in reality. someone averaging down on what he thinks is a losing trade instead of trying to get out too early... now imagine everyone doing the same... cachingo.