Would this experiment work?

Discussion in 'Trading' started by ang_99, Jul 18, 2009.

  1. I was just thinking about the following..

    What if a newb opened a trading account and his broker decided to conduct an experiment without his knowledge.

    Every order he made was actually changed by the software to do the exact opposite WITHOUT his knowledge. The market order buy button actually sold and the market order sell button actually bought.

    If he had a limit order to buy at the bid, the order would actually be a sell at the offer.. it would get tricky with some of the realistic fills but you get the idea.

    If he was down 500 on the day, in reality he would be up 500 on the day without his knowledge.

    Also, to keep it simple lets assume he only traded the ES and of course he was charged the same commish..

    Would he be profitable after a year?
  2. It doesn't have to involve a second party. Just do the opposite of what you would normally do. If you're suppose to lose money trading the way you would, then you should gain doing just the opposite.

    Why don't you try it out and see how you do. If you gain, I get 40% since it's my idea. :)

  3. You could only truly do the opposite if you had no idea you where doing the opposite.
  4. btw, I'm thinking where this would be most interesting is with the whole "cut your losers quick and let your winners run" idea.

    I could see the frustration in the newb after he THINKS the trade goes against him and refuses to cut his loses and perhaps even adds to the (supposed) losing position only to capitulate after losing a substantial amount (relative to account size).

    In reality it would have been a nice score for him without his knowledge.

    I think the capitulation factor would be the most interesting thing to witness. Bad traders have a habit of buying tops and selling bottoms.
  5. Funny.
    I remember on backtesting a system deciding to systematically isolate the losers and see what they had in common. I was actually able to find the common factor, then programmed it to on that factor switch the signal from sell to buy or vice versa, and voila! Profits!
  6. Don't you enter a trade because there's a high probability of success? Just do the opposite. Piece of cake!