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Generally, in markets that were part bearish (like the 80s), I made very good returns, between 10 % and 30 % above the index. As a very simple rule, after 2 day

by c06n 7y ago

Generally, in markets that were part bearish (like the 80s), I made very good returns, between 10 % and 30 % above the index. As a very simple rule, after 2 days of a falling index, sell for exactly 1 day. This works mainly because there are enough consecutive 3 days of a falling index. However, if the market trend is overwhelmingly bullish, that does not work anymore, because there are not enough triplets of falling numbers. If it was possible to differentiate the two, I guess it would be possible to reliably beat the index. But of course that is the tricky part ... You cannot be better then the index in rising markets, but you could be better in falling markets.

thaumasiotes 7y ago
> You cannot be better then the index in rising markets, but you could be better in falling markets. That's because the only actions you can take in the game are "buy the index" and "sell the index". As soon as there's more than one price in the market (even, say, one index tracking DJIA and another one tracking S&P 500), it's possible to beat the market average while prices are rising.
- c06n 7y ago
  Not saying you are wrong, but what algorithm would you use to achieve that?
  - thaumasiotes 7y ago
    Always invest in the one that's increasing faster than the other one. I'm not saying you can do it without knowledge of the future. I'm responding to the (correct) observation above that it isn't possible to beat the market average while it's rising, no matter what you do, even if you do have knowledge of the future -- as long as the only options you have are "buy the index" and "sell the index".
qihqi 7y ago
You can beat falling markets by not buying anything. I don't get why is beating the market a goal, isn't making money the goal? I am much happier making 20% while market is up 30%, than losing 5% when the market loses 20%.
- legolas2412 7y ago
  That is literally beating the market. It includes downturns.

by c06n 7y ago

thaumasiotes 7y ago

> You cannot be better then the index in rising markets, but you could be better in falling markets. That's because the only actions you can take in the game are "buy the index" and "sell the index". As soon as there's more than one price in the market (even, say, one index tracking DJIA and another one tracking S&P 500), it's possible to beat the market average while prices are rising.

c06n 7y ago
Not saying you are wrong, but what algorithm would you use to achieve that?
- thaumasiotes 7y ago
  Always invest in the one that's increasing faster than the other one. I'm not saying you can do it without knowledge of the future. I'm responding to the (correct) observation above that it isn't possible to beat the market average while it's rising, no matter what you do, even if you do have knowledge of the future -- as long as the only options you have are "buy the index" and "sell the index".

qihqi 7y ago

You can beat falling markets by not buying anything. I don't get why is beating the market a goal, isn't making money the goal? I am much happier making 20% while market is up 30%, than losing 5% when the market loses 20%.

legolas2412 7y ago
That is literally beating the market. It includes downturns.