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I don’t think that’s quite right. Otherwise, you could just follow the opposite of your unprofessional trade strategy as a cheap proxy for a professional tradin
by awb 5y ago
I don’t think that’s quite right. Otherwise, you could just follow the opposite of your unprofessional trade strategy as a cheap proxy for a professional trading strategy.
I think the market is dominated by front-running trades and randomness.
- initplus 5y agoThis reasoning doesn't work because the market isn't a sequence of discrete binary choices. If the "opposite" of a bad strategy was a good one anyone could have great returns by designing some obviously terrible money losing strategy then doing the "opposite".
- hollerith 5y agoRight, and even if the market was a sequence of discrete binary choices, bad traders will make many bad binary choices, but many of their choices will be good ones. (They just won't know which are bad and which are good.) In other words, reversing every choice in a mediocre sequence of binary choices yields another mediocre sequence of choices.
- RhysU 5y agoTaking into account trading costs, a meh strategy and its inverse can both lose money.
- civilized 5y agoFront-runners still have to run in front of something, though. And it's probably not going to be the purchases of some little retail investor.