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I have friends who do this, and they told me, anecdotally, that for every 10 trades they do, 8 or 9 lose money. While they do make it up on the rest, you have
by dpapathanasiou 17y ago
I have friends who do this, and they told me, anecdotally, that for every 10 trades they do, 8 or 9 lose money.
While they do make it up on the rest, you have to ask yourself if you can afford the costs (brokerage commissions and fees) of executing your strategy in that context (they all work for banks and hedge funds).
If you really want to get into this, you might be better off applying to a quant-based hedge fund.
A firm like that will have the capital and brokerage connections to make the game profitable.
Also, take a look at Ed Thorp's web site (http://edwardothorp.com/index.html http://edwardothorp.com/index.html).
He was one of the original quants and has many interesting articles on the industry.
- Tichy 17y ago"I have friends who do this, and they told me, anecdotally, that for every 10 trades they do, 8 or 9 lose money." At least an AI I would create to trade would probably not be worse than me.
- schemer 17y agoI do this and I make money in 1 out 2 trades. Do you know what the heck you are talking about ? http://www.brettsteenbarger.com/articles.htm http://www.brettsteenbarger.com/articles.htm
- create_account 17y agoThen you must be fabulously wealthy.
- deleted 17y ago[deleted]
- dpapathanasiou 17y agoHalf your momentum trades are profitable? Is that before or after trading costs? How often and at what volumes are you trading?
- schemer 17y agoAll I can say is that 8/10 are losers is highly improbable. Given no other information, if you enter a trade there is a 50/50 chance that the next tick is going to be up or down. But notice I said given no other information, there is much more information from the behavior of the charts. If you are a small player the charts will help you be right more than 50% of the time. The rest is how your algorithms and trading methodology take advantage of the information.
- dpapathanasiou 17y agoThat is a gross oversimplification. It also seems you've backed off your claim that 50% of your trades are profitable (if you actually trade).
- schemer 17y agoHere is something a little bit more complicated. 70-80 % win ratio. Please stop with the 8/10 losses misinformation. http://www.tradingtheodds.com/strategy-performance/ http://www.tradingtheodds.com/strategy-performance/