I’m not wasting my precious time ...

Oooh precious you say. Like I said no facts. Just opinion like all the rest of us. But yet you can't admit it. Maybe someday huh.

This was all in vain annnnyway because OP was - would you share - and the answer everyone gave was no (other than money management etc blah blah) whether or not they had one or even thought one existed.

If you really read the answers carefully you will find that the answer is yes we are sharing our holy grail but not necessarily methods for generating trading signals. That's because the journey is part of the holy grail and without the journey you will not become a consistently profitable trader. Don't underestimate the importance of exits and money management. These can make a huge difference to your bottom line. But even they are not as important as your psychology. To make money you need a +ve expected value strategy, compliant markets and great psychology.

Screenshot_20200502-210421


That didn't take long. Next, queue up the post on ET. This guy really likes to ignore all the evidence right in front him, it's so much easier to simply believe what you want to believe. Never going to be a good trader like that.

The ban originally was only three months. Permanent now.

Mike

I wrote this while trading and haven't had a chance to edit; so please excuse me if it makes Joe Biden appear coherent and lucid...


I believe there are at least a few points we can all agree upon; because they are blatantly obvious to anyone who has ever endeavored to become a profitable trader. And for the most part, they are self-explanatory. 1) Adequate capitalization 2) Emotional Aptitude, which includes the requisite temperament, attitude, patience, discipline, mindfulness, and humility. 3) Risk/Trade Management i.e., traders must strive for both a high win rate and asymmetric payoffs. It is essential in trading that a high win rate is attained in conjunction with high expectancy, because the risk of ruin is a function of the loss rate. If your method does not have a high enough win rate then the risk of ruin will be greater due to the inevitability of an idiosyncratic loss or consecutive losers. As an addendum, an approach that provides quick feedback to alert the trader of failure as soon as possible is highly preferable. That being said, no matter how crude or refined a method one employs, it finally boils down to surviving against one's own incomplete intellect, a misfired bout of randomness, in controlling the risk, and in executing a set of consistent ideas day in and day out, so that chance can prevail.

Perhaps another fact we can all agree upon, is that there isn’t one correct way to trade, nor one correct approach to the market that will afford you the best chance of coming out a consistent winner. A lot of that has to do with the fact that no two traders are exactly alike. Allow me to generalize and classify the 3 main types of traders. 1) Those who don’t know anything, or have a very limited understanding about the markets. 2) Those who think they have an understanding of the markets; but are unable to recognize their lack of relevant knowledge. And, 3) Those who understand how the markets are structured, how they function, and who drives price.

In a very generalized manner (once again), the markets are still the same as they were in the past. Markets go up and they go down, they back and fill, and risk and uncertainty is still a fundamental reality in trading; and just as in the past, the best we can hope to achieve is an incomplete, but probabilistic knowledge of that environment. However, today’s markets have evolved considerably from past markets. Not the least of the reasons why they have changed is the shift from active to passive investment, and increased AUM of strategies that are on “autopilot” There are still decisions being made by humans; by active value investors, and the fundamental/discretionary crowd, but their influence on price has dwindled dramatically. ~90% of trading volume comes from Quant, Index, ETFs, and Options.

Back in the day, the market used to work something like this. The market had been moving in a certain regime, and sooner or later a fund manager would get the inkling that a change was afoot. His action or inaction would disseminate exponentially to others, and then the regime would change. The key to keeping up with this was to know what the fund manager was keying off of, and then following that signal. So, back then 2 of the most important things that counted with regard to markets were sentiment and momentum. That is, it was all behavioral, and reasonably efficient. Sure, they would like to comment on fundamentals, but the fundamentals were only important because they influenced the behavioral.

.A great deal of the human component has been removed, and this is why a trader should have a foundation of knowledge about the market and an understanding of how it works, before he actually begins to trade. One used to have to monitor data with human input, and you had best be making your inputs adapt to what the fund managers were watching (i.e. usually the length of past data). If the in-crowd had switched to watching the last week and you are watching the last two months, a change would occur before you become aware.

There Is still a herd effect, in a sense. It’s self-referential in the same way that the human phenomenon would feed upon itself.However, it is much more mechanical than psychological in nature. For the most part, non-human influenced data is fixed and linear And, it all falls neatly into place. “An increase in volatility typically leads to an increase in systematic selling, which happens in an environment of reduced liquidity, and hence can produce outsized market impact” Volatility spikes lead to less liquidity and also to systematic de-leveraging, which means selling into a falling and illiquid market, which in turn drives volatility higher, and around and around. Once trailing realized starts to move higher in a sustainable fashion, target-vol. deleveraging starts and executes “passively” in the market over the ensuing days until there’s nothing left to purge."

The markets have changed and that requires an approach built on an analytical framework that is relevant to current drivers of price. Accordingly, the tools we use have to change and so does the perspective needed to understand the context of the modern market. Therefore, it is not the tool nor technique so much, but the features of the market that count and define if an idea might work. The goal should always be to figure out the game that is being played, and then play that game.

You missed my point. I am not looking for a holy grail beyond the one I believe I have and will not divulge.

But saying the obvious, money management etc is the holy grail, IMO is not sharing. A bit like Buffett saying buy only sound, well run, undervalued businesses.

Again I am not looking for anything. Just someone who does as the OP asked, or not. And not is what all the responses have been to date.

I wrote this while trading and haven't had a chance to edit; so please excuse me if it makes Joe Biden appear coherent and lucid...


I believe there are at least a few points we can all agree upon; because they are blatantly obvious to anyone who has ever endeavored to become a profitable trader. And for the most part, they are self-explanatory. 1) Adequate capitalization 2) Emotional Aptitude, which includes the requisite temperament, attitude, patience, discipline, mindfulness, and humility. 3) Risk/Trade Management i.e., traders must strive for both a high win rate and asymmetric payoffs. It is essential in trading that a high win rate is attained in conjunction with high expectancy, because the risk of ruin is a function of the loss rate. If your method does not have a high enough win rate then the risk of ruin will be greater due to the inevitability of an idiosyncratic loss or consecutive losers. As an addendum, an approach that provides quick feedback to alert the trader of failure as soon as possible is highly preferable. That being said, no matter how crude or refined a method one employs, it finally boils down to surviving against one's own incomplete intellect, a misfired bout of randomness, in controlling the risk, and in executing a set of consistent ideas day in and day out, so that chance can prevail.

Perhaps another fact we can all agree upon, is that there isn’t one correct way to trade, nor one correct approach to the market that will afford you the best chance of coming out a consistent winner. A lot of that has to do with the fact that no two traders are exactly alike. Allow me to generalize and classify the 3 main types of traders. 1) Those who don’t know anything, or have a very limited understanding about the markets. 2) Those who think they have an understanding of the markets; but are unable to recognize their lack of relevant knowledge. And, 3) Those who understand how the markets are structured, how they function, and who drives price.

In a very generalized manner (once again), the markets are still the same as they were in the past. Markets go up and they go down, they back and fill, and risk and uncertainty is still a fundamental reality in trading; and just as in the past, the best we can hope to achieve is an incomplete, but probabilistic knowledge of that environment. However, today’s markets have evolved considerably from past markets. Not the least of the reasons why they have changed is the shift from active to passive investment, and increased AUM of strategies that are on “autopilot” There are still decisions being made by humans; by active value investors, and the fundamental/discretionary crowd, but their influence on price has dwindled dramatically. ~90% of trading volume comes from Quant, Index, ETFs, and Options.

Back in the day, the market used to work something like this. The market had been moving in a certain regime, and sooner or later a fund manager would get the inkling that a change was afoot. His action or inaction would disseminate exponentially to others, and then the regime would change. The key to keeping up with this was to know what the fund manager was keying off of, and then following that signal. So, back then 2 of the most important things that counted with regard to markets were sentiment and momentum. That is, it was all behavioral, and reasonably efficient. Sure, they would like to comment on fundamentals, but the fundamentals were only important because they influenced the behavioral.

.A great deal of the human component has been removed, and this is why a trader should have a foundation of knowledge about the market and an understanding of how it works, before he actually begins to trade. One used to have to monitor data with human input, and you had best be making your inputs adapt to what the fund managers were watching (i.e. usually the length of past data). If the in-crowd had switched to watching the last week and you are watching the last two months, a change would occur before you become aware.

There Is still a herd effect, in a sense. It’s self-referential in the same way that the human phenomenon would feed upon itself.However, it is much more mechanical than psychological in nature. For the most part, non-human influenced data is fixed and linear And, it all falls neatly into place. “An increase in volatility typically leads to an increase in systematic selling, which happens in an environment of reduced liquidity, and hence can produce outsized market impact” Volatility spikes lead to less liquidity and also to systematic de-leveraging, which means selling into a falling and illiquid market, which in turn drives volatility higher, and around and around. Once trailing realized starts to move higher in a sustainable fashion, target-vol. deleveraging starts and executes “passively” in the market over the ensuing days until there’s nothing left to purge."

The markets have changed and that requires an approach built on an analytical framework that is relevant to current drivers of price. Accordingly, the tools we use have to change and so does the perspective needed to understand the context of the modern market. Therefore, it is not the tool nor technique so much, but the features of the market that count and define if an idea might work. The goal should always be to figure out the game that is being played, and then play that game.

This is so eloquently put, I intend on reading this post over and over again. It is packed with information that needs to be combed out / siphoned and analyzed for the precious nuggets of knowledge. Thank you so much .

I I may ask, how or where does AI play into this whole market ecosystem, for the lack of a better word?

Don't understand these posts.
I thought the thread was on whether or not one would share one's holy grail and why or why not ?