Comments on: Basic Trade Analysis http://www.RayAcayan.com/trading/basic-trade-analysis/ A Geek of All Trades Tue, 27 Oct 2009 13:50:17 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: Ray Acayan http://www.RayAcayan.com/trading/basic-trade-analysis/comment-page-1/#comment-92 Ray Acayan Sun, 03 May 2009 13:54:35 +0000 http://www.rayacayan.com/blog/?p=816#comment-92 QuantPlus, I agree with your comments regarding quant trading on an intraday basis. However, they are not relevant to this particular blog. Here, I am mostly referring to "swing trading" which I use interchangeably with "investing" due to the longer timeframes involved. This may not be clear from the article, but my example uses a *daily* chart as well as 50-day and 200-day moving averages. Daily charts spanning several months are not as relevant in your short-term intraday trading with 400 trades per day. Similarly, your bid-ask spreads are simply irrelevant to most swing traders and long-term investors. You also mention the number of trades you make, which is also irrelevant in terms of the amount of money you actually make from trading. There are infinite ways to make money from trading and investing. If you have discovered only 2 of them, good for you, but you may want to expand your knowledge a bit more. QuantPlus, I agree with your comments regarding quant trading on an intraday basis. However, they are not relevant to this particular blog. Here, I am mostly referring to “swing trading” which I use interchangeably with “investing” due to the longer timeframes involved.

This may not be clear from the article, but my example uses a *daily* chart as well as 50-day and 200-day moving averages. Daily charts spanning several months are not as relevant in your short-term intraday trading with 400 trades per day. Similarly, your bid-ask spreads are simply irrelevant to most swing traders and long-term investors.

You also mention the number of trades you make, which is also irrelevant in terms of the amount of money you actually make from trading.

There are infinite ways to make money from trading and investing. If you have discovered only 2 of them, good for you, but you may want to expand your knowledge a bit more.

]]> By: QuantPlus http://www.RayAcayan.com/trading/basic-trade-analysis/comment-page-1/#comment-78 QuantPlus Sun, 03 May 2009 04:05:03 +0000 http://www.rayacayan.com/blog/?p=816#comment-78 As a Quant who makes > 100,000 trades/year... most of this is nonsense. You would have to be deprogrammed before you could build a successful trading enterprise. There are EXACTLY two ways to make money trading: (1) Exploit the bid-ask spread. (2) Exploit a "market inefficiency". In addition, since this is common knowledge among Pro Traders, you must have some sort of "competitive advantage". Discipline matters ONLY after you have the other pieces in place... and, in fact, can be a dangerous thing. Using "discipline" to lock yourself into a sub-optimal, mechanical strategy is virtually defines the Amateur. Experienced Pros are highly flexible withing a general framework... and it's their hard-earned judgment that separates the 2-3% winners from the 97-8% losers in ANY Zero Sum Game. As a Quant who makes > 100,000 trades/year… most of this is nonsense. You would have to be deprogrammed before you could build a successful trading enterprise.

There are EXACTLY two ways to make money trading:

(1) Exploit the bid-ask spread.

(2) Exploit a “market inefficiency”.

In addition, since this is common knowledge among Pro Traders, you must have some sort of “competitive advantage”.

Discipline matters ONLY after you have the other pieces in place… and, in fact, can be a dangerous thing. Using “discipline” to lock yourself into a sub-optimal, mechanical strategy is virtually defines the Amateur. Experienced Pros are highly flexible withing a general framework… and it’s their hard-earned judgment that separates the 2-3% winners from the 97-8% losers in ANY Zero Sum Game.

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