Topic: Here we go again, another major price drop for bitcoins - page 3. (Read 23164 times)

And, as you admitted, arbitrage opportunities.

"Alpha" is a very commonly used, and precisely defined quantity.  That you haven't heard it before doesn't infer a lot of confidence in your argument.

I'm sorry, but this is getting retarded.  I'm out.

No. I'm saying that there's no such thing as "alpha" in FA fund management or TA scams. Do you agree? Your own list of "alpha" examples brought up insider trading, uncovering dirt not known to the larger market etc.

Btw, when you talk to someone who studies actual research papers using terminology from get-rich-quick books doesn't infer a lot of confidence in your argument

Oh, I missed that other rule you've laid out.

Is your argument then that the search for alpha is just so hyper-competitive that only the wealthiest, well-equipped of fund managers will ever get to it first?

If so, I'd still argue differently in the case of markets with capitalizations so small that big-time funds can't play them.

Can everyone make money on arbitrage?
Is there a guaranteed window of opportunity where you can lock down the trades?

Now go back to the earlier posts I did in this thread and ask yourself why I already back then suggested doing colocated HFT as one way you indeed can make money on a market. It's not however part of what the FA fund managers and TA scam artists claim that a successful trader does when outperforming the market The so-called "skill" that never turns up in any documented research.

I already pointed out the example of arbitrageurs, but dexfor seems to think what they do is "cheating".  Not exactly sure why.

I was prompted a few days ago to have a look at my trading history on TH from when I started a few months ago (purely out of interest).  Over three months and 300+ trades my buy price is 10% lower than my sell price, and that's been pretty consistent, and not on trivial volumes.

A lot of trading I have done arbitrages between currencies and exchanges, and on occasion there have been opportunities to take USD1 per BTC out of the market.  Not much to do with chance there - more to do with people, their beliefs and insecurities.

Successful trading lesson 1:

1) The markets do not operate by chance.

No. Actually there's none.


Adjusted for inflation, no.

I think I understand now. I am pretty sure you are in the second category of investors... I have read almost every "investors guide" which is available and frankly I have never even heard of this Douglas Adams...  I suggest you take some time to research better advice and read a few more books before making your mind up... In particular I would recommend http://www.amazon.com/4-Easy-Steps-Successful-Investing/dp/038097472X/, this is a good all-round introduction for novices, and it has served me well.

Man... Let me try one last time, for this I will borrow from Douglas Adams. He wasn't talking about investing, but I think the analogy will hold.

Imagine a little puddle of water wakes up one morning, looks around and thinks: Wow, I must be a really special puddle, because look, someone has gone to the trouble of making a hole in the ground into which I fit perfectly!

It is incontrovertible that the puddle fits perfectly in the hole, but there's nothing special about it. If there wasn't a hole, there wouldn't be a puddle to make the claim.

Now, you may think your special powers of analysis are what separate you from those who don't understand. But that is exactly what everyone thinks. And as has been demonstrated with the dartboard experiments, out of any given population, there will be some who will outperform, some will underperform, the curve is fairly well established here.

Take heart, though. If the variables were knowable, the whole market idea thingie would have collapsed decades ago... because someone would have written the book and... oh well, head and wall all over again.

There may not be any evidence of God or beating the odds at a casino or astronomy, but there are THOUSANDS of pieces of evidence for the effects of intelligent investing. These pieces of intelligence are in my banks vault. Actually banking is a good point. I let the bank look after some of my money. They invest it and GUARANTEE a modest interest rate of a few percent a year. Banks around the world all work the same way. How is that not PROOF? If it was all "random chance", these banks could offer no interest at all.

Again, there are A LOT of dummies out there who play but don't UNDERSTAND like some do. Perhaps the losses of these dummies means cancel out the profits of the more shrewd investors. That does NOT make investing a "random" process.

If you have more money in the market than what you have cashed out and spent, you haven't beat the market yet. The game ain't over.

There are millions of books on god, on how to beat the odds at the casino, on astrology and on any number of things for which there is no evidence.

Once again, what defxor is saying is that all those thousands of dollars you make EVERY WEEK are precisely in line with what would be expected out of a universe of traders all trying to make money.

Wall, meet head... head, meet wall.

This is a ridiculous claim. I make thousands of dollars EVERY WEEK simply by playing the stock market, not to mention the fortune I will make on bitcoin. I'm obviously not going to disclose my methods ( ), but I can assure you that it has nothing to do with "random chance". Go into any bookshop and you wil find many books on how to invest... I myself am thinking of writing one. Why would there be so many books on this topic it if it wasn't possible?

There are two sorts of people... Smart guys, who know the system after years of study. And then there's the primitive guys that don't quite follow what's going on. They look at the economy, but it is too complicated for them, so they just think everything happens randomly...

... and there's no support for the hypothesis that anyone has ever beaten the market trying to do that. That's the whole point. A lot of traders claim they do, but every time (plenty) anyone has looked into this it turns out that there's no predictive ability involved and the number of traders who beat the market is the same as is predicted by chance alone.

If you're really interested there's a lot of literature on the subject available. Taleb's "Fooled by randomness" is a great start.

The chance that, out of the entire universe of traders, the precise number who beat the market should beat it. If there was such a formula you'd have EVERY trader beat the market.

The best a trader can claim is that, within the realm of chance, he or she is the one that consistently achieves these results. But the point being made is that if you had a similar number of monkeys as you do traders, and they based their decisions on throwing darts at a map, you'd consistently get a similar number of monkeys beating the market as you do traders... so there is nothing statistically significant in having analysis charts versus throwing darts at a map as a strategy.

And actually there is a Nobel Prize for this, if you were to be able to prove it. It's called the Nobel Prize for economic science (bit of a misnomer there).

> There's no data set in which a trader has ever outperformed chance. Ever.

To know this would require knowledge of all details of every trading decision ever made.  Obviously you don't have such knowledge, and neither does anyone else.  So why do you keep stating stuff as fact when everyone knows that you are in no position to know that?  As an aside, can *you* actually define precisely what "outperforming chance" means?

> If you want to claim differently I urge you to source that information. Please.

Many people have given your examples of how you can beat the market.  e.g. investigating company fundamentals that others haven't noticed e.g. spotting patterns that nobody else has.  Contrary to what you claim this is not illegal at all.

> There's still a Nobel Prize waiting

No, there is no Nobel Prize for beating the market.  You would also not win a Nobel Prize in economics for beating the market, because you would not be showing anything surprising.  There are no serious economics who believe that markets are 100% efficient.  Highly efficient, maybe, 100% efficient, no.

Your claim is that there is no statistical pattern in any data and that all information about all companies is spread across the whole market.  This is an extraordinary claim that I don't see you backing up with any data at all.

I don't think you understand the qualitative difference between actual research and people's beliefs

There's no data set in which a trader has ever outperformed chance. Ever. The only way to do so is to not base the trades on available market data - which is usually referred to inside trading or other forms of manipulation.

If you want to claim differently I urge you to source that information. Please. There's still a Nobel Prize waiting

Please explain to me how exploiting arbitrage opportunities or uncovering fraud and market manipulation is cheating?  They're certainly not illegal.

Read the article kjj posted.  I promise you it'll clear everything up.

For anyone looking for a laugh I strongly recommend reading through bonker's posting history There's some really well done trolling in there.