Opportunities for One Big Score!

Good discussion

I think the answer lies in the original question, if I may, in all respect, reformulate it a bit:

1. Swing big lots around. Have some success.
2. Get education.
3. Encounter challenges.
4. Blame challenges on the market.

To me this smells of an underlying assumption that the game should be easy, and if it's not easy, it's not because of me. But why should it be easier to make it as a professional trader than, say, as a professional golfer? No reason at all, in my view.

A better assumption would be "The game is easy. I just haven't figured it out yet."

As to "One Big Score", I'd like to quote Aristotle:

When i first started trading in 2008.. I was experimenting with nanningbobs 4hr reversion strategy with the sixth's indicator. I didn't follow the rules exactly but instead used it as guide. I was adding to winning and losing positions. My largest day up was $16,000.

I started with a $200 account.

I find the most "educated" i have become the more i've been sucked into some kind of joke..misinformation for retailfx.
My largest profits come from trusting my intuition not necessarily set MM or mechanical rules..

Nicely put. Reminds me of the recent Labour electoral defeat when one of the MPs said, it's not us, it's the electorate. They've changed.

nothing to more to say!

Thank you

Good comparison. The Labour leadership was more in touch with their own ideas about themselves, and with their ambitions, than with their electorate, which they didn't really understand.

Similarly, in trading, those that don't make are more in touch with their own greed/ambition, and their ideas about themselves, than with the market, which they don't really understand.

Thank you

Maybe there's something to say about Miller's second statement on vanishing opportunities. Is that based on belief or evidence? Academics have for decades claimed that consistently profitable short-term trading is impossible, yet a few people persist at it as if the market were a "riskless money machine". Clearly he's wrong.

I for one do want to read too much into his second statement yet I feel compelled to respond, and I freely admit the only things I've read from him that I know about are in this thread. You make a good point about "Academics" and clearly given E's quick bio of him, I'd say he qualifies as an Academic. I have 2 thoughts on his statement (and I guess your reply post):

any state of affairs that will allow traders of any market instrument to create a riskless money machine will almost immediately disappear.

1. I interpret this as there being an almost risk-free glitch in the matrix, maybe some sort of arbitrage opportunity that shows itself momentarily and those who are lucky enough to be there to see it, get to get in on the action, but once it shows it's head, it's gone, the market right's itself - maybe a reversion to the mean.
2. Certainly there are traders who have developed their edge and their process to be able to risk capital in the market on a consistent basis and come out ahead, as you mentioned. I look back at what I was taught when I was in school and it was all - Efficient Market Hypothesis, Markowitz, Efficient Frontier, Modern Portfolio, the impossibility of profitable short-term trading, etc. I feel like we are doing student's a huge disservice by presenting this as financial gospel. I'm not saying that some of it isn't valuable, but it's also not the be all end all.

The streets are paved with gold my friends. Hope everyone had good trading today.

Good points, and I agree, but let me for the sake of conversation add some comments.

First, my interpretation of Miller's statement coincides with yours. The reasons I believe it's false, and always will be are (1) market (micro)structure and (2) human psychology. And, as a former colleague used to say when someone tried to make the case that markets are like this and this is the only reason why you can/can't make profits: "There are many ways to skin a cat."

As to academic theories, my view on those is also in terms of social organisation and human psychology. The academic theories you mention arose out of the need to rekindle confidence in the markets after the 1929 crash and the following depression. Many people argued, most notably perhaps J M Keynes, that markets were rigged and that one needed insider knowledge to have any chance of making consistent profits.

The industry was in desperate need for inflows from the general public. But how gain their confidence? Ah, wait, why not, in the age of quantum mechanics and nuclear weapons, make it scientific!? Impressive mathematical formulae should impress the common man in the street (T C Mits) and, more importantly, his pension saving advisers.

Thus the academic theories were born, and they were celebrated and put into practice many years before anybody thought of putting them through rigorous testing. T C Mits was advised to put his pension savings into funds that had a prudent risk-adjusted approach to "beating the index". Nobody told him too much about the fees, but who cares when the market is booming?

Then people started testing things, and in particular the CAPM got plenty of attention, which put it seriously into question. But at that time corporate finance departments all over the world were busy using it to price things. "Shut up, please, it makes for good business."

Nowadays we have the answers. The relationship between risk and return has broken down, and CAPM is less credible than ever. Still, of course, the corps are using it! And Keynes was right. The markets were rigged and always will be - because of their social organisation, because of human psychology - and now they are perhaps more rigged than ever, in spite of recent regulatory crackdowns. For example, why aren't Citadel, Virtu and such like being investigated?