| Let me tell you about the time I caught the "finance bug" after watching Wall Street film in 2007. I had a near 99% accurate scalping system. I could not believe it. Every trade I was making was profitable. How could this be? The system worked without a stop loss. Meaning 1% of the time the prices turned, it wiped out all the profits (limited reward) accumulated. I published all of these details on my university homepage which has since been deleted as they won't let alumni's keep one. But I was very careful that while 99% system accuracy is achievable, it's the downside risk that makes the system pretty fucking useless. Of course you can put a stop loss but the system ran on "limited rewards unlimited risk". There's just no holy grail out there. Even if you read Hull's options book, no matter how complex your option strategy gets, you always have to be right at the end of the day. It's pure speculation and we all know how casino's work. So knowing this, if it sounds too good to be true, there's a very strong reason for it. Retail trading is a zero sum game. Even more suspicious when the downsides are conveniently left to "if I gave it away system won't work". I was fully transparent about the downsides when I published my trading system. The last thing I wanted was to people without the financial literacy to naively believe that a holy grail trading system existed. They don't exist. History is filled with funds that blew up because they believed alpha generation would be a constant thing. Even quant trades I question their success. In the long run, all trades are speculative and carry risks (except arbitrages which are automated to oblivion). No matter how sophisticated you get the risks are always unknown. |