HOW exactly are you doing money?

[steven1976]

Is money not the simplest ofedge?

If for example there were only two people in a market and player A has 500 pounds and player B has a million. Player B is more likely be able to push against player A and hold a price long enough for player A to panic and sell. Add in a bit of self matching and your laughing. You don't know the final result but you could put pressure on people to make mistakes.

[Golfer]

Xitian's post is very good. If you crunch the numbers of that kind of return over that period of time the probability will show that it's almost impossible to be simply luck.

HFT firm Virtu have suffered one losing day in 5 years.

I suggest that nothing we post up will change your mind initially but you will need to do your own research and play around will the probabilities.

[marksmeets302]

Would you like to post some of those evidences?

The most well known critique is that the distribution of stock price returns is not normal, has fat tails etc. This anomaly seems to hold for all types of stocks/index/bonds/commodities and on all time scales. Should be easy to find if you google for it. If you google for Edgar Peters, he has demonstrated convincingly that the markets do exhibit long term memory.

Making money from this wisdom is a different matter, but Fama's random walk theory is definitely flawed.

[Thisisgambling]

I must admit that I do see Thisisgambling's point of view. Or rather I can understand how someone can have his point of view. But there is a lot of evidence to show that the efficient markets hypothesis is not true. It may be true if you were to bet or invest randomly, but not if you use specific information to determine your decisions and/or look at different time horizons.

As Dallas has mentioned, the evidence that you have an edge is shown in your P&L. Yes, your profits could be luck, but if you look at many of the professionals on this forum I'm sure you'll find that their daily P&L is nearly always positive. I'm profitable about 360 days of the year. How can that be luck? I've maintained that record for over 5 years. As soon as I'm unable to maintain that record I'll know I've lost my edge and I'll stop trading.

Perhaps you could argue that I'm running some crazy risky strategy where I could lose my whole history of profits in one go, but that just isn't true. In fact my daily return is about 2% of my bank (the most I can possibly lose because that's what I have in my account), so it takes me about 50 days before I've earnt as much as the size of my bank (and then can be withdrawn and never lost again). Now given I've been running for around 2000 days now, the chances of that being luck are just so incredibly miniscule that I'm willing to put money on it

I can show you a graph of my PnL if you like, but I can tell you it's a virtual straight-line trending upwards.

I think Thisisgambling is arguing from a financial markets point of view, where it is much more rare to get consistent returns, especially if you're talking about fund managers and medium to long term investment. However even in the financial markets you'll find people who can manage incredibly consistent returns such as with high frequency trading or statistical arbitrage. I've heard of sharpe ratios up in the 10s, which is what I'd expect from a sports trader.
The efficient markets hypothesis just isn't true. And I suspect the people who know this are the ones busy making money rather than writing papers about it.

Very good, its a lot better than posting memes and other irrelevant stuff.

How can one person win the jackpot of 100 million dollars on "fortune 3000"?

Please post your graph, i would like to see it.

This is making me a little bit confused but "you guys" want sports trading to look just like real trading. Now on the other hand do you not want it to look at real trading. Fama's work isn't on sports trading so this is a flaw.

Edit: Are you using a program like betangel and betfair when you are trading and have you done so under those 5 years? Or do you work on a exchange/bookmaker (and thereby have unique information).

[xitian]

Here's another analogy:

I tell you I can flip a coin 100 times and get heads 99 times. I proceed to do so. Do you:

A: Class me as very lucky!
B: Think the coin is bias
C: Think I have skill in flipping coins

Now surely you wouldn't say A? It's either gonna be B or C (which means I have an edge). And even though the theorists will tell you that a coin flip is 50/50, there's a lot of difference between theory and reality.

You can disregard evidence of an edge by calling profitability luck, but you can't use the same argument about consistent profitability. The likelihood of consistent wins is just too unlikely to be luck.

But in the same way that you can't expect a magician to tell you how he did his magic trick (which he's spent years learning), you can't expect successful traders to give away their edge. That doesn't mean people aren't helpful in this forum if you ask the right kind of questions though.

[Euler]

Fifteen years ago when I announced that I had found a way to profit form betting on sports, nobody believed me. Fifteen years on, still nobody believes me

[marko236]

I remeber watching one of Peters videos about entering the market at random, if you enter the market at random you will win 50% of the time and lose 50% which after commision you will lose a little money.

Good traders can read the market good enough to do better than random and make money.

[xitian]

How can one person win the jackpot of 100 million dollars on "fortune 3000"?

Sorry, I don't understand the question.

Please post your graph, i would like to see it.

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I haven't maintained my cummulative P&L chart in years now. I've removed the absolute figures, but from the chart you can look at relative performance several years ago.

This is making me a little bit confused but "you guys" want sports trading to look just like real trading. Now on the other hand do you not want it to look at real trading. Fama's work isn't on sports trading so this is a flaw.

I'm sure there are people making consistent profits on the financial markets as well (as I mentioned in my last post), but the ones who are making the consistent returns are institutions with the money, brains and hardware. Sports markets just aren't big enough for (most) institutions. I haven't ruled it out as a potential area to investigate, but I would expect ROI would be much lower and less consistent. On the flip side financial markets would be more scalable. But I'd be amazed at getting 10-20% ROI a year (unleveraged) in financials versus 2% a day in sports. I have found sports markets tougher in recent times though.

Edit: Are you using a program like betangel and betfair when you are trading and have you done so under those 5 years? Or do you work on a exchange/bookmaker (and thereby have unique information).

I started long ago with BetAngel software to get a feel for the markets. I also went on Peter Webb's introductory course (no affiliation!). I then wrote my own software shortly after that. I still use BetAngel to monitor the markets sometimes. I did play around with BetAngel's Excel features at the start though as well.

[steven1976]

Fifteen years ago when I announced that I had found a way to profit form betting on sports, nobody believed me. Fifteen years on, still nobody believes me

I bet your Mrs has changed her tune.

[Thisisgambling]

Here's another analogy:

I tell you I can flip a coin 100 times and get heads 99 times. I proceed to do so. Do you:

A: Class me as very lucky!
B: Think the coin is bias
C: Think I have skill in flipping coins

Now surely you wouldn't say A? It's either gonna be B or C (which means I have an edge). And even though the theorists will tell you that a coin flip is 50/50, there's a lot of difference between theory and reality.

You can disregard evidence of an edge by calling profitability luck, but you can't use the same argument about consistent profitability. The likelihood of consistent wins is just too unlikely to be luck.

But in the same way that you can't expect a magician to tell you how he did his magic trick (which he's spent years learning), you can't expect successful traders to give away their edge. That doesn't mean people aren't helpful in this forum if you ask the right kind of questions though.

Are you serious??
IF this is serious am i out of words.

edit: I seriously don't even think most of you guys will understand the question if you don't have very basic knowledges, no offense.
There have been some good answers however and i would still appreciate some kind of studies which proves Fama wrong.

[marko236]

I think we have a new Jeff, this could go on for months

[Thisisgambling]

I think we have a new Jeff, this could go on for months

Or you prove me wrong. Seriously i would love to be proven wrong.

[Euler]

You are wrong, you said we were all incredibly lucky. We are not, that is beyond doubt, even Mr Fama would have to agree.

[Thisisgambling]

You are wrong, you said we were all incredibly lucky. We are not, that is beyond doubt, even Mr Fama would have to agree.

But that is not enough to prove somebody wrong.

And when the most serious in the thread are starting to talk about edge in coinflipping do i get scared.

[LeTiss]

I think that guy is Jeff Waters

His writing style, the manner of the questions and already 13 posts after only registering yesterday

Ferru is dead, long live Thisisgambling