Oct

21

Say someone discovers one day any one method to markets that can be proven to be consistently superior than any other method. Such a hero would be able to then trade the superior method for what it is alongside doing anti-trading or doing the opposite of what the inferior method is suggesting. This would create a guarantee of profits, consistently.

With a risk-free approach now under the belt, this gent can begin to borrow at rates closer to the risk-free rate or at least at the best rates at which anyone other than the Government can borrow. This leverage would expand profits & the ability to extricate more profits positively.

At some point this gent would clean out every one. Market will be shut down for the lack of any counter party or capital left with anyone else.

Thus for a method to exist, any method in fact, that is consistently superior than another method the market cannot exist, for long. A nullity arises. Therefore such a proof will never be found. Everyone has to undertake some form of and some amount of risk therefore.

One would thus argue that its futile to argue if any school of analysis or trading markets is superior or inferior. Each has to navigate oneself through the markets without gravitating ever to debilitating losses. To each his own. A pair of mind and its method together make for a unique apparatus in the markets. Comparing uniques is futile.


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  1. Anonymous on October 27, 2019 8:47 am

    I think there are a few assumptions that are far from proven in your hypothesis.

    First of all, that the superior method is essentially counter trading the inferior method turns methods being into a binary response to a certain situation at a certain time. While real life is much more than that, raging from size, side, different market selection etc.

    Now if we go back you said that the superior method is one that can be “consistently superior than any other method.”
    What if we took 2 trading methods, one A and other A’ which is the opposite of A. For our superior method to outperform both A and A’ it couldn’t possibly counter-trade both of them at the same time so the superior method has to go alongside the inferior method at some point.

    You also assumed that the superior would wipe out anyone else. Let’s take the case of a passive investor who averages in into an index fund. How could a superior method wipe out such a strategy?

    In the end you concluded that because this “consistently superior than any other method” cannot exist it also means that we cannot compare any 2 methods which I think it’s quite a stretch.

    Anyways, I think your hypothesis was interesting and it really got my mind going. Hope you don’t take my opinion at heart and best of luck in the markets!

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