Any good "systems"?

[TimTimSalabim]

As a follow-up to the thread on day trading, do you any of you have what you think is a good "system" for doing day trading/commodity trading/stock options trading? I know there are a lot of highly publicized systems out there (Ken Roberts, Wade Cook, etc.), but do they work in anyone's experience? Or do you do your own analysis?

[gilly]

In my oppinion there cannot possibly be a "system" that works for the simple fact that if there was such a system, people knowing about it would cause the system to no longer work.

I know most people on this board will disagree but I do not think you can "predict" what the stock market will do.

[Wildbill]

I will continue to predict the market goes up. Just not saying a timeframe [img]/forums/images/icons/smile.gif[/img]

I think you should clarify your statement because inevitably, whether its next week, next year, next decade...the market will go up. As long as the economy grows, the market will have to go up at some point. As for short-term, sure its not the easiest thing to predict. Just don't forget that it doesn't take much of a positive percentage to beat the market, just being slightly more correct than average and your returns will be quite far above the market, especially if you leverage your gains.

Systems do work to a degree, but nothing is that easy. They tend to degrade after awhile so no one should enter into trading thinking they will find a nice system and milk it for long. The best traders don't rely on one system, nor just "system" thinking. Traders create systems based on analytical thinking about the market backed by proof that the market indeed acts the way they believe it does. Of course they aren't always right and of course one always has to remember the fact that every investment does get driven somewhat by external forces such as news or basic economics, but a hard working person that keeps an open mind and relies merely on their instincts and big picture thinking can beat the market for modest amounts. Its just like sports betting or poker, while many think they can do it, very few can and even far fewer can do it for the blockbuster amounts that draw in the masses to day trading and the like. If you accept small wins and take your losses at reasonable amounts, no reason why you can't end up ahead over a period of time.

[gilly]

The market does go up in the long run, that is true. But like Keynes said "we are all dead in the long run".

As for the stock market being predictible I do not believe this to be true. I am not saying that one cannot make money in the market it is just that trying to predict short term movements in the market is for the most part futile in my opinion.

[Wildbill]

Well I have said that before most daytraders or even serious part timers tend not to try to trade the market itself. Individual names or commodities work alot better, you get a much more focused pool of players and that means more predictable behavior. With the various ways to trade these days, commission and market costs are very minimal so even picking up a 5 cent move can be a nice "single", whereas in the not so distant past with fractions and lack of internet platform trading you had to hit a pretty nice move to bag a profit. When dealing with such small moves predicting the market isn't really what you are doing. You are basically predicting sentiment and where the money is at any particular moment. Sure its not easy and many don't make it long, but its a not impossible and the disciplined trader that pays careful attention to their market at all times can pick off these quick moves numerous times a day and end up a modest winner.