Why so many of the results of streak strategies are negative after a brokerage firm’s final income statement
The market has few inefficiencies and small profit margins.
Most “strategies” are really just coin tosses in fancy disguise. As with all coin tosses, a larger sample size inevitably leads to odds of 50%, and so are all these “strategies.”
Currently, the additional charges for each transaction (impact costs, transaction costs, taxes, brokerage fees, error trades) make this a significant negative P&L.
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So what is the solution for this?
it’s not. That’s what makes trading difficult. His 99% of things and ideas that might be tested don’t work. There is no easy way around this. Until I find something that actually works, I’ll have to test and confirm it myself.
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got it. If you expect a profit of Rs 1000, imagine you want to earn 3000+.
Excuse me Boss, what does this mean?!
I think he meant to say that if you make a profit of 3000 rupees instead of 1000 rupees you can cover all the claims you mentioned and turn your strategy into a net plus and make a ton of cash .
Gnome:
I think he meant to say that if you make a profit of 3000 rupees instead of 1000 rupees you can cover all the claims you mentioned and turn your strategy into a net plus and make a ton of cash .
ah I see…
If it helps, we pay 14% of the profit on all fees (not including impacts, slippages and errors as they can’t be accurately tracked).
The point here is that the system you follow should offer benefits that far exceed the fees. Paying more than half of your profit on fees is really not worth it.
Vivek_Naren:
Why so many of the results of streak strategies are negative after a brokerage firm’s final income statement
Brokerage fees and taxes alone shouldn’t make it a half-baked strategy. Slippage is usually what kills high frequency intraday scalpers (despite the nice looking backtest).
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Try to build strategies that reduce the number of trades at the expense of accuracy. In real trading, this will prevent trading costs from ruining your strategy. Compensate for low accuracy with a high risk reward.
Scalping and other forms of high frequency trading often end up giving brokers, exchanges and governments everything.