Super,
Interesting
analogy you use with sports athletes of past eras not being able to cut in the
modern age. Here’s my take on that for what it’s worth…
Whatever
situation you take, it has always been, and will always be, that in order for a
certain group of traders to make money then the majority must lose. That’s
basic stuff and applies directly to the althetic analogy – how many
athletes do history remember out of all those that have ever taken part? Not
many…
I think that
to say that “Babe Ruth and Jim Thorpe probably wouldn't have been
much of a force in today's world” is
actually probably incorrect. Yes, there were different techiques, training and
technology in the old days. But what if…what if, we had a teleport
machine at our disposal and zapped those old guys forward to our day and zapped
modern day heros like Johnny
Wilkinson and Steve Redgrave back to their days? Sorry if you don’t know
who they are but I’m a Limey and I have to give honourable mention to our
own legends!
If you compare
apples with apples on a level playing field and remove all the external
influences on a participant, be they in the sporting or trading arena, I think
you will find that legends will still be legends. Give Babe Ruth access to all
the modern day techniques, etc and I bet you he would still have been a hero…it’s
just he would have whipped everyone’s ass with even more skill !! Take
away Johnny Wilkinson’s modern
day training ground and he STILL would have drop-goaled the Aussies in the rugby
World Cup final…! Why? Because at any given time, the techniques
available to one are generally available to all…it’s the
application of those techniques and skills that counts, not the details of the techniques
themselves. Getting one up on your current competitors is all that matters…tomorrows
competitors are not relevant.
It may be a
bit pedantic of me to take issue with your simple analogy, but it does actually
re-inforce what you seem to suggest. The real danger now is in the OVER-use of
technology. What sets a successful trader or sportsman apart from the crowd is
mainly comprised of self-disipline, guts, instinct, sheer determination and an
unstoppable will to succeed. These are all things that lie within and can
be found neither on a training ground nor a computer screen, no matter how good
the algorithm.
I got
(politely) taken to task recently for voicing an opinion on a strategy that I
have found reasonably successful…one that involves “traditional”
methods of multi-time frame analysis, basic trend recognition, indicator
divergence and an appreciation of the overall macro-economic situation. I was
told that instead of all that “a
successful trader today needs sharp trading tools”. Well I disagree with
that statement…what a successful trader needs today is exactly the same
as what a successful trader has always needed – a sharp mind, not sharp
tools. You can give sharp tools to the village idiot and he will eventually cut
his hand off!
In summary…it
seems to me that the “crowd” is doing exactly as you say –
they are moving to products like MS in the search for a holy grail and ending
up with indicator fascination/paralysis. Just like they trusted their fund
managers in the 80’s and 90’s, now they are moving instead to trust
that buy signal on the latest black box plug-in they bought. Well rather than
follow the crowd I would rather stick with simple tools that I understand inside-out
and spend most of my time focussing on how I can use them the way they were
meant to be used.
So I think we
agree with eachother?!
PS, no
responses from Aussies about the present day state of the English rugby team
please!!