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grimkhor t1_jdyqsla wrote

So let's put it like that. The most successful trading company ever lead by Jim Simons and a bunch of actually very very smart people could produce a reliable 50.75% win rate and made insane returns with that. Everyone else is extremely likely way worse. Don't ever think it's anything but a casino if you're trading.

Your best bet is actually finding some arbitrage opportunity in a niche which are the only "traders" that are actually successful and pray it never goes away.

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Aimadness OP t1_jdyv5ue wrote

I like extracting value, wherever I find it. .75 was all it took. How? Volume?

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grimkhor t1_jdyweu0 wrote

>As described by Zuckerman, Medallion’s strategy involved constantly opening and covering thousands of short-term positions, both long and short. According to Robert Mercer, one of Medallion’s key investment managers, Medallion was right on only about 50.75% of its trades. Nonetheless, he stated that taken over millions of trades that percentage allowed the firm to make billions. It is worth noting that engaging in millions of trades suggests that the transaction costs would be significant. The fact that the reported gross returns are after trading costs, makes Medallion’s performance even more extraordinary. It also implies that Renaissance was apparently particularly effective in minimizing such costs.

If you can actually reliable make 50.75% of your trades successful all it takes is making enough trades and reducing costs. The moral of the story is anyone who talks about a 50.80%+ success rate is lying to you. I would go even further and even say the ones talking about a 50%+ success rate are probably lying.

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terrytibbs76 t1_jdzsjbl wrote

I don’t know much, but if you can reliably bag a net 10% return annually you’re essentially winning big.

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grimkhor t1_jdzspra wrote

That's buying the S&P 500 over the long term. Trading is about being successful on trades and scaling it with volume. If you trade to get the S&P 500 return stop trading brother and become a long term investor.

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terrytibbs76 t1_jdzsxsx wrote

My bad, thought it was slightly lower than 10. My point was reliably beating S&P would be a win.

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grimkhor t1_jdztp5o wrote

>The historical average yearly return of the S&P 500 is 10.326% over the last 20 years, as of the end of February 2023.
>
>The average annualized return since its inception in 1928 through Dec. 31, 2022, is 9.82%.

No problem here are the actual returns.

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