Although I'm very skeptical about those patterns, because there could be someone trading back and forth to create those trends, and screw you when they want.

Anyway analyzing data and gaining money with it makes really no sense at all. Surely you can make money to live, but there is no point to it until you really are able to win big, and nobody does. Investing money where real business create economic activities that are in effective demand, maybe. But trading numbers, that's really an awful thing.

This is one of the services the market provides. It creates uniform price conditions across time and space. If there is a discrepancy that doesn't make sense (like a recurring profitable pattern in stock prices), you can make money by fixing it.

"Trading numbers", as you call it, is (through a layer or two of indirection) helping to establish true prices, transmit market information, provide liquidity, etc. All of these things are critical for "real business" to operate efficiently in a large economy. The abstract markets create huge value for "real business" and its users charge a small percentage of the value created.

Problem is, those patterns do exist, but they are chaotic behaviors, and transition probabilities are already priced in. So that, for a non-causal analyst looking at past data they look very reliable, but for somebody with no forward knowledge, they are useless.

Or, in other words, the way those market analysis courses and gurus teach people to read the market. The patterns are very reliable if you ignore causality.

Past performance is no guarantee of future results.

Works 60% of the time 100% of the time.

>Definitely. Discipline is tough when somebody just demolished your chinese solar stock and you are down a week's earnings. The bot would've cut and run.

What stopped you from cutting and running in that case? Was it the hope that the stock would swing back?

I believe you have to experience this yourself, since this is about emotions, bias, and insecurity. Everybody only has a sample size of one with this.

I can say that I found it very similar to playing Poker. In both cases you need to conquer your emotions and biases and simply follow the damn strategy. In both cases, the edge cases will make you constantly doubt your strategy.

> Nearly a decade ago, Warren Buffett made a million-dollar bet: that by investing in a completely unmanaged, broad-market low-fee index fund, he could beat the gains earned by a high-powered hedge fund with a team of managers at the helm. His opponent was Protege Partners, LLC, a New York City hedge fund with $3.5 billion in assets under management.

[...]

> His simple Vanguard S&P 500 (VFINX) fund has delivered returns more than 40 points higher than those of the hedge fund. “I believe this is the most important investment lesson in the world,” he said.

> Pity the active fund manager.

> More dollars have flowed to index strategies that track a market benchmark, such as the S&P 500 index, partly because such funds typically have lower costs than active funds and more investors believe that stock-picking managers can't regularly beat the financial markets.

> Now a new Morningstar study, released this week at the Morningstar Investment Conference, finds that actively managed funds lagged their passive counterparts across nearly all asset classes, especially over a 10-year period from 2004 to 2014.

Another way to describe the problem is, given the same number of bots, randomly picking tades, as members of a trading forum, how many would beat the index? Is the number more than 3?

He is a good data point to demonstrate that long term investors can beat the indices. Most don't, however, and it is my understanding that day trading is even worse. Just as there are professional poker players that can consistently make money, I'm sure there are some day traders that do very well, but it is not a skill that most people have.