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Comment by sireat | Hacker News Reader

I mean it is possible that the model could work for someone with access to more capital and better fee structure than OP making $50 bets.

Still, this seems like a model that will likely work about 95% then fail on outliers ie "picking pennies in front of a bulldozer" model.

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The nice thing about QM is that 1 tick is a 12.50 dollar move. So its easy to cover fees. Today those were $50 profits. 2 shares moved 2 ticks. I use stops and limits of course. So my risk was about $100. Its not the same as options.

A strategy that goes long or short QM doesn't have an asymetrical return profile. I.e., it isn't "picking up pennies". An example of that is selling options.

Thanks HockeyPlayer spot on.

I think you misunderstand, what you're doing is even worse than picking up pennies, your strategy just boils down to punting futures with no hedge or any form risk management to your open position. You're just gambling on coinflips. If you backtest your "model" you'll find that external macro event induced crude oil moves will completely wipe you out because you have no hedge against them.

Your are correct about no hedge agains outlying macro events. But I'm not suggesting using this without any other variables in your trading decision. It may help make a trading decision.

Also you should always place a stop and limit order. So you don't get completely wiped out. Its very common.

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