Noobie Question: Does this actually work? I thought alpha was very little and always fleeting so only big hedge funds generate profit from it.
Only trade when you have an edge, i.e your model suggests that there is a higher probability of an outcome in your favor rather than a pure coin toss - either in entry or in exit.
Even coin toss entries can make money if you have an edge in exits and vice versa.
All in all, you can be right less than 50% of the time per trade, and still have alpha if your winning trade is 2 times your losing trade. Standard expected value stuff. Heck, I know traders who bat 30 or 35% and make colossal amounts of dollars.
1. SPY options
1. SPX options
1. /ES e-mini futures
1. a blend of all
Does one trump another in popularity?