With stocks trading there are so many stocks One gets to feel like taking positions in all of them. Then it becomes difficult to track many stocks
Again if one can close positions in the day and reenter it becomes more profitable than holding positions for many days. one can then monitor only 1 or 2 stocks simultaneously .
I read a book against the gods nice book. Its on statistcs and a historical book on various statisticians and their invention since last 4 centuries.
It explains the following concepts.
1. Mean reversion: ( For trading I look it as trend reversion)
2. Diversification
3. Balancing
4. Game theory and so on
Just wanted views on these
Diversification: One of the concepts which are in fad amongst most fund managers or taking positions in many stocks. So probability of all of them missing out becomes less.
Balancing: Have long and short positions. Sell the weak. Buy the strong. In that way some positions are likely to work even in sudden adverse scenarios. This concept explains that one shdnt have be to heavy on one side
Happy weekend
to all