Do strategies stop working after a few years?

[bavan666]

I've heard from many traders that you should pick one strategy, stick to it and master it, then you'll be profitable
But I've also heard that strategies lose their edge in a few years and you'll have to develop a new edge after that, both of these statements seem contradictory, what do you guys think?

 

[badarivt]

I have observed that trend lines combined with price action works consistently. Not sure about other strategies.

 

[primitivetrader]

I've heard from many traders that you should pick one strategy, stick to it and master it, then you'll be profitable
But I've also heard that strategies lose their edge in a few years and you'll have to develop a new edge after that, both of these statements seem contradictory, what do you guys think?

don't believe what you hear or see. do your own research and then decide.

 

[TracerBullet]

I've heard from many traders that you should pick one strategy, stick to it and master it, then you'll be profitable
But I've also heard that strategies lose their edge in a few years and you'll have to develop a new edge after that, both of these statements seem contradictory, what do you guys think?

Need to do both. Keep improving system as markets change but also diversify to reduce risk. I have not yet faced situation of system dying but it will happen one day. Hence diversify. Diversification into different types of systems will also reduce your drawdowns and smoothen equity curve.

Diversification could be outside trading income too, through investment/business.

 

[Pradeep Narayan]

It a bit like driving everyday to work on a busy road... you need to adjust your driving style based on the traffic!

 

[Zuluhn]

Of course. That is the main reason why traders have o spend enough time on creating new strategies, testing them and only then they can move to real account again and start trading. To my mind, it's an inevitable part of the whole trading activity. The most interesting thing is that it doesn't relate only to short-term traders. It also can be applied to investors, because there are some situations, for example, unforeseen corcumstances in th world economy, when investors have to change their long-term strategy when they perhaps were building it for a very long time.
So, it's important to change strategy in time.

 

[bavan666]

Of course. That is the main reason why traders have o spend enough time on creating new strategies, testing them and only then they can move to real account again and start trading. To my mind, it's an inevitable part of the whole trading activity. The most interesting thing is that it doesn't relate only to short-term traders. It also can be applied to investors, because there are some situations, for example, unforeseen corcumstances in th world economy, when investors have to change their long-term strategy when they perhaps were building it for a very long time.
So, it's important to change strategy in time.

Does it apply to discretionary trading too? there are some strategies that analyze the very fundamental behavior of the market, take tape reading for example, it has been the same for centuries, I think more mechanical ways of trading go out of fashion every few years, but the subjective ways of trading don't lose their edge if the market changes condition, I would love to hear your thoughts on this

 

[Zologul]

They do stop working after some period of time. That is because of the very nature of the markets. They never stand still as they are constantly changing. Therefore, if you want to get the profits from the market, you should also change your trading strategy and adjust it to the current market situation. THat is why so many people say that the tradrs are always in the process of learning.