Most profitable strategies get arbitraged out and become unprofitable over time.
The market conditions change and before you know it your edge is gone.
This is particularly true for publicly known strategies; this strategy is not fully public and is somewhat of a black box – they don’t explain the parameters that trigger a trade, they just call them workhorse and racehorse and explain the “general concept “ vaguely.
This makes it hard to judge the strategy and it was probably done to obscure the true nature of it so that other market participants wouldn’t simply exploit it.
To conclude: have you ever heard of a hedge fund that just makes money all the time with one unchanged strategy that was able to fire all their PhDs because they found the silver bullet?
Transaction fees and non defined profit targets.
Over trading will eat up profit potential.
Most profitable strategies get arbitraged out and become unprofitable over time.
The market conditions change and before you know it your edge is gone.
This is particularly true for publicly known strategies; this strategy is not fully public and is somewhat of a black box – they don’t explain the parameters that trigger a trade, they just call them workhorse and racehorse and explain the “general concept “ vaguely.
This makes it hard to judge the strategy and it was probably done to obscure the true nature of it so that other market participants wouldn’t simply exploit it.
To conclude: have you ever heard of a hedge fund that just makes money all the time with one unchanged strategy that was able to fire all their PhDs because they found the silver bullet?