Meetup Update (Part 2)

In the last post I mentioned that neither Meetup I attended this week provided any actionable ideas.

A discussion awaits about what “actionable” really means. For now, consider it “capable of generating trading profits.”

Tuesday evening involved a number of attendees sitting around at a bar eating and drinking. My beer was outstanding but neither that nor the buzz that followed were actionable.

Perhaps the closest thing to actionable was one guy’s experience about losing money trading Forex. He is now on a crusade to make sure everyone knows what a scam Forex is for the retail trader. His experience mirrored what I have studied about Forex so I think his advice to avoid Forex is indirectly actionable. By avoiding Forex we may avoid losses, which is akin to making money.

Much unactionable debate was had about the state of the economy, future direction of markets, and other fundamental information. I would argue that none of this provides market edge. Predictions are uncertain bets or wagers that belong in the gambling domain. People can be right if lady luck chooses to shine on them. If you believe otherwise then I would refer you to any number of intelligent minds who make incorrect predictions daily on CNBC.

Like fundamental analysis, most black box trading systems are not actionable. One attendee on Tuesday talked about a trading model he develops and sells. Since I have yet to write on this topic, I’ll reference this article as a reason to steer clear. On Tuesday I asked my new friend how his model has been validated (that’s a financial engineering term).

“By the testimonials of our customers,” he said.

Ha!

In the con-artistry game, most testimonials are confederates of the bad guy. Welcome to the world of finance. Personally, I would not consider his product actionable unless I tested it myself. That would require more resources than I have available at this time.

I will continue in the next post.