Dear Parikshit,
I echo your feelings, and most of us have gone through this. For past 20+ years, I am doing investing / trading, have taken lot of courses spending lot of money. Finally, I have found a suitable investing style. So the time you have spent in market is not waste, and it certainly has given you edge over newcomers.
Now coming to taking up something outside trading – you should never depend on stock market income as your bread and butter. It could be cherry on top :-). So please take up something which will give you regular money. If you have enough funds, then first start investing them for risk free consistent income.
Also while trading – IMPORTANT – use only 10% of your funds for trading (until you find a profitable setup). Use this money to experiment and learn. Market will be here for ages, so RETURN OF CAPITAL is important then RETURN ON CAPITAL. Do not rush, just learn with very small amount of money. Once profitable, use that system with incremental funds. Do not put all funds at stake.
Good luck!
Your view that setups loose their edge overtime makes sense. However, new setups might loose their edge by the time I gain confidence in them after back testing them. How would you deal with that?
I trade systems with signals that have been tested and working for 10+ years. 1 in profit for 4-5 years live another now working for 1yr+ live. Both being scaled up and compounded.
It might get tougher yes, some due to competition but some of that is also probably cyclical.
But i don’t think edges are going away yet. There is always that risk and so there is uncertainty, but if your backtest results keep failing in live env, either you are not giving it enough time in forward test or your backtesting approach has some issues. Make sure there is no future data leak and make sure to add realistic transaction and slippage costs in backtest as these can be substantial ( esp for intraday) .
Also when you trade day by day, tough periods can encourage you to look deeper and see whats happening, and often that can lead to some insight that improves your system and makes it more resilient. So that may be one way of dealing with this ( to the extent possible).
Not always, but they can – depends on how traders evolve too. My guess is things might get choppy and edges could get erratic, but they wont go away en-masse. If systems start losing edge, you will have to diversify and use multiple systems.
Not that much in stocks I would imagine – not as many people trade them, not as many systems deployed in them.