Solo project I've been building this month, wanted to share here. The rules:
You get $10,000 and two secret years of real S&P 500 history, drawn from 1928 to 2019 (daily data, dividends included; your cash earns T-bill rates while you hide). One button: BUY or SELL. Your opponent is a couch. It buys at the start and never moves.
Every finished game is audited by 1,000 monkeys. It's a permutation test 1,000 replays with your same time in the market and same number of trades, on random days. Beat 90% of the monkeys and your win is stamped TIMED THE MARKET. Anything less is stamped LUCKY, in red ink, on your settlement document.
About 84,000 games have been played so far. The couch has won 63% of them. Roughly 1 game in 9 ends in a win that survives the monkey audit.
There's also a daily hand, same secret window for everyone, streaks, and a public ledger of humanity vs the couch.
If you have time, I'd love feedback, and I will answer any methodology questions, thanks!
yes, the idea is if you are in the market 100% of the time you technically draw but the couch has the moral victory : )
Eh, I wouldn't call it moral, but I can absolutely see one point that would tip the scale toward the couch in a draw:
If it is a draw, then you as a trader have no reason to exist, this as a couch doesn't require any salary to keep not trading.
yes, very cheap to maintain other than the occasional cleaning : ) glad you enjoyed it mate
Exactly, and the challenge is to beat the couch, but to tie with it. But as someone else pointed out, the whole premise is somewhat flawed- it is more or less relevant for “technical analysis “; but most traders in the real market try to use information other than the price. That said, I’m a strong believer of passive investing so it’s a fun demonstration.
yes you're right and glad you enjoyed it