|
PureBytes Links
Trading Reference Links
|
Just to give another viewpoint on this, and perhaps a slightly sunnier assessment... I also
believe traders can often believe the opposite. i.e. that markets are completely efficient
and therefore it's impossible to make money. My own experience has shown again and
again that markets have pockets of inefficientcy and that continues, albeit the form is
constantly in evolution.
Take a simple, liquid stock like VOD.L. There are literally endless strategies that could be
designed (billions)... it's my guess that no more than a few thousand are actually
employed or 'scanned' at any one time. Actually I think a few thousand is very generous. I
believe it could be considerably less than that. I used to work at the proprietary trading
desks of Merrill Lynch, Barclays Capital and Nomura (all in London) over the last 12 years.
I can assure any reader that notions of a supercomputer churning away testing millions of
strategies is way off the mark. They trade a handful of tried and tested strategies that are
constantly tweaked and improved... or even more than that, they trade off proprietary
information about money flow that is not available to the open market.
The point is, there is so much institutional money flowing through the market... fund
managers, market makers filling client orders, options traders hedging, index arbitragers,
portfolio traders trying to match VWAP... the list goes on an on... and in my experience,
none of these guys give a stuff about technicals or the short to medium term movement of
the stock. That's not their game. They are either hedging so want immediate cover or they
are much longer term, or they are measured on a different benchmark to individual
proprietary traders like you and I. We are a fraction of an enormous marketplace, the vast
bulk of which isn't trying to do what we are.
OF course that doesn't mean making money is easy... it's not... but I believe the reason is
more fundamental to free markets rather than the idea that millions of traders or a
supercomputer, is scanning millions & millions of strategies as we speak. I believe free
markets have (for more than half the time, probably more like 80-90% of the time) very
low signal to noise ratio's... and they therefore do approach random behaviour most of the
time. This can give the impression that markets are efficient... but they are not.
Anyway, it is possible to consistently make money... it always will be, by definition there
will always be opportunities in the market place. Don't be put off by talk of super
computers scanning every possible market efficientcy. I'm still constantly surprised at how
inefficient markets are.... Look at the recent countertrend rally we had to 1440 in the S&P
in the middle of a bear market. ;-)
------------------------------------
Please note that this group is for discussion between users only.
To get support from AmiBroker please send an e-mail directly to
SUPPORT {at} amibroker.com
For NEW RELEASE ANNOUNCEMENTS and other news always check DEVLOG:
http://www.amibroker.com/devlog/
For other support material please check also:
http://www.amibroker.com/support.html
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/amibroker/
<*> Your email settings:
Individual Email | Traditional
<*> To change settings online go to:
http://groups.yahoo.com/group/amibroker/join
(Yahoo! ID required)
<*> To change settings via email:
mailto:amibroker-digest@xxxxxxxxxxxxxxx
mailto:amibroker-fullfeatured@xxxxxxxxxxxxxxx
<*> To unsubscribe from this group, send an email to:
amibroker-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|