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Hi Al, Tom, Joe, and others
Sure I'd be glad to talk about it.
Market inefficiencies break down into two areas: structural and individual
market inefficiencies.
Structural inefficiencies are equipment, order routing, exchange rules, etc.
For example if you are trying to trade NASDAQ stocks in short time frames
using a broker telephone system and you are completing with traders using
direct lines to the floor, then you're on the wrong side of a structural
inefficiency. Different rules of conduct for market makers in the different
exchanges allow opportunities for exploiting a rules structural
inefficiency. Etc.
So in your strategic business plan, what structural advantage do you have
going for you?
Market inefficiencies for example are reoccurring patterns in your tradable.
For example, agricultural spreads reoccur every year at the same time and
for the same length of time. Often there are fundamental reasons as to why
the spread works. They are an example of market inefficiencies. They're as
boring as watching paint dry on the wall but they make money regularly.
Others, trade "events" in their markets because they have a predictable
pattern. Etc. Business needs regular predictable activity to make money.
What is your activity advantage?
The business of trading is exploiting the market inefficiencies in the niche
that you trade. You go to work everyday, the business makes money. It's a
job. It's not exciting, it's not flashy, and it's usually secluded and
un-noticed.
There are lots of niches that the bigger accounts can't exploit that are
perfect for the smaller trader to exploit up to the 10 contract or 5,000
share size .
CMA was a options maker ... he can tell you about trading as a business.
Best regards
Walter
----- Original Message -----
From: Al Taglavore <altag@xxxxxxxxxx>
To: <metastock@xxxxxxxxxxxxx>
Sent: Friday, November 05, 1999 10:57 AM
Subject: Re: Increasing the MetaStock(R) Formula Language with MetaStock 7
| Walter,
|
| I read with interest what you have written. In past posts you have
| expounded upon market inefficiencies. Would you please elaborate. Are
you
| defining inefficiences by fundamentals? Price patterns? How do you, as a
| trader, determine when a market, sector, stock, any tradable or group of
| tradables is inefficient. If you prefer, e-mail me direct at
| altag@xxxxxxxxxxx
|
| Thank you.
|
| ----------
| > From: Walter Lake <wlake@xxxxxxxxx>
| > To: metastock@xxxxxxxxxxxxx
| > Subject: Re: Increasing the MetaStock(R) Formula Language with MetaStock
| 7
| > Date: Friday, November 05, 1999 8:47 AM
| >
| > Hi Daniel and others
| >
| > You wrote "... the average full-time trader wants to make money ..."
| >
| > The questions arises, does studying TA, developing systems, learning
| Elliot
| > Waves make money? I don't think so.
| >
| > It is an identified market inefficiency that makes the money for you. If
| you
| > trade where there is no identified market inefficiency, no amount of
| > programming, TA, study etc. will make money for you. Unfortunately that
| is
| > the case with most traders and Metastock users.
| >
| > Once a market inefficiency has been identified, often very simple
| analytical
| > tools will be used in the trading system. Then there is lots of time for
| > programming and automating the system.
| >
| > Learning to program is necessary, I believe, because with most of the
| market
| > inefficiencies that I have seen traders trading, there are usually no
| > publically available programs.
| >
| > Unfortunately, all the retail charting programs point the new investor /
| > trader into the promised land of TA and not towards discovering market
| > inefficency areas that the professional traders base their business on.
| >
| > Best regards
| >
| > Walter
| >
| > -----
| > From: Daniel Martinez
| > To: metastock@xxxxxxxxxxxxx
| > Sent: Thursday, November 04, 1999 10:08 PM
| > Subject: Re: Increasing the MetaStock(R) Formula Language with MetaStock
| 7
| >
| >
| > I concur. Learning to program is a complicated process. I don't want
to
| > put a damper on the celebrations here, but becoming proficient at
| > programming could take up to a year. That is, of course, if you were to
| > spend at least 2 hours a day on VB. It's hard enough to learn how to
| > program in VBA, now we are expected to program in full VB? I think not.
| > Maybe when I'm not full-time trading, not system testing, not learning
| new
| > TA methods, not learning Elliot Wave...
| > Fact is, the average full-time trader wants to make money, not learn how
| to
| > program VB. I think a more efficient route would be for Equis to create
| a
| > program similar to RadarScreen to track large numbers of stocks in
| realtime.
| > I have been tracking a (much smaller) group of stocks delayed and this
is
| > definitely a way to spot moving stocks during the day.
| > Just my 2¢,
| > Daniel.
| >
| > Walter Lake wrote:
| > Don
| > What you say makes perfect sense ... the installed base of VB and Excel
| is
| > huge. What is this "Power Basic" nonsense to mainstream users ... just
| more
| > "not really being helpful stuff" to confuse and complicate the issue?
| > Let me know when your program is ready. I'd be glad to work with someone
| who
| > is trying not "trying".
| > Best regards
| > Walter
|
|