Algo's are pushing every market toward randomness - God help us traders

[tortoise]

i remember, in good ol days jumping on a trend that everyone else saw too. (2000)my entry long gone. seldom revisited or challenged. simply question where do i want to jump off & bank.

NOW. every one of my trade entry is challenged,not once twice often 3 or more times.by faceless,nameless algos


this isnt your dad's market anymore

I wasn't around in 2000. Kudos to you for lasting this long.

 

[jimmiebarton]

If you can't compete with the algos, increase your time frame.

the 'warren buffett' strategy.

macro time frames are not not inflicted with algo activity. the erosion is just less obvious

 

[panzerman]

I wish markets would become more Gaussian, i.e. no skew and kurtosis in their distributions. That's easy to deal with.

X = exp(sigma*t*x)*S

where
X = future price
sigma = volatility
t = annualized time
x = standard deviations
S = current price

x =1.282 stddev = 90% winners (at expiration of course)

 

[jimmiebarton]

i'm going to throw this out...and this is not rigor.

"noise" is all that is happening below a trader's level of perception, at a 'deeper' more fundamental level. i think thats good rough start. but if you are of the vein that quantum moves have little to do with your 5 min candle entry, wellllllllllll... i got a bridge for you

 

[tortoise]

i'm going to throw this out...and this is not rigor.

"noise" is all that is happening below a trader's level of perception, at a 'deeper' more fundamental level. i think thats good rough start. but if you are of the vein that quantum moves have little to do with your 5 min candle entry, wellllllllllll... i got a bridge for you

I've no idea what you're trying to say here but it sounds like you're ready to move on to your next phase in life.

 

[jimmiebarton]

I've no idea what you're trying to say here but it sounds like you're ready to move on to your next phase in life.

there was a time i could 'eye-ball' a chart.

everything now, is stats,math rigor; not complaining just saying

i've moved on

 

[i960]

I agree, the market will become random. But wait; that will imply that those traders that HFT algos feed off of will be wrung dry.. implying that big HFT shops will start liquidating/consolidating.. which might lead to some inefficiencies in the market.. leading further to other participants entering the market..

.. and round and round we go.

And there you go - the reason they most likely won't become random. If anything massive mechanization of everything that is dependent on I/O from the market would probably result in feedback loops, large oscillations, or clamped down highly predictable behavior. All of those present opportunities to make money.

Is anyone else not really seeing what's so particularly random lately? It's not random if you're getting screwed: that's their PLAN.

 

[i960]

there was a time i could 'eye-ball' a chart.

everything now, is stats,math rigor; not complaining just saying

i've moved on

Do you use market profile? Volume profile? What timeframe are you trading? Just because markets don't trend like they used to doesn't mean a: you cannot trade these markets, or b: there aren't trends out there (hint: spreads, look into them).

 

[jimmiebarton]

Do you use market profile? Volume profile? What timeframe are you trading? Just because markets don't trend like they used to doesn't mean a: you cannot trade these markets, or b: there aren't trends out there (hint: spreads, look into them).

no, i vaguely aware of market profile strategy but don't use it.

to be honest with you, i'd rather eyeball the chart

MP is so 80's

 

[i960]

Okay well if you were referring to your trades as being "challenged" meaning they consistently go against you, find out why that is. Surely if you had taken a more patient entry in 100% of those cases then 100% of the time they wouldn't have gone against you so much.

Algos, pro traders, etc. they know where small time guys are getting in - and they regularly take advantage of that.

Take advantage of them taking advantage.