ES "Too Efficient"

I think ES is "noisy" because of the wide spread and the arbitrage between the pit and electronic. As soon as the electronic starts pulling away the pit sells the electronic and buys the pit to bring the indexes together.

If you are a short term electronic trader I think you are better off with ER2, YM or NQ - they continue the trend much better and smoother. Why trade ES and contribute to a bunch of no-talent pit jockeys who's contribution to the markets is similar to a butcher who puts his thumb on the scale adding to your costs?
 
Quote from tradertony76:

Could someone explain to me what "too efficient" means ?

I often hear it in the context of "Don't waste your time trying to scalp the ES, that market is 'too efficient'"

The connotation I always hear it in is in regards to it being impossible to take money consistently out of a certain market.

What factors make a market "too efficient" ?

Thanks,
-T
More...

I believe what most people are trying to tell you is that you are going to be up against some of the smartest traders in the world. Any edge that can be automated will dissappear very rapidly.

Best way i can describe it is by posing a question which i was asked "what is your edge" it is tough to find an edge be it informational or technical in something with that many of the best and most highly capitalized traders in the world.
 
In pre electonic trading, in the pits, locals had a great edge by playing of customers orders. This is not the case today in electonic platforms. Everyone sees the same info (I know that few players have some inside knowledge), and DOM and T&S show you, like anyone else, the same picture.

If majority can not see it, so be it. But to say that ES is "too efficient" is just an excuse for people who failed.
 
Does anyone disagree with the following that the pit-es arbitrage and relatively wide spread in the ES causes it to be choppy while trending in comparison to the ER or YM which seem to have intraday moves that are smoother and follow through better? I.E. the ER and YM are more suitable for intraday traders.
The way the ES moves it seems only profitable for swing, position traders and pit arbitragers.



Quote from erToo:

I think ES is "noisy" because of the wide spread and the arbitrage between the pit and electronic. As soon as the electronic starts pulling away the pit sells the electronic and buys the pit to bring the indexes together.

If you are a short term electronic trader I think you are better off with ER2, YM or NQ - they continue the trend much better and smoother.
More...
 
You must log in or register to reply here.
Back
Top