I think the gents in the article are suggesting broader implications.
Has commodities trading become harder due to machine trading today?
- Thread starter helpme_please
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Well, I've made consistent money in commodities based solely off of reading charts. Then again, I'm not a long-term trend trader...I'll hold for a few days at the most.
I think it's very exciting to find new ways to reduce draw down, less I have to make up and beat the Indexes. Long term, risk too great to make high percentages . Just don't see how big funds make it without undue higher risk.
I been selling Eurodollars 7 years, gives you time to figure other approaches to generate other ways to make coin.
I think the points they are making is that the algos push markets to more extremes, looking to force some sort of capitulation to make money. This can create more 'dangerous' markets in a sense, but I think to survive you will need to actually trade the physical product too...I don't think algos can manipulate prices to an extreme if there is threat of delivery
Exactly. Most algos probably have an average time-in-trade of less than 1 minute.
In my opinion, futures trading has become much more difficult in the last 15 years due to a few reasons.
First, the players have become far more sophisticated.
Second, there are fewer and fewer sustained long term trends, particularly in currency futures and commodities. All the long term trends seem to be in equity markets.
Third, most trends are much more choppy than they used to be.
Lastly, the day to day volatility is greater than it used to be. As a result, position sizes have to be smaller, making it more difficult to exploit trends when they do come along.
Must my two cents.
First, the players have become far more sophisticated.
Second, there are fewer and fewer sustained long term trends, particularly in currency futures and commodities. All the long term trends seem to be in equity markets.
Third, most trends are much more choppy than they used to be.
Lastly, the day to day volatility is greater than it used to be. As a result, position sizes have to be smaller, making it more difficult to exploit trends when they do come along.
Must my two cents.
Just a follow up - target hit & position closed. The point being the market still provides great opportunities to make $ - it may have beat me on the bid-ask spread, but after that could not alter the natural price movements from playing out like they always have. Machines scored 1 tick versus my 53 points.
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