How are you traders competing with (and beating) the algos, HFTs, etc.?

S

Saltynuts

There seem to be a lot of successful traders on here (and undoubtedly many unsuccessful ones). So, I'm just curious on how you guys think it is that you make money at it.

Take computer trading. Make a few assumptions:

1. Computers can execute trades much faster than humans; and

2. Programmers are just a smart as non-programming traders, and can program algorithms that catch and trade patters much faster than human traders.

3. There are plenty of these programmers (and programs) out there.

If all those assumptions are correct, how could human, non-automated trading really ever compete? Won't any recognizable pattern or statistic be picked up by the algorithms right away and they will get to the trade first, sucking any potential value away?

You might say, "yea, but we traders KNOW that their algorithms do this, and we react to this, and this is the pattern we trade on." But in short order it seems the algorithms would pick up on THAT as well, and get in first.

Just curious for yalls thoughts. Thanks!
 
Saltynuts said:
There seem to be a lot of successful traders on here (and undoubtedly many unsuccessful ones). So, I'm just curious on how you guys think it is that you make money at it.

Take computer trading. Make a few assumptions:

1. Computers can execute trades much faster than humans; and

2. Programmers are just a smart as non-programming traders, and can program algorithms that catch and trade patters much faster than human traders.

3. There are plenty of these programmers (and programs) out there.

If all those assumptions are correct, how could human, non-automated trading really ever compete? Won't any recognizable pattern or statistic be picked up by the algorithms right away and they will get to the trade first, sucking any potential value away?

You might say, "yea, but we traders KNOW that their algorithms do this, and we react to this, and this is the pattern we trade on." But in short order it seems the algorithms would pick up on THAT as well, and get in first.

Just curious for yalls thoughts. Thanks!
More...

Arbitrage is your answer.
That’s your 10,000 hours.
 
Saltynuts said:
Arbitrage? But wouldn't the algos and HFTing pick that sort of opportunity up and execute way faster than a human could? What are you arbitraging if I might ask DeltaRisk? Thanks!
More...

Now that’s getting a little too initimate.
Nobody wants competition where they eat, so I won’t tell you. But, on the other hand, I do accept investors *currently* and I do get audited by E&Y.

The best piece of advice I can give you is.....there is no edge in heavily traded instruments.
 
DeltaRisk said:
Now that’s getting a little too initimate.
Nobody wants competition where they eat, so I won’t tell you. But, on the other hand, I do accept investors *currently* and I do get audited by E&Y.

The best piece of advice I can give you is.....there is no edge in heavily traded instruments.
More...

right, that nightclub , so popular and crowded, no one goes there anymore.
 
You must log in or register to reply here.
Back
Top