Originally posted by st0ckman
what do you think the best avenue is to get involved in this? you seem to know of people doing this? please let me know.
Personally I don't know anyone who does this, just what I have read over the years. My suggestion if this is what you want to do would be to seek out a hedge fund or investment firm that specializes in Arbitrage. Try to get hired on as whatever they need to hire and learn from that. Barrons magazine has quarterly reviews of hedge funds, that may be a source of leads.
There is also a book called "The Predictors" by Thomas Bass that describes some of the problems associated with computer models. It is a storyline as opposed to a how to.
The other step to consider is learning to program yourself. The reason I say this is if someone has a truly automated model for trading, they are not likely to divulge the secrets or ask for help.
Finally, if you are good at analysis the after hours trading markets provide the greatest inefficiencies. You may be able to come up with a manual approach that suits your needs. But the lack of liquidity makes "risk free" profits quite unlikely.
For instance, company X warns on earnings, you may be able to hit a stale bid if you are fast. Or if a company is taken over you may be able to buy quickly before the pack.
I would spend a few weeks during earnings season watching the after hours market on CNBC. You will see just how quickly the markets adjust to inefficiencies. And then watch the stocks open the next morning, you may find it is harder than it looks.
regards
