There is truth in this but I also have significant disagreements with it.
There was a famous Celtics game where Larry Bird looked his defender in the eye and basically said "Okay listen, first I am going to go here, then I am going to do this and this, then I am going to shoot in your face and win the game." And Bird did it.
Or a second example: if two people are playing chess and one of them builds up a structural advantage through small subtle improvements over the course of a few dozen moves, then all those little things will add up to a raw advantage that lets him attack with all the subtlety of a bulldozer and still win.
My point is that if your method has a built in structural advantage that your opponent (food group) cannot overcome, there is nothing they can do about it, even if they know exactly what you are doing. I could write a letter to all the big mutual funds and oversized hedge funds and program traders and anyone else with hundreds of millions and say:
"Listen guys, I am taking money from you on a regular basis. Every time you start building a position or start unloading a position I can see your footprint clear as day, and I can smell you downwind sometimes even before you act. So I come in there and take a small cut."
What will those guys do? They can't stop buying and selling. They can't hide the fact that buying pushes stuff up and selling pushes it down. Of course, they don't really care about guys like me either, because even if I get up in the twenty million range, I will still be like that tiny little fish that swims up to the big fish and takes a bite out of it's side (sabre toothed blenny I think they are called). Painful for a split second but too hard to catch and too small and fast to go after.
Sometimes it is more important to think about the group you are taking from than the guy sitting next to you or copying you. If the pie is huge, we can all be doing the exact same thing and everyone can eat. If the pie is small, then we will be fighting over the same slice.
Also there is a large element of a strategy which has to be reproduced on a daily basis, day in and day out. Rules are important but so are many intrinsic qualities that cannot be copied.
I scan six hundred charts a night in roughly four hours time- it takes years of study and fine tuning to pull that off. I have professionals work my orders- my own personal market makers, so I don't have to waste time or energy doing that. The ticket charge is easily covered by the cents per share price improvement on my entries and exits- but again, there is a size advantage there, it wouldn't work if I were smaller. I have a system efficient enough for me to monitor as many as twelve positions at once- needless to say a bit of coolness, calmness and ordered perfectionism is needed for that.
Point being that the rules are really just a jumping off point. There are other key elements you can't teach or can't give. There is some book out about branding where they asked the Starbucks founder what the most important element was. He thought for a minute and said "everything is important." This is why if you give a guy a set of rules and nothing else, you've still only given him maybe half the equation of what makes your method work.
If you want to do arbitrage, you are competing with all the PhD's and the MIT math geeks and the twenty million dollar R&D budgets at the big quant houses. To me that is kind of like trying to sell hamburgers vs. McDonald's or sell cars vs. Ford / GM. This is why I don't spend time trying to calculate the latest statistical variance because I know that somewhere out there someone with ten calculators and a supercomputer has already gotten to it.
In my opinion, you want to focus on your advantage. They are 'big', we are 'small'. So why play their game? They work the structural advantages to their benefit by throwing tons of money at every quantitative solution. But they will NEVER be able to solve the problem of being so freakin' BIG because, most of the time, an advantage can also be a weakness on the other side of the coin. Sprinters run fast but can't lift heavy weights. Weight lifters can bench press 400 pounds but can't run. Elephants have only one natural enemy besides man (the cobra) but they have to find ridiculous amounts of food every day. The field mouse has to be afraid of just about everything bigger than him, but he will never ever have to worry about starvation. On and on and on.
Why not do the same as them? Play to your advantage. Why should a mouse dick around with an elephants game? Build your method on logical rules that can never be tampered with, never be nullified, and focus on your ability to move fast, not your ability to do research. An influx of buying will always raise prices over time. An influx of selling will always lower prices over time. If a portfolio manager is buying in the morning, then odds are better than even he will be buying in the afternoon too. Same thing for selling. On and on and so forth.
I guess this is more than my .02, call it a nickel this time. Lazy Saturday morning (afternoon already? Good grief i woke up late....)
Here's something that made my nite candlechart reading more profitable.