I'm gonna keep this post short and simple-
1- automated trading is taking over the markets. 80% of trades are done via automated trading already(in 2000 it was significantly less, I want to say around 20-30%). it's only a matter of time till its 99%, then 99.99999%
2- automated trading is done via pattern recognition, and often trendlines as I've witness live many times. (its crazy how perfectly breakouts move when running the trendline) -or how support holds.
3- the shorter the time frame, the larger returns (over the course of a year).
For instance, most humans invested in the markets right now would be happy w 20% returns. however, automated trading follows trendlines that would offer say a 1000% (or much more) return. The only thing is that these trendlines are often only around a few hours long.
But this is not really a problem, because when that trendline is up, there is many others waiting.
Indeed, the computer for instance, has an array of trends to pick
1 could be a 1000% ROI
another could be 900%
another could be 800% (but this one may have the strongest pattern, and thus the computer may select this one)
^note that these are ROI's over a year(and the trend for that particular trade very likely wont last a year, more likely a few hours or even just an hour or less- but once its done it picks another- with the highest return and strongest pattern possible).
---
More in regard to the shorter the time frame, the larger the potential returns:
We will move into an era where trades take less and less fractions of a second.
ie: if the fastest trade today is 1/1000 of a second,
10 years from now it could be 1/1000000 of a second.
And these shorter time frames offer potentially higher and higher ROI's, (say 10,000% roi)(and the trend may only last a few seconds or fraction of a second- but again it can move on to another trend right after)
----
finally.
how does this effect human traders?
well, if you're getting a 20% return, but a machine is getting a 1000% return, that machine is going to take your money sooner or later.
this can be done by the money supply increasing (thus devaluing your position)
or
it can be done by simply crashing your positions, which would nonchanantly happen as the machines naturally maximize their return (which can be done by crushing your positions when they approach a support line (at which point the machine applies pressure(buying or selling power to break your trend), breaks your trend and flushes your position, all seemlessly, emotionlessly).
---
there is more to this, as eventually it becomes machines against machines (no human involvement), and it would appear the fastest machine wins (as it gets the highest ROI trading on the shortest time frames)
what are your guys thoughts, give me your feedback
/Tommy
1- automated trading is taking over the markets. 80% of trades are done via automated trading already(in 2000 it was significantly less, I want to say around 20-30%). it's only a matter of time till its 99%, then 99.99999%
2- automated trading is done via pattern recognition, and often trendlines as I've witness live many times. (its crazy how perfectly breakouts move when running the trendline) -or how support holds.
3- the shorter the time frame, the larger returns (over the course of a year).
For instance, most humans invested in the markets right now would be happy w 20% returns. however, automated trading follows trendlines that would offer say a 1000% (or much more) return. The only thing is that these trendlines are often only around a few hours long.
But this is not really a problem, because when that trendline is up, there is many others waiting.
Indeed, the computer for instance, has an array of trends to pick
1 could be a 1000% ROI
another could be 900%
another could be 800% (but this one may have the strongest pattern, and thus the computer may select this one)
^note that these are ROI's over a year(and the trend for that particular trade very likely wont last a year, more likely a few hours or even just an hour or less- but once its done it picks another- with the highest return and strongest pattern possible).
---
More in regard to the shorter the time frame, the larger the potential returns:
We will move into an era where trades take less and less fractions of a second.
ie: if the fastest trade today is 1/1000 of a second,
10 years from now it could be 1/1000000 of a second.
And these shorter time frames offer potentially higher and higher ROI's, (say 10,000% roi)(and the trend may only last a few seconds or fraction of a second- but again it can move on to another trend right after)
----
finally.
how does this effect human traders?
well, if you're getting a 20% return, but a machine is getting a 1000% return, that machine is going to take your money sooner or later.
this can be done by the money supply increasing (thus devaluing your position)
or
it can be done by simply crashing your positions, which would nonchanantly happen as the machines naturally maximize their return (which can be done by crushing your positions when they approach a support line (at which point the machine applies pressure(buying or selling power to break your trend), breaks your trend and flushes your position, all seemlessly, emotionlessly).
---
there is more to this, as eventually it becomes machines against machines (no human involvement), and it would appear the fastest machine wins (as it gets the highest ROI trading on the shortest time frames)
what are your guys thoughts, give me your feedback
/Tommy