Quote from spike500:
mschey, i don't agree with you for several reasons:
i don't know of ANY professional and well know trader or fund that uses these type of trading. So that raises questions for me.
You talk about 5000$ per hour of trading? That would mean that Mnx has to trade more than 1 million shares an hour at his actual profit rate. But he does "only" 1.2 million A DAY. Your math is not correct. You probably forgot to divide the profit by the hours of trading.
Look at Quadriga, they were very successful also. You can see the past risk, but you can never see the future risk. And as it is unknown it is better to have a big margin than a small one.
It's like driving a car at 150mph. You well be faster in place than me, but one day i will be first and we will never see you again. By driving carefully you will almost every time arrive at the place you were heading at, and if you have an accident, it will be a small one, as you drive carefully. At 150 mph you wiil be always faster, till the day you crash. After that it will be "GAME OVER".
What i would like to know is: what is the invested capital needed to do these trades?
I can understand that this question will not be answered, but if we know this amount it would be possible to judge on the real value of this kind of trading. It makes a hell of a difference if it would be 5000 or 50000 $.
I read about 30000 oracles in an open position, so i guess it will be a considerable amount of money.
Spike, you may disagree, and continue to disagree, it doesn't change the fact that your analysis is wrong.
There are funds out there that are running systems that do trade this kind of volume, because you don't know them doesn't make it untrue, it makes you uninformed!
The system, trades 20 million shares at a margin of .002 per share will make $40,000 per day, or slightly more than our $5000 per hour scenario. Automation is the key here.
If you go back to economics 101, you'll recall that businesses that have large margins and low barriers to entry will likely attract competition. This will lower the margins and excess returns that are being earned. Why do you think so many hedgefunds are having a marginal year at best?
While I agree that profits in the market take time, and the longer you stay with a trade the more money you can make. However, I have found that short term trading is very profitable and a critical component of successful trading because it allows you to earn an income from trading, builds your confidence, and provides the financing needed to stick with your longer term (larger margin) trades. A trader needs to have both to truly build wealth.
unfortunately, I don't have time to debate every naysayer on this site, and even debating with a few can be very time consuming, as such, you may have the final word! I will retire from this discussion.
GTTY,
Mike
