who ruined the US markets ?
- Thread starter iceman1
- Start date
There's nothing wrong with the US markets. They have never been more transparent and accessible than they are today.
Could anyone please post a picture of a "typical" intraday chart pre-HFT and a "typical" intraday chart from today?
I don`t have access to that type of data right now.
What has changed? And what is ruined?
Markets still go up and down, no?
I don`t have access to that type of data right now.
What has changed? And what is ruined?
Markets still go up and down, no?
What you say has some truth, a lot of strats and setups are now kaput. Liquidity is very very low, due to the recession, hft and broker internalization.
You just have to go longer term now, although opportunities are not as frequent or consistent. Scalping the L2 box is now a distant memory. I think many of us trading prop would have failed if we had started our trading career in this current environment.
the largest firms,gsachs,jpm,ms,merill,bs leh,were not acting as one before 08,with ml getting absorbed, bear stearns and lehman the two who would habitually target the others large asset accumulation,left out of the tarp dist and forced to die ,it is now much easier for the fed n the largest banks to work together ,and the banks couldn't make new loans with the tarp to profit with the debt they had in re and commercial re,they intentionally and masterfully created there own symphony where they would accumulate ,sell,turn, distribute and reaccumulate equities and commodities all in beautiful unison,what is now left is them with the lions share of the wealth,and the workers, retail and smaller funds,decimated to the point where there is no one to profit from other than each other,the question is where will rome try to conquer next..that and $4 will get me a starbucks coffee
Markets aren't "ruined" per se... but they are nowhere near bountiful as before
Price movement has changed dramatically in several ways. First of all, average daily ranges have contracted to half or less from years past. That's one major difference now than before... overall intraday ranges are much smaller, so average potential profit is likewise much less.
Secondly, price swings cover more sideways distance thru these contracted ranges. Some call it "chop". Whatever the label, price action moves against longs or shorts far enough to take out stops repeatedly, but does not move far enough in favor to reach profit objectives nearly as often.
So now more than in the past, stop loss orders are harder to hold while profitable trades are fewer than before. Skews the win/loss ratio against traders relative to large-range, higher volume markets.
With low-volume price movement, the directional turns are much more rapid and abrupt. Because there is no density of resting orders in the market, a price peak at highs or lows tend to v-turn and fire off the opposite direction now.
In the past, price turns would unfold in more deliberate rounding tops or bottoms, double tops or bottoms, 1-2-3 swings. Now it is much more "traps" and "springs" in rapid v-turn fashion. That makes it tougher to change directions with deliberation because one minute price is going one way, two minutes later it is flying the opposite direction.
Lastly, all markets tend to make zero to two directional swings per session and then shut right down into dead consolidation. Years past when volatility was high, price action swung around numerous times all day long more than not. Now that is a rarity of all-day opportunity.
Anyone who has been around for years can easily see the difference in price movement now versus times of higher volume and volatility. But all anyone needs to do is ask the big six and seven-figures annual traders archived in older P&L threads here.
Ask lescor and red-ink and szeven and reardon metal and dustin and others if this year was a record-profits producer for them. I already know what the collective answer is... that is plain and obvious.
Financial markets are still tradable, but not nearly in the same manner as years past. It is a different game now, and it will be different still in the years to come. It always is
Volatility is down but that's nothing special -- there have been years such as this one before (2004, 2005 and plenty in the 90s).
2007, 2008, 2009 were abnormal years, no idea why people assume that kind of volatility was here to stay.
The more significant problem is having fewer players, meaning high likelihood of firms cornering some markets and playing dirty together.
That, and central banks creating artificial trends.
At some point the exchanges will need to start lowering listing fees to attract new IPOs, the selection of liquid equities has dropped significantly - acquisitions still happen yet the IPO pipeline is very poor.
2007, 2008, 2009 were abnormal years, no idea why people assume that kind of volatility was here to stay.
The more significant problem is having fewer players, meaning high likelihood of firms cornering some markets and playing dirty together.
That, and central banks creating artificial trends.
At some point the exchanges will need to start lowering listing fees to attract new IPOs, the selection of liquid equities has dropped significantly - acquisitions still happen yet the IPO pipeline is very poor.