Quote from Laissez Faire:
Questions:
1) What exactly is a price driver? A buyer bidding price higher? A seller offering price lower?
2) Is HFT the only way to profit in today`s market? HFT sure have changed the micro structure of today`s electronic markets and squeezed out human scalpers, but the market still offers profitable daily swings on a higher time frame? And what about higher time frames than the intraday time frame? Surely, the impact of HFT diminishes the further you zoom out, save a flash crash once in a blue moon. I don`t understand your argument and my question is really a rhetorical one, but feel free to answer.
3) HFT is only a subset of algorithmic trading. Far from all algorithms trade on an ultra-short time frame and yes, they use price history as input. What else would they use?
Your argument against how every pattern would be exploited to extinction is not a new one, but a rather poor one still. You can`t buy a $10 dollar book and find a pattern that works all the time for the rest of history. But yes, there are patterns that can be exploited during certain points of time during certain market conditions. A prior poster mentioned volatility analysis and keeping track of current conditions. Patterns come, patterns disappear and some come back. A good trader adapts.
Making a winning system based on technical analysis is not easy, but I certainly believe (know) that it is possible. Money management is obviously key, since it is a matter of gauging probabilities.
Sincerely and in anticipation,
Laissez Faire
