The reason the markets are forever becoming more difficult to trade is EFFICIENCY. The more efficient the market becomes, the more difficult it will be trade. OldTrader, if youâve been around for so long, you should know that a high percentage of traders throughout the 70s and 80s made their money by exploiting the marketâs inefficiency. It was the same thing during the 90s. The advent of electronic, online trading left many inefficiencies to be exploited. Sure, the markets were extremely volatile, but that was due, in part, to advent of electronic trading. If anyone actually pays attention, he/she would see the way traders are always looking for the next great market to trade in hopes of exploiting its inefficiencies. (The newest trend being the currency markets) The future of trading only looks worse. I see a future of 24 hour world markets. Everything will trade electronically, 24 hours a day, seven days a week. The volatility will dry-up and investors will be able to invest their money in the markets without having to worry about huge volatile swings in equity. Is there still money to be made in the market? ABSOLUTELY! But in my opinion the traderâs edge is going to under go a slight change from exploiting inefficiencies, to managing and understanding risk, expectancy, and position-sizing. To the person whom started this thread, I recommend Van Tharpâs book, Trade Your Way to Financial Freedom. The book is not really about day trading. Itâs about risk, expectancy, and position-sizing. Once all of the sure fire ways of exploiting inefficiency in order to make a quick buck go away, people will still be making money by understanding market risk. For example, Iâve tested systems that only made money 10% of the time and they were still able to bring returns of over 30% per year over the last 5 years. The instant edge of having a sure fire way to make money will probably disappear, but making money in the markets will go on forever.
jmho When existing inefficiencies are overcome, new inefficiencies will be created in the process. Most startling example is law creation by 'wise' men to fix holes of 'flawed' laws. We know that each law has its own holes, say there are two holes for each law. Each time a new law is added to 'suppress' some holes an expansion of holes come into existence. Humans are not efficient. Humans can't jump better that a flea. Humans can't even run faster than rats. Humans 'evacuate' more than 95% of the nutrients they take. Globalization will make specialization a must. Specialization will make differentiation deeper. Humans can only do what humans are supposed to do: create inefficiencies by the bundle, then solving them and creating more in the process. This is called evolution and progress. It is like the old saying: the answer to a question will pop up more questions, or something like that. As long as there are humans, profitable trading will exist. The Euro replaced a basket of currencies. It solved lots of ineffciencies between European countries. Now EURUSD is a much better profit making vehicle. Geeze, did I write all that? :eek: Just take it as a joke!
Why would the future be worse, and for whom? Markets and techniques may change, but people never do -- the one thing you can count on with the human race is that they will always want more. If it gets to the point of a pack of tigers tearing each other apart over a single fawn, so be it; flies can feast as easily off the blood of either. The way I see it, the future is bleakest for the most finicky eaters.
there are always inefficiencies in equities, futures markets... or else you'll be buying stocks like items on shelfs @ walmart with barcodes.