Surf thinks predicting the markets means being 100% accurate all the time. He just can't imagine how predictions that are only 60% accurate can make money.
You got it all wrong, bro. I think you can make money with 1% accurate predictions if the winning trades are larger than the all losers combined. I am talking about sometime in the future when markets may be able to be predicted with 100% accuracy, I am just speculating about what would happen should this ever come true. surf
Surf, you keep using the word prediction. I know ETers and retail traders like to think about markets in terms of predictions, but think about trading more in terms of providing a service. As a speculator you are serving a valuable economic function and you are being paid a fee for that. Whether you get to keep that fee is another story. But you are providing a service and getting paid for it. As long as speculators provide that service, they will get paid for that. Has nothing to do with calling tops or bottoms and making calls on ET and bragging about it. That's not trading in my opinion.
I agree with Maverick. Surf seems like he is playing tetris and wants to understand the algorithm behind the game.
Great post Baron. Altucher comes off like a lot of the guys who started in the late 90's who got used to the easy times. Then when things got tough and one had to actually put in the time they folded. Except he is whining like a little bitch. Back in the early 90's it was the specialists they were always whining about. Then the floor traders were screwing everyone. Now it's the HFT's and algos. A lot of failed traders love pointing the finger at everyone else and not accept the fact that they didn't make the necessary changes. Sure it's not easy street like the late 90's....but still a lot of money to be made day trading. The one thing that hasn't changes is great traders have discipline and excellent money mgmt. The guys who have that are still doing just fine.
Over the long term, stock prices might follow intrinsic values that could be predicted. But the long term is very difficult to predict. And the short term behavior of stock prices mostly has to do with human behavior. There's enough positive feedback built into the short term structure of the market that it's pretty chaotic. As far as it being impossible to daytrade, when I visited a floor where most of the traders I knew had transferred to perhaps 5 years after the floor we traded at went bust, most of the guys were still there. Only difference I noticed was that the cars that were in the parking lot at 6:30AM PST were a lot fancier than the ones they'd been driving 5 years before. I concluded that they were making money. I've seen bots trading in somewhat illiquid stocks (with $0.15 spreads). Figuring out how to game them didn't require a lot of effort. But right now, I'd have to admit that I think it's a good time to buy individual stocks and hold them for 5 or 10 years.
Wow, a single entity buying every share issued anywhere in the world. Awesome. And the U.S. govt. would stop selling bonds, just direct placement to a single entity. What do you guys smoke in Florida? Edit: And the 5 trillion a day FX market would cease to exist as all global trade would be catered to by one entity, ie no more markets. Surf, you got a bright future in comics, that is your true calling.