You're right, it didn't improve their overall returns but it did improve the returns on those specific positions for the firms involved in the rigging. Then again, after being caught and the penalties...they took a big hit. In hindsight, I'm sure the traders involved in those illegal activities now think it wasn't worth it plus losing their own jobs but only because they got caught. Yet, as discussed in one of the other posted articles...those fines are not enough to deter other bank traders from doing it. There should be jail time and barred from the industry too. In fact, many banks have now prohibit their traders from using those chat rooms. Regardless, I don't think Hedgefunds are sitting down at a table (meeting) and sharing trade strategies but we know that managers move from firm to firm. Surely, those managers aren't ditching their tactics just because they signed a non-disclosure document at their prior firm ??? Thus, they still maintain their prior contacts just like those FX currency traders did. wrbtrader
Indeed. I recall reading the complicated setup like this that is considered very bad on the CME on the USA futures side. I reckon other regulatory bodies would also frown on that activity.
over time it really should . however there is value in giving free weapons to some countires even though in the short term they get weapons that are twice as good as they should have. you dont want a globalist in the dark in a mountain cave developing a long range ballistic missile capable of carrying a nuclear warhead if its 1945. its much better if they have 2nd hand ones we dont use
Wrong. I do have my own edge and I have been trading it profitably for a while now. I am in several discord’s helping beginner traders teaching them my trading style because I like to help. I asked this question because wanted to see if anyone on here has had this particular experience. Think before you respond buddy.
Obviously, any strategy (edge) becomes less effective as more capital is deployed to it, and/or as awareness of it increases. This is basic logic. It defies common sense to claim that a strategy could become more effective as more people use it - imagine if every investor in the world dropped what they were doing and tried to trade the strategy, where would the alpha come from? Who would take the other side of the trades? When you have cases of speculative bubbles (which can last quite a while) being inflated by dumb money public participation, or trading gurus front-running the signals they sell, it can appear that greater awareness is improving returns to the strategy - but the underlying dynamic in these cases is basically a Ponzi scheme. The different layers of participants are not in fact following the same strategy, and only a tiny number of those participants will actually realize excess returns.
OK, so @dozu888 was correct. He and his pro boys do work together and coordinate their moves to make money.
My experience has been that this is not a general truth ... although there are undoubtedly cases where it is true. I trade a basket of 7-10 option orders simultaneously ... deploring more capital has not created a problem ... and I can't imagine how much capital would be required to distort all the markets of those different orders. My experience has been that this is also not a general truth. I've seen too-many-to-count pump-n-dump schemes that rely on, or benefit from, increased participation to be profitable.