Many do. Many work for quite a few years for those 6-figure salaries (many of them not so "measly") until they've saved up enough capital to do as well or better by trading their own accounts. Some of the most successful independent traders are ex-institutional traders and quants doing exactly that. No, that doesn't make it worthless; but it remains factual that some of it is close to worthless.
I have built my own system that has generated incredible terms for many years. If the day comes when it stops working, I will look to license it to unsuspecting people who will pay dearly for the holy grail but not before. Many hedge funds find anomalies in the market and can make money for no more than six months. The other Algo's will sniff out what you are doing and start replicating it if profitable and then the losers on the other side blow up and close their trading accounts. Remember the markets are random but the emotions and margin calls are predictable.
Very interesting post and that make sense. How can an alog sniff out my mechanical trading system that I may have bought from a vendor?
The algo's can monitor the order flow and react to the flow. When they see orders moving out or in and it repeats as they make adjustments, it creates an infinite loop which can happen on the frequency of a 100+ order adjustments per second. This is when you realise that your up against another algo and you have to either adjust to it or the exchange is going to shut you down for overloading the pipe. It's not hard to see in the log. This assumes you are putting orders into the market for execution vs something happening only on your laptop.
1. Do a screen for the actively managed (i.e. trades money under some indicators) mutual fund that provided the highest return over the last year, 5 years, decade.... 2. Buy the mutual fund 3. Pay any load and annual expense ratio. That's the max you pay for a successful profitable indicator. Anything else you can provide, with no transparency or visibility into your backtest size, methods, potential for data snooping...is but a poor substitute for what is already available at very low cost to anyone.
I don't buy indicators - if they are profitable why would they sell? I would not. I simply use two indicators - moving averages which represent efficient price & a volatility measure - which gives me optimal exit point for a short term trading. See?! I would not mention which MAs and which Volatility measure. I would never mention them. Above all, you need to have a good fundamental analysis skill. TA tools should only be used to enhance your trading decision.