Hi, this is probably a newbie questions, but Im curious as to what you people think are plausible answers. So far, from what I understand to gain an "edge" in the markets, you have to exploit a certain inefficiency. Generally people don't like to tell others about these, because the more people that know about them, the more will use them, thus making it less and less effective. Someone on ET said they read it takes about 3 years for a market inefficiency to have severely diminished returns. So, you have people in the markets who have INCREDBLE gains. Im not talking about 12% a year mutal funds, or even some hedge funds, but like 10% a week, or even in the hundreds of percentage points a year. Obviously with certain markets trading with the billions of dollars in a mutal fund will raise filling issues (equities is what im thinking), move the market, etc etc, but what about gigantic markets that eat a billion dollars for breakfast like FOREX? This could easily handle the volume needed to trade with large mutal funds. Then there is the argument that it is more profitable to trade for oneself. This may be true, but if you get the 20% performance incentive offered by many hedge funds, it would be pretty hard to beat the raw capital gain with your own money, at least for a while.... So my question is, why are all these mutual funds performaing so poorly? because the equities market? they want to limit drawdrown SOO much, performance suffers? Then why arent hedge funds making INSANE returns? If you look at the index, and performance of these funds, it hardly seems to be worth it. Then you see the claimed returns of some posters on here (granted there is no verification), BUT if anyone ever looks at trading competitions like FXCM, trade2win, and consistently (yet simulated) programs like on collective2, and the number of other trading competitions. You can argue that getting returns like on FXCM of 700%+ a month, is not consistent, and it would be hard to tell because they only have montly trades, but if you look at longer term simulated programs, they are consistent over 36 week terms. So how come there arent any super high performing hedge funds, or decent performing mutal funds? thanks.