trust me that ive actually tried to mathematically define it? not sure why you wouldnt want to trust that i have atleast attempted it lol
The Obvious was stated somewhere toward the beginning of the thread: 90% of the time you must buy low, sell high (BLSH) or sell high, buy low (SHBL). Another name for this is range trading. 10% of the time you buy high sell higher (BHSH) or sell low buy lower (SLBL). Another name for this is trend following. Then, inevitably, Gurus showed up and tried to flex their egos.
Another obvious gem that someone stated is that if 90% of traderz lose, why not take the other side? Another name for this is market making. OP hinted about this when he claimed most people didn't really know where their order went, how the exchange worked, and who took the other side. MM's get the spread, but also several times the ATR, when the market is not trending. I wonder if MM's have decoded the JHM?
Im not that sure its that simple. market making depends on which market your in if your in an auction market, hybrid auction, unified markets, or dealer markets. market making isn't just supplying from inventory in dealer only markets like most people think. yup a good 99% of traders I would guess have no idea where their orders go, but then again to trade in a market/time frame where it is an issue is already crippling the trader. MM's generally are not in the market long as their main objective is to provide liquidity and Market Depth. They do not always hold positions and when they do they have teams of people deciding which ones.. The others are dumped back into the market, and mostly the make money off the spread.. They also have tools that normal retail traders do not like the institutional orderbook where they can see exactly how orders are being built.
Market making is very simple if you trade in tiny size and build a pyramid of limit orders above and below the probable path of price. It's the opposite of leveraged price chaserz, (what most of us are). Tiny size, levels of limit orders, and you can harvest the chop automatically. gracelandupdates.com claims this is what his super-wealthy clients did, when he was a broker and could see their orders. Then he retired and started doing it himself, and writing cheap email updates for those of us on the outside. You don't get the spread but you get part of the range. I never tried doing this method because I'm too infatuated with tails.
It works well untill you get caught with the big and more importantly fast move.Stop loss,you might think?But then again,you`ll never know when the fast move begins,so how do you know where to stop? Still an infinite account is required,but then again the settlement period is ahead,still the risk you wouldn`t make it. Any system has its flows.There is no flowless trading system!NADA!
I dunno im a piker and while my gains my be lower than ZOMG L33T 75% a month super overleveraged scalpers... i've yet to have a down month and most of the time I enjoy a nice drip too