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it's pretty unlikely that you have an informational edge unless you're able to pay for more data sources than everyone else and you have an army of humans looki
by kirse 7y ago
it's pretty unlikely that you have an informational edge unless you're able to pay for more data sources than everyone else and you have an army of humans looking for patterns for you
Not really. Exhibit A: Follow realDonaldTrump on Twitter. Look what happened to the SPY index starting at 13:26 EST on 8/1/2019.
[A] https://twitter.com/realDonaldTrump/status/1156979446877962243 https://twitter.com/realDonaldTrump/status/11569794468779622...
SPY -> https://i.imgur.com/MDp7zHS.png https://i.imgur.com/MDp7zHS.png
Even if it took you 10 minutes to decide to short the SPX/SPY on that information, a leveraged trade made plenty of money over the following days.
There is an abundance of free information available these days. To people who hone their market discernment the edge is arguably more accessible than ever.
- stouset 7y agoWhy do you suppose that people managing significantly larger sums of money than you have available are not also investing based on this information? If they were, your edge would rapidly drop to zero as all of the better connected and better funded investors buy up the over/under-valued assets.
- lbotos 7y agoIn trading as an individual, you don't need to beat the big guys, you just need to hit your objectives (hedging/profit targets). If someone moved later than the big guns, but in the same direction, with reasonable risk assessment/management, then it can still be profitable. If they moved against, and had reasonable risk management, it should minimize losses.
- Nasrudith 7y agoIt assumes rationality not omniscience or complete understanding and the markets are a big place - not space big but still quite a lot even at the level of public news. Even then it would take time for the easy money arbitrage to stabilize.