My theory on this is: algo trading on short term, if it works you don’t tell anyone because by trading on the opportunity they decrease the available opportunity to you (efficient market, chaotic systems etc).
Long-term trading doesn’t work like this, in fact you want more people to identify the opportunity and buy to improve your position in the long term, but generally you should be investing on alternative signals not technical analysis.
In other words --- what you and I think isn't nearly as significant as what others are persuaded to think.
For example, I personally think TSLA is way, way, way over bought. The reasons for this are many and varied but still largely irrelevant. My opinion didn't stop an "analyst" from issuing a buy recommendation yesterday with a target price of $265.
Maybe this "analyst" has clear, logical reasoning with supporting computer analysis --- or maybe his grandma is just heavily bought into TSLA. In any case, the stock jumped 2.5% yesterday.
Bottom line --- everybody and his brother is using software. But opinion and psychology remain significant factors that defy computerization. The market can still stay irrational longer than you can stay solvent.
Comments
My theory on this is: algo trading on short term, if it works you don’t tell anyone because by trading on the opportunity they decrease the available opportunity to you (efficient market, chaotic systems etc).
Long-term trading doesn’t work like this, in fact you want more people to identify the opportunity and buy to improve your position in the long term, but generally you should be investing on alternative signals not technical analysis.
In other words --- what you and I think isn't nearly as significant as what others are persuaded to think.
For example, I personally think TSLA is way, way, way over bought. The reasons for this are many and varied but still largely irrelevant. My opinion didn't stop an "analyst" from issuing a buy recommendation yesterday with a target price of $265.
Maybe this "analyst" has clear, logical reasoning with supporting computer analysis --- or maybe his grandma is just heavily bought into TSLA. In any case, the stock jumped 2.5% yesterday.
Bottom line --- everybody and his brother is using software. But opinion and psychology remain significant factors that defy computerization. The market can still stay irrational longer than you can stay solvent.