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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: Dustin who wrote (10537)	10/31/2000 1:55:32 PM
From: TraderAlan	Read Replies (1) \| Respond to of 18137

Dustin, <I'm just a better trader (faster) than the rest of the crowd> Of course that's an ineffiicency that you're exploiting. Unfortunately, there are times that you need to be slower than the crowd to make money. Alan

To: Dustin who wrote (10537)	10/31/2000 6:09:37 PM
From: Eric P	Read Replies (2) \| Respond to of 18137

Dustin, Do you think that your method was really finding and inefficiency in the market? Or could it be something else? I used to feel the same about my method, but now feel that I'm just a better trader (faster) than the rest of the crowd. That's not inefficiency anymore is it? (I'm seriously asking) I agree with Alan. By being faster than the crowd, you are buying a stock at a lower price, before the crowd pushes the stock up. Using the efficient market hypothesis, ALL factors are already built into the price of a stock at all times. However, since speed seems to be an issue (i.e. "faster than the rest of the crowd"), the market is not efficient in these cases and can be exploited for profit by beating the crowd to the punch. Clearly these opportunities are not simple to find and they don't last forever. However, the key to successful speculation is to identify what seems to be working and stick with it so long as it continues to be successful. In short, in my opinion exploiting inefficiencies is the basis for every single successful trading strategy. If the market were truly efficient, all future price movement would be totally unpredictable and eliminate any potential for covering your transaction costs. The fact that a successful trader can predict price direction (on average) is an indication that inefficiency exists in the market. -Eric