Jul

13

Part of the new game seems to be to make each favorable price last for such a small nano-second that it's impossible for a person not a champion video gamer to place an order. Thus the only way to get those favorable prices is with the limit orders. And because of the unlimited capital, ability to borrow at zero, bailout investments, purchase of all non-performing assets at favorable prices from the tarps, ability to pledge non-performing assets at face value, and placement of their physical facilities at the exchanges themselves, and programs and technology and rebates that give them the first crack and priority at any limit price level, you can't compete with the cronies and banks on the limit orders. So it's catch twenty two. Only a Sholem Alechem could appreciate the impossibility of this situation. You can't compete unless you wear official clothes, but if you wear the official clothes, you're a flexion or worse.

Jim Sogi writes:

Despite all the flexions' advantages, if your order is in queue ahead of theirs at the right price, you should be able get your fill before theirs. I don't see how their advantages, other than money and info, prevent you from placing that order ahead. Even the long string of 50 lot orders 100 lot order shooting like machine guns won't necessarily stop a price move or be at the right time or price. I try to see their size and position as a disadvantage, making them slow movers, dinosaurs, and having specific weaknesses that ought be able to be taken advantage of. This is the the tactic used by the Taliban, the VC, the Insurgents in Iraq, when fighting a more heavily supplied, heavily connected, better financed foe. They used stealth, night raids, hit and run, ambushes, and hide during heavy action periods.

That brings me to the next subject. The record of prices in charts provides a good record and good memory. It appears helpful to set orders in relation to prior price action, as there is both a record, and a memory at those particular prices. That record may not necessarily appear in the raw price data alone as visibly. Every statistics text you have recommended said eyeball the data for interesting relationships. Why not use that record in addition to prospective price expectations which don't give good specifics of price, but more typically of time/yield.


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