Geeks Trump Alpha Males as High Frequency Trading Takes Over
By Trader Mark
03 December 2009 @ 09:15 am EDT
For those newer to the website, we have been early pointing out the changing character of the market, due to the increasing dominance of computer based trading. I first started noticing it in 2006, when the market was wickedly "calm" if you will... this was pre blog and I had been noting on some message boards how the S&P 500 had not dropped more than 1% in any 1 session for more than 10 months (I don't remember the exact figures but it was some absurd statistic). I began wondering about computer based trading and the increasing dominance of ETFs as "monolithic trading" began to really enter my conscience. The incredible performance of James Simons of Renassiance Technologies had also stirred by imagination... what the heck was this guy and his team doing that was minting money year after year? [Apr 8: Hedge Fund Manager - Good Work if you can Get It] Effectively, I believe much of what has happened the past 3-4 years is a massive "copy cat" of the Simons model.
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