That said, sometimes people get lucky so YMMV. And the Boglehead philosophy and success (following by Jack Bogle, the creator of the first Index fund) has been forged primarily over the last few decades of US markets and people can question if anything substantial might change and when. Always lots of discussion about such things on that web board. https://en.wikipedia.org/wiki/John_C._Bogle
Basically, pick anything that's too small and niche for the serious players to tackle.
(If you want to invest in stocks, just by an index fund.)
I suggest you get some hobby that's not in finance. And put your money in index funds.
It might not sound like it, but this is truly fantastic advice. Really. I suggest doing the same.
Other hobbies are less dangerous.
Also, the details in this article are implicated in all sorts of HN threads, so it's useful to have a place to link to when people start debating how market makers work or things like that.
you can see thousands of orders being placed, removed, eating other orders.. buying skirmishes, resistance lines... and to top it all off you can place an order and see it show up on the battlefield
Shameless plug for my site https://last10k.com that has tools to read 10-Ks more efficiently. 10-Ks contain a wealth of information including lots of disclosures, business ongoings and management discussions but 10-Ks can be 100+ pages and are very verbose.
Out of print, but gwern has a pdf: https://www.gwern.net/docs/economics/1688-delavega-confusion...
that intern wrote a very well and modern view of market microstructure, which many people lack knowledge of.
HFT just means you trade a lot and you have low tick to trade latency. It doesn't say much about why you are trading.
For example you could have a HFT stat arb strategy in which you are arbing higher dimensional factors that are pretty far from obvious.
In general, the speed wars are over and everyone is reaching deep to become as smart as possible. Or in the other words, just being fast is no longer an edge, it's a commodity.
I'm curious what the best techniques for being "smart" are when you have to have such quick turnaround. Are these rules-based techniques, statistical but interpretable, or black box?
But you're right that being fast and smart is pretty hard. You almost always have to sacrifice one for the other. Different firms operate on different spectrums of this speed vs smarts divide: some are faster and dumber (relatively), some are slower and smarter. But everyone is trying to up skill (analogous to moving up on the value chain), because the markets have gotten fiercely competitive at the nanosecond to millisecond scale, especially on american venues (CME for example is a straight shark tank).
What does this mean (HFT stat arb strategy)? What higher dimensional factors ? Ty!
? HFT facilitates liquidity, liquidity facilitates efficiency.
Nobody really cares (except for traders) if the US 10 year note is at 1.54% or 1.52%, but rather if it's at 1.5%, or 2.0%, or 3.0%. Or even 10%.
Can you demonstrate?
https://www.worldscientific.com/worldscibooks/10.1142/11484#...
Read the 10-Ks, think about what people (will) need, what kind of margin pressures and competition dynamics will play out across the economy, read finance history books, play with pricing models. Focusing on market structure is kind of like focusing on network adapters and packet switching details, focusing on valuations/pricing/finance is like building deep ML models. Of course you need the damn networks to work, but guess what - some pretty clever people have already solved that for you.