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by mewpmewp2 979 days ago
Alert: It's not going to be as simple as this to make money even with large numbers. So don't fret about not having the money and missing some golden opportunity.

There are enough actors out there trying to develop complex algorithms to find an edge, and so there wouldn't be any simple edges like this left anywhere as they would be arbitraged away.

If there is a simple pattern, it is noticed and traded until the pattern disappears.
2 comments
saalweachter 979 days ago
Also, if you do find an edge, you need to be prepared for what happens when everyone else discovers your arbitrage opportunity, and/or you tap out the potential of it.

A number of failed finance companies have the story: find a legitimate arbitrage opportunity; take on a billion dollars in investment to exploit the opportunity; make bank; other people discover your arbitrage opportunity and jump on; stop making bank; try riskier and riskier investment opportunities to keep it going; engage in outright fraud to keep it going; go bankrupt and/or to jail.

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mewpmewp2 979 days ago
Stock market is such a slippery addiction slope. With casino a reasonable person would know, the odds are stacked against themselves, but with Stock Market, there's no guarantee and it's really easy to convince yourself that you have an edge, and sometimes it works for a while, and then it doesn't, but you are already used to that feeling of reward, and as you said you will start to engage in riskier and riskier opportunities to get that feeling back.
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kqr 979 days ago
Has hmate9 pointed out, a simple pattern like the one described can persist indefinitely – but the risk of exploiting it is priced in already.
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mewpmewp2 979 days ago
Yeah, you could find a pattern that wins 99% of the time to yield 1% of what you risk, but you don't consider that there's always 1% odds of losing it all and it's priced in, it just hasn't happened to happen yet, but systems with more precise data have accounted for it.

E.g. something like selling 0dte options sufficiently out of money might seem like a free money hack, but once something unexpected happens you are down to just "who could have possibly foreseen that event to occur, my decision making was solid.".

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