[cltby]

> (and unless you are a crook, there is not)

What sort of shenanigans do you think profitable automated traders are engaged in?

[worik]

Insider trading

Market rigging

Survivor bias (not shenanigans that one)

[User3456335]

Insider trading: there's a lot of information freely available that can be used to make predictions

Market rigging: the market can be affected by your behaviour without you rigging anything

Survivorship bias: this can be argued for any competitive industry. Don't engage in it unless you're good at it.

[worik]

Sigh! People really want to believe there is some magic trick to trading. There is not.

> Insider trading: there's a lot of information freely available that can be used to make predictions

The efficient market hypothesis deals with that. The freely available information is priced in (nothing is free, and it takes time)

> Market rigging: the market can be affected by your behaviour without you rigging anything

I am talking of things like: https://en.wikipedia.org/wiki/Libor_scandal and https://en.wikipedia.org/wiki/Forex_scandal. These are incidences where the traders got caught. Given the millions at stake, do you think many are caught?

To win at active trading you need an edge nobody else has. There have been cases of traders having insights not known to others. Pairs trading is the only example I know of. In that case the people who kept it secret made out like bandits for a few years, then the secret leaked and it is no longer profitable

The most common legal edge players have is scale: They are huge and nimble and can take advantage of opportunities at scale. It goes really well, until it does not, and another trading house collapses.

The most common edge I believe, after studying it for a decade, is crime. Big trading house, big crime