What you are talking about is the age-old ‘Random Walk’ theory of markets. There are a number of famous mathematicians that agree with you. The obvious problem is that everybody “knows someone” that makes more than an index fund does. I made *way* more than any index fund in the last 12 months. I assume that you did as well, so we’ll just call bull*hit on that theory. lol.

What is true is that once you are trading too many contracts on a particular system that you will not get fills anymore. Generally speaking, that’s called ‘arbitrage’. Eventually any flaw in the markets will be found and exploited by someone smart. They will rake in money until too many people figure out how the system works.

There’s always a fine line when an automated system company starts selling their system to others…it’ll stop working once too many people are trading too many contracts on it. That’s why most providers, like http://www.breakoutfutures.com, make it rather clear that they don’t personally use the system that they are selling…they use one that they will never sell. The reason is obvious.

The prices of all shares will represent a rational value and variability will be ironed out.

http://www.kurzweilai.net/articles/art0134.html?printable=1

It has nothing to do with trading, it’s about the exponential rate of technological change. The jist is that technology progress is actually speeding up, to the point where we cannot foresee what will come next.

I for one welcome our computerized trading overlords.

So, where we start to disagree is when you say that computers will always only be as good as the humans that program them. For instance, I myself have made a chess-playing program that I cannot defeat. This doesn’t prove that someone can make a program better than me at trading, but it’s the kind of evidence I look at and extrapolate from.

I believe that eventually computers will understand fear and greed better than we do. I am a little more optimistic than your last paragraph… it won’t be that only a few people will be able to make money. I just believe that all money-making traders will be using advanced tech to trade. To me this is just like how many people used to believe that no one would want a “personal” computer in their home. Very quickly, they were everywhere…

No matter what happens, it will be very interesting to see how technology changes the game going forward. Thanks for your perspective!

I have heard every year of complaints about computer buy and sell programs. I do not know if you are old enough but before computers, I heard of complaints about buy and sell programs too. They were just not called that. More like young idiot gun slingers movig money around quickly.

Yes – computers can make a lot of money quickly figuring out how to price points are out of place. In ways that humans can not even figure out after hours. Yes using computers you can move money around like crazy.

My main two points are that computers will only be as good as the humans who program them and I do not see them making it harder for traders to make money. The markets and the tech to trade thme, is always changing and as long as you change with them, you have a chance.

If I understand what you guys are writting about, that of a few poeple on this planet will be able to trade and make money with in the next 20 years and the rest of us should take our toys and go home. I disagree agree with that because until you can program fear and greed, I think traders will be safe to make a living.

Sigh… I never said you asked for proof, or that you attacked anything. Do you know what “deconstruct” means? Hint: it’s not “to attack.”

Though your post says all your requests were met with silence, I can think of three separate times I’ve tried to describe conditions which would be very hard on humans. One of those times is in this very post! You are either ignoring them or not noticing them, or something, because you have yet to so much as mention them… instead you focus on irrelevant side issues like whether or not anyone actually said that computers couldn’t do calculus long ago.

In other words, I think the reason you frustrate me so much, is that I can’t seem to communicate with you. For all I know, it’s mutual and you think I am misunderstanding everything you are saying. At this point, I can live with that! I just want to move on to something less aggravating.

Anyhoo, I tried to distill my ideas into a funny story with alcoholic fish in the hopes that it might explain why I still disagree with your conclusions even though I agree with many of your steps. I hope I didn’t go too far with the snide comments. I can’t think of anything more to say, so again hopefully this will be the end from me.

I’m sure there are humans that can achieve 300% returns for four years running but not many. The returns at minianalyst are rather remarkable.