[ExI] Efficiency of algorithmic trading

[spike]

...
On Fri, Apr 29, 2011 at 06:10:38AM -0400, Rafal Smigrodzki wrote:

> ### Well, why should the clueless expect to gain? Inefficient actions
> (i.e. the short-sighted greed of the small investor) lead to incorrect 
> pricing (i.e. prices that do not accurately reflect the underlying 
> values of assets) and better investors (i.e. investors who understand 
> the future over larger time scales) correct the inefficiencies, 
> reaping a reward. There is nothing wrong with it, and it's the reason 
> why I do not individually trade on the stock market...


Ja.  It looks to me like the programmed trading serves the purpose of
obviating having guys down on some trading floor shrieking buy and sell
orders like madmen.  That always seemed to me the definition of absurdity.
Why not just set up a program that just does whatever it is they are trying
to do there, and why do they all need to be on Wall Street anyways?
Couldn't they watch the ticker tapes from anywhere?  Let anyone who wants to
play that game do it from their own home on their own time.  Think of all
the savings.  

In fact, any strategy used by the human players can be written into computer
code.  That frees up the world's limited supply of RSPs (Royal Smart
Persons) to do meaningful things like solving energy crises, while the
computers tirelessly shout trade orders silently.  The human comes in the
next morning to see how much, if any, money they have left.

spike