Forgot your password?
typodupeerror

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46571331) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

Modern Portfolio Theory> is not a book, or a meme... It is taught at respectable universities.. It has limitations (and assumptions), of course... but someone who applies those principles will out perform (on average) someone who doesn't ceteris parabus (otherwise with the same initial conditions)... excepting maybe someone armed with an even better model of reality, and therefore wouldn't apply it.

Pretty much horse gambling theory applies to the stock markets and bitcoin arbiters too...

You can successfully do these things by applying the correct principles.

The fact that you have something better to do, or can afford to do, or can't afford to do, does not apply... If you make better returns doing something else, you should be doing something else.

> What I read you saying above here is that if the market is improving, the swings are getting dampened, but what I see in the historical record (no guarantee of future returns) is that, compared to the period from 1930 to 1970, the more modern "high speed trading" market has sucked balls.

Actually... I think maybe the price wanders within it's natural variance now... In the past, the prices may have been more stable... artificially... because people just kind of stuck with a price more... fewer of them, getting better returns on less liquidity.

Comment: Re:It's like having the first 50 spots in a queue (Score 1) 357

by Procrasti (#46570953) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

Not ONLY does timing provide an advantage...

IT DAMN WELL SHOULD!

Prices based on last week's information are less valuable than prices based on today's information... right up to instantaneous prices... and faster than light would be even better... we could know the price of bread next week... shame physics doesn't seem to allow us to do that.

Comment: Re:It's like having the first 50 spots in a queue (Score 1) 357

by Procrasti (#46570841) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

> Your "last weeks newspaper" analogy is very misleading and insulting. Why not just be honest and admit it's a still legal loophole used to fleece people via being able to complete more actions in the same time?

No, the analogy is apt. It's the normal operation and actual purpose of an exchange... If you're too slow to act, the information from the news release, represented in the price on the exchange, gets absorbed into that price, and you can no longer profit from it... The faster you can react, the more opportunity you have to 'correct' the price AND profit.

That is the way it SHOULD work.

HFTs do that every millisecond... I don't think you do it all.

Many HFTs not only decrease volatility, there are AI systems that 'read' the news and respond to it... Sure, Berkshire Hathaway Industry stock prices might temporarily become overvalued every time Anne Hathaway stars in a new movie, but those who know that can profit from it, and by profiting from it, fix the price... but the AI is profitable ON AVERAGE.. and therefore good... and a better AI that can solve this problem generally will be more profitable still!

> So everyone wins according to you - of course ignoring the sucker that paid more for the shares than if they had time for direct contact and the sucker that sold at a lower price than if they had time for direct contact.

If you studied exchanges, from a game theoretic point of view, or especially a free market theory point of view, the answer is clearly yes.

If there was some rule that somehow we could make the guy who bought too high last week, and the guy who sold too low today get together and come to an agreement at better prices for both of them... we would have punished the guy who, last week, at the right time, realised that the price was too high and sold, and we would have punished the guy who today, at the right time, realised the price was too low and bought! You can't help the first two EXCEPT by removing the opportunity for the latter two to have traded.

And we want more the of the latter two guys trading and less of the former ANYWAY... and this is actually what the market does...

So yes... everyone wins.

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46570595) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

> And, 5% daily swings in a market that only makes an average of 5 to 10% forward progress per year isn't just a gambler's opportunity, it's also a gambler's risk. Invest for 10 years, but, depending on whether or not you got lucky on the day of investment and the day of withdrawal, you might get 11 years worth of planned returns, or 9. I thought that Las Vegas was the place to gamble....

And if you actually knew about investment you could profit everyday from the 5% daily swing... AND play a small role in dampening that swing...AND do better than just the base growth rate.

You need to learn Modern Portfolio Theory.

> Circle back to the French Revolution, if you bothered to pay attention in classes like History.

> Big money dumps a whole lot more than 'two shits' on the little people, and sooner or later, the sheer number of little people who are getting dumped on tips the balance against the small number of people who are holding the big money.

> If big money can present at least a reasonable illusion of fairness, the backlash can be forestalled. When the masses of people are told "work all you lives, save money in the market where it can grow" and then see how their money shrinks in the market while big money grows...

BLAH BLAH BLAH BLAH BLAH...

Yes, the rich get richer, the poor get the picture...

These are problems with WEALTH INEQUALITY... you deal with that problem DIRECTLY... but not by making markets less efficient.

Let markets do their job, solve wealth inequality (free markets can't solve this... it requires political will)... the free market is a distributed information signalling system... let it do its job.

I'm saying you're complaining about the wrong problem.

Comment: Re:It's like having the first 50 spots in a queue (Score 1) 357

by Procrasti (#46564263) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

Because the mathematics of an exchange state that every order is an improvement to what was available without it or it is irrelevant.n

The co-lo's allow them to act faster on the market book than those without... that efficiency means trades get matched faster, or at better prices.. for at least one party... the other only loses in that they didn't get the trade they wanted... and they shouldn't... because someone else actually made a better offer.

It's like arguing that you should be able to read last weeks newspaper and now is a good time to sell malaysian airways, you'll tell your stock broker via a letter and get the trade next week... and be disappointed that all these people with their new fangled internet trading got better prices when they got the news earlier...

HFT is just that exact same efficiency turned up several notches.

This is meant to be a technology website, where people see the value of applying technology to problems... but economics seems to be a really poorly understood subject here... it's a shame, because any understanding of economics shows that this is very good application for it.

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46564185) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

5% swings sound like a great opportunity to profit which also stabilises the market.

Either way, the game theory of exchange operation clearly shows that all orders are of value... that each additional order can only improve on prices, or have no effect at worst.

People like you just complain that the market doesn't operate as you want it to... where prices are always fixed or increasing and the bid/ask spread always available in your favour.

No... the market should (and is) really be designed to serve the most money... because money is information... the most money provides the most information. It doesn't give two shits for a 'big time' trader like yourself.

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46563163) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

No, you're misrepresenting the situation.

Do you understand how an exhange works?

Every single order added to a queue must be an improvement to the current available price if is to be matched or it is irrelevant.

No order can ever make an exchange LESS efficient. Therefore, all HFT is good.

You are speaking pure FUD.

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46562977) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

Maybe you should understand how an exchange works... I've doubt you've ever traded, and don't really understand the system in the first place.

Either one or both of them will get their trade matched either faster or at a better price with S involved. These are the only mathematically possible outcomes of having more orders placed on a system.

Faster matching is generally considered value too... the fact that you don't value it is not anyone's problem... Would you wait a day, 10 days or 10 years for a match? Well then... you can see that going the other way is marginal improvement on value too.

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46562457) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

Absolutely correct... and I have argued this many times before... on a fair and open exchange you literally cannot place a bid or ask that decreases the efficiency of the market.

Except the bit about front running... front running is illegal... because then the front runner could always guarantee that they were at the front of the queue regardless... but this is not the case, otherwise the HFT algorithms would be far simpler.

Comment: Re:Because the above wasn't clear enough for some (Score 1) 357

by Procrasti (#46562353) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

Exactly right, HFT is NOT front running...

People just have a hard time understanding that HFT brings efficiencies to the system and they get paid to do it.

They can't understand the algorithms, see stuff happening on the millisecond time scales and assume that something like algorithmic front running is occurring, when it is not.

Comment: Re:hmm, people out to make a quick buck (Score 2) 357

by Procrasti (#46562299) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

If you have proof they can see the queue of pending orders and the ability to jump those orders in the queue, I would like to see it.

My understanding of HFT is that they have very fast access to the market book, and ability to place orders based on that information very quickly, but don't actually have access to the pending order queues or the ability to have their orders prioritised with in it.

The former is fully legal and expected out of an efficient trader, the second is probably illegal.

Comment: Re:Because the above wasn't clear enough for some (Score 2) 357

by Procrasti (#46562291) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

> They are ACTING BEFORE Alice or Bob can which is why it is a TIME BASED man in the middle attack.

Everybody is acting before the next order comes in... Kind of the definition of a QUEUE.

They get to see the state of the order book first and act on it faster because of their colo deals with the stock exchanges --- again, this changes nothing.

Only if they see Bob's order, then make the order, and it is on the queue before Bob's order, and therefore in the market book before Bob's order, are they doing anything that would actually damage the market and should be banned from.

Ie, they would have to have prioritised access to the QUEUE, not the MARKET BOOK.

And I'm 95% sure this is NOT the case. If you have proof otherwise, now is the time to show it.

Comment: Re:hmm, people out to make a quick buck (Score 1) 357

by Procrasti (#46561871) Attached to: Cryptocurrency Exchange Vircurex To Freeze Customer Accounts

> Nice euphemism for a timing based man in the middle attack.
> Alice asks for shares. Bob has shares for sale. Speedy buys shares from Bob and sells them to Alice before Bob can get the message that Alice is buying and before Alice can get the message that Bob is selling. Of course it can be argued that it's just a "sharp" business practice, the "American Way you commie" or whatever and that a man in the middle attack that adds zero value to the market is perfectly fine.

That's not how it works... unless they are intercepting Alice and Bob's orders before they hit the exchange and placing their orders before Alice or Bob, they are taking a (tiny but existent) bit of risk and doing arbitrage in time, because the exchange is still processing the orders in the order they are received.

If they are intercepting Alice and Bob's orders I would agree with you, this should not be a legal practice... but if the exchange is genuinely processing orders in the order they arrived, you are wrong... they actually are making the markets more efficient, in some sense.

backups: always in season, never out of style.

Working...