Friday, March 5, 2010

Playing Follow-the-Leader in Trading Markets

Some big market traders in the news earn big money in up and down markets. And if so, can their method be copied by Main Street as well as others on Wall Street?

Giant investment bank/trading groups have been specializing in high-frequency trading, and now account for a large segment of all computer-generated trading on the NYSE. Their mathematical model/code has worked for them. These math models generally do well, until you hear of an eventual foul-up.

Mathematical formulas are not for Main Street. They are not even for many on Wall Street.

Remember those that failed with collateralized debt in 2008, and at times, years earlier.

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