Easiest target to blame Algos but far from right most times. Retail thinks that there is something mystical about these algorithms but take it from one who used to work in the industry, it is far from the mindless that many think it is...
It is driven by human user settings and parameters
The gist of it however is quite simple. Per
Post #:76674904 It's main aim is to wear you down. You are competing against a bot that is automated...
- It doesn't get tired
- It doesn't get emotional
- It doesn't miss a beat
- Most of all it doesn't care how much in the red it is... not that it spends much time in the red either.
It will sell up to a specific TA level and it will buy at a specific TA level because that is what it was designed for. It knows where to hunt stops and it knows where to trigger runs. It will profit from you if you let it... It is the perfect fund manager in every way possible. It's even cheaper than 10 fund managers and can do the work of 100.I've said it here before and I'll say it again. The only way you can win against it is by going long. It is its one and only Achilles heel. It cannot accurately predict long term patterns as most complex systems in the market are based on tiered Bayesian algo, practically the same algo that predicts weather patterns. The ability and probability of it accurately predicting further in the future will never be that accurate.
What are those parameters? it is derived from statistics, The Bol and moving averages on your chart is just a simpler way of looking at it....See
Post #:62657479 as as example. CBA will have similar parameters on the left hand of the chart below.
If you really want to know more, try working for these guys... Give them a call.https://optiver.com/
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