Its more obvious than ever that exposure is known somehow. Any play size above this line is a loser. But how is this possible? We are seeing massive swings in the sp500, and yet the least number of everyday people benefit from these moves, despite overwhelming participation.
The theory is have revolves around the idea that a steady pulse is maintained by a very large number of bots on the market.
It is generally beleived that bots are not capable of trading – that its still purely algorithms. I think this is false, and bots are the market now.
The PULSE is steady flow of orders flowing through the books across the entire market. Buys and sells following a specific cadence albeit in high frequency (the key) being the timing of these orders.
The LANGUAGE is established through variables such as speed, time, and size. Like morse code. Ever watch the books and see a bunch of lots fill at random sizes instantly or in a short time? E.g. 154, 42, 3, 34, 55. Then, moments later a similar fill occurs – nearly 1:1 in total size on the other side of the book and split between random lot fills.
This creates a flow where the participants are identified via this flow. If an order falls out of cadence – its identified as a non-bot, a real human just bought or sold and is ready to be traded against.
This is also why the market is propped up extremely high. This cadance would be thrown off in a more affordable market. Its why the most honest stock trading is happening in the low-end mid caps with very high volume.
Its also why low volume on spy can lead to an extremely unlikely outcome. If there are more net sells than buys in the books – outside of cadance, then the bots are going to set the price as high as they can get away with until the books look balanced again.
Anyone whos been trading since mid last year knows its been a lil different lately.
Posted by Thebaxxxx
2 Comments
You expect us to read that in our leisurely time?
Could be on to something…. Go outside now friend.