Nice. You know the market has been in a historic long bull run these past 9 or so years, right?
Today, it's extremely difficult to get information 5 minutes sooner than everyone else without insider trading. Also, doing such quick analysis can be pretty error-prone, it's not uncommon that bad stories send a stock up and good stories send it down because the price is based on the perception rather than the fundamentals. So even if you have the right information, you may make the wrong bet. I'm sure some are better than others at this, but to make money, you'll need to be better than 50% of everyone else.
You're assuming parent is trading on news, information, or fundamentals. A technical trader wouldn't care about anything you've mentioned.
I don't believe it's possible to consistently make money ignoring "news, information, or fundamentals". Otherwise you're just fitting curves to noisy data. If it could work consistently, then you would be able to read the future.
I’m not here to argue if it works, I’m arguing that there are people who trade stocks with no concern for anything that you mentioned. Argue the effectiveness all you like, people still do it.
By the way, people read the future all the time: it will rain today and it will snow in four months.
I can't perfectly read 5 minutes into the future, nor is it necessary. All that is necessary is to have a slight edge. Just like running a casino, a small statistical edge is enough assurance that any individual game outcome doesn't matter because you will have more wins than losses. And a tiny edge is not hard to do.
I'm doing fine without news feeds at all. An economic calendar and some basic technical analysis is sufficient enough of an edge to win more than I lose.
I guess you could technically call that "trying to read the future", but the (big) difference is that the horizon is on the order of probably a few milliseconds at most, not 5 minutes.
Five minutes from now I'm going to be sitting on my bed.
Five minutes from now I'm going to be male.
Five minutes from now I'm going to have a nose.
That I can read these aspects of the future has no bearing on me being able to tell the future of coin flips.
You'd think so. It turns out that there is plenty of news out there at the right time. Thing is, no-one has the time to continuously check the top 50 or so online news sources to see if their individual interests are being mentioned.
The larger corporations might be on top of things but there will be plenty of individual investors reacting to the news. You just need to react before they do.
First of all, 5 minutes is a very long period of time in the world of high frequency trading, where machines are executing millions of trades every millisecond. Secondly, the same machines are equipped with AI algorithms for reading real-time news feeds, earnings releases, etc, and reacting very quickly on the news. Thirdly, the amount of money that the machines (and their owners) are trading with dwarfs any impact that individual investors would have on market prices.
5 minutes is plenty of time, well shorter than most successful day traders who are trying to predict on 15 minute or hourly horizons, or swing traders trying to predict on daily horizons. There are plenty of trends that occur on the horizons of minutes, hours, days, even weeks.
> First of all, 5 minutes is a very long period of time in the world of high frequency trading, where machines are executing millions of trades every millisecond. Secondly, the same machines are equipped with AI algorithms for reading real-time news feeds, earnings releases, etc, and reacting very quickly on the news. Thirdly, the amount of money that the machines (and their owners) are trading with dwarfs any impact that individual investors would have on market prices.
This comment reads like a science fiction fan's made up ideas about how NASA works. You've taken snippets of vague ideas about the truth and mishmashed them into a frankenmonster that would never exist in reality.
* Millions of trades every millisecond is an exaggeration several orders of magnitude off from the real world volumes of HFT firms.
* HFT algorithms don't use AI. They wouldn't be able to react fast enough if they did. HFT algorithms in practice are rarely more complicated than linear regression.
* Those who use AI in their algorithms are doing so with incredibly varied levels of success. They are typically trading on horizons much longer than HFT firms. They are trading volumes orders of magnitude lower than HFT firms, even if those volumes are orders of magnitude higher than individual investors. From what I can tell, outside of text analysis of the potential sentiment generated by news, the finance industry is pretty pessimistic about AI.
* There are plenty of traders operating successfully across several time horizons. It is not necessary to be faster than HFT firms to be successful. Most day traders like me actually depend on the liquidity provided by HFT firms in order to be profitable; we couldn't do it without the deep books that they provide.
* Likewise, a lot of the predictability of how the market moves comes from the market effects of large actors: when you trade $100M in a day in a single direction, you move the market with you, and that creates a trend pattern that smaller traders can pick up on and take for a ride.