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If all this sounds slightly insane, it’s because it is. Especially when one learns just how small the profits involved are. One HFT at a recent conference in London hypothesized that under ideal conditions—famous last words—his latest algorithm would be able to execute 64,000 trades per day, at an average profit of $0.0001 per trade, for a grand total of $600. Not shabby, by any means, but at that rate, he might as well get an honest job. Another researcher speculated that by buying up all the Tweets issued during a given time period—say, six months—and then aggregating them and analyzing them for words with emotional content (“calm,” “happy,” “relaxed,” and the like), it would be possible to divine America’s financial mood and thus predict the course the Dow will take a few days down the line.

Interesting? Sure. Sound investing strategy? Highly debatable.

What all this means for you is that now more than ever, day trading is a fool’s errand. If you were ever tempted to enter the fray, recognize once and for all that those banks of computers chugging away at their algorithms have you hopelessly outclassed. There’s simply no way an individual human being can compete against a fleet of CPUs that rivals NASA’s. Do not, I repeat, do not try it. You will lose.

There are successful daytraders out there, but it is a tough gig. The better strategy is to extend your time frame and move outside of the chop. Play the extended trend, possibly a few days to a week, or the trend that develops over two to three weeks.

Or abandon that game altogether and play the trends that develop over decades. This requires extraordinary patience which most don’t have, particularly if they have an interest in markets.

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