So I met a guy who makes Algorithmic Trading Programs for High Frequency Trading

[mobodick]

Sorry, I though I was talking with someone who knows the basics. Let me explain:

If you make a voluntary choice, that is not using violence or thread of violence, you are not distorting the singals. You are peacefully cooperating.

If you foce people to make some decisions or deprive them of options using violence or thread of violence then you are distorting the signals in the market because people is not choosing according to their needs but forced.

Holy crap what a load of bull.
You expect peacefull cooperation in a place where you make money off of other peoples bad decisions?

"Con-gra-tu-lations, good Sir. You've just aquired all my moneys. I'll hand them over to you with a smile on my face. I bid you farewell."

I think it's you who doesn't understand the basics.
free market = dog eats dog.

Signals, the way you describe them, are nonsense.
You expect the market to tell you "hey, now you can make money".
But that money comes from someone else who has to lose it.
That person does not want to lose their money and that makes them a direct competitor of your profits.
You have no 'right' to a certain 'signal'. The signals you talk of are just observations in certain situations. They are not universal laws of physics!
If you think there should be some signals that will tell you the one and only correct way then you have no idea what is going on.
Signals are observations and NEED INTERPRETATION which is your responsibility, not the markets.
Demanding some form of undistorted signals is like demanding a pair of aces at a blackjack table.
It is just not how it works.

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[mobodick]

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

Haha, but can you define voluntary?
There has been a lot of discussion about the concept of free will as of late.
It turns out the concept of free will is terribly hard to define in detail.

For instance, for a voluntary movement of your arm, your arms muscles will receive a 'move' signal PRIOR to the concious part of your brain processing it.
You THINK you took a voluntary choice, yet your arm moved before you were aware of your choice.
So, is this free will, and if so, who's will is it?

And since the term voluntary relies on the concept of free will, what does that tell us about voluntary trades?

[rotrott]

The average ratio of dollar-earned-to-dollar-lost is about 6-to-1, meaning that every 6 dollars they make they lose 1
He was working on an algorithm that was getting 30-to-1 and 40-to-1 ratios

I hate to jump into a post where so many things are going on and so late, but here I am anyways.

I would stop talking with a guy a just met at an event as soon as I heard something like this.  "Here's the amount average people earn, but I earn 5 times more, I'm awesome".  People who are exceptional don't brag about being exceptional.  You're wasting your time if you want to follow this guy.

[The Script]

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

Haha, but can you define voluntary?
There has been a lot of discussion about the concept of free will as of late.
It turns out the concept of free will is terribly hard to define in detail.

For instance, for a voluntary movement of your arm, your arms muscles will receive a 'move' signal PRIOR to the concious part of your brain processing it.
You THINK you took a voluntary choice, yet your arm moved before you were aware of your choice.
So, is this free will, and if so, who's will is it?

And since the term voluntary relies on the concept of free will, what does that tell us about voluntary trades?

The fact that there are both unconscious and conscious movements of muscles doesn't negate the idea of voluntary choice and free will.  Your body can react to stimuli and will move before your conscious recognizes this, but you are also capable of deciding to move your arm in advance of actually moving it.  If you don't believe me:  Keep your arms perfectly still.  Now think "I am going to move my arm" but don't move it.  NOW move it.  Did it work?  Did you have the free will to move your arm or is every move of ours predestined and ordered for us?  Or is this a trick question since I TOLD you to move it? 

[mobodick]

The concept of the "free market" is very well defined.  Rothbard defines it here, the wikipedia definition is clear and accurate, Mises talks extensively about what markets are and what the "free" market is in Human Action, and I would simply define it as the sum of all voluntary trades and exchanges between individuals and privately owned companies.

Haha, but can you define voluntary?
There has been a lot of discussion about the concept of free will as of late.
It turns out the concept of free will is terribly hard to define in detail.

For instance, for a voluntary movement of your arm, your arms muscles will receive a 'move' signal PRIOR to the concious part of your brain processing it.
You THINK you took a voluntary choice, yet your arm moved before you were aware of your choice.
So, is this free will, and if so, who's will is it?

And since the term voluntary relies on the concept of free will, what does that tell us about voluntary trades?

The fact that there are both unconscious and conscious movements of muscles doesn't negate the idea of voluntary choice and free will.  Your body can react to stimuli and will move before your conscious recognizes this, but you are also capable of deciding to move your arm in advance of actually moving it.  If you don't believe me:  Keep your arms perfectly still.  Now think "I am going to move my arm" but don't move it.  NOW move it.  Did it work?  Did you have the free will to move your arm or is every move of ours predestined and ordered for us?  Or is this a trick question since I TOLD you to move it?  

Well, the weird thing is that altho you THINK that was a COUNCIOUS desicion the actual consiousness machinery doesn't come into action untill after the muscles got their command to move.
So it seems consciousness is an afterthourgh to your subconciousnes's action.
Or so the research says.

There was this test conducted (not sure where to find it now, but http://en.wikipedia.org/wiki/Neuroscience_of_free_will seems to agree with me) that presented a choice to the test taker.
The test taker then had to point out their choice.
And they found that the choice was already made before the subject could become aware of their choice.
So conciousness may be an illusion of control!

Same goes for reasoning.
There is this part of your brain that is specialized in comming up with explanations based on available information.
It does not care if the reasoning is sane or complete or for that matter even possible in reality (checking that is the task of another region of the brain).

There were some very interesting tests done with people with split brains (the region in question resides on one side of the brain)
By feeding both halfs of the brain different information one half of the brain (that included that mechanism) was coaxed to make up a BS story about what the other part was doing.
See the 3rd paragraph of http://en.wikipedia.org/wiki/Split-brain .
What is left out here is that the half that delt with the chicken contained the 'explanation mechanism' and so it made up a story that included the chicken (because that information was available) to explain the other halfs actions.

So we make up some guestimate explanations and THEN have to check them against reality and available information.
But we are quite capable of convincing ourselfs of stories we make up ourselfs!

I find all this very interesting when watching a phenomenon like bitcoin and people doing all this decision making