As they get bigger competing with them becomes harder and harder as their overhead per transaction reduces due to volume. Eventually they become the only choice. I feel like with Amazon this is nearly the case. Many local brick-and-mortar stores that would have existed in the early 200's are non-existent today. Even chains like RadioShack and Circuit City are gone. This leaves the next alternative to be slower and more expensive online stores that struggle to compete.
If we model the stock market as a random walk/Weiner process and I got the math right, I think you're almost certainly going to make money (if you stop when you reach a given profit threshold), but you will have arbitrarily large drawdowns. This is similar in terms of the risk/return profile to the martingale betting system. https://en.wikipedia.org/wiki/Martingale_(betting_system)
Oh yeah, I think in my head I confuse the size of the bet with the size of the ranges where it could be claimed to frequently cross the line between sell or buy (which I proposed would be what is most frequently crossed over), but in normal stock markets the market never hits the bottom. Compare this – real markets – to discrete signal between in [0.00,5.00] with smallest change being 0.25, and the market frequently going to zero or near zero, where know it often goes from [0.00, 1.75] to [2.25, 5.00]. In such case you wouldn't lose as heavily. So then markets can be roughly & informally modeled as what's the relationship between how much it somehow "often" changes vs. what's the risk cost, e.g. since normally stocks don't drop to zero constantly what's the bottom part in the traditional market graph that stays the same (it doesn't seem trivial to me what's the best way to consider what's often and what's the bottom part as the bottom part may change over time even if it most of time in real world remains constant, but I think the idea doesn't need one to know the exact alforhitm as yet to speak of values that if often crosses.
So what, then is the exact information value of these candy bars of when the stock has not changed value? What do they tell us? And moreover, are they consistently valued, since the primary tail risk seems to be (probably, I am not expert) market crash, which means one would expect each to have the unchanging candy bar to relative to future performance, so that if we have a reasonable assumption of market crash probability, then some pattern should emerge & things should make sense?
I believe it's trivial to formalize this point & honestly fruitless to not to figure it out, but I will post this comment & perhaps later on return to this. To me the primary here is that the candy bar is what matters, and that if any markets like my [0.00, 5.00] market exist, my strategy would be profitable in those.
Moreover, I think in trading strategy the idea that one wants to guess how fast they can cross the threshold to not to lose, to be able to "Martingale" as you out it is valuable & kellyable.
For clarity, I don't consider anything mentioned even practically feasible or relevant.
I mentally tripped over by forgetting that if stock costs 500 + [0,10] (where it fluctuates) normally, you must in order to participate even without any fees pay 500 + [0,10] and not just the [0,10].
