PRLA: Pattern Recognition Latency Arbitrage
Markets do not reward prediction.
They reward early pattern recognition and open’s the flood gates for pattern formation aka authorship.
Stage 1
Information becomes visible.
↓
Stage 2
Pattern emerges.
↓
Stage 3
Pattern recognition.
↓
Stage 4
Execution.
↓
Stage 5
Consensus.
The edge exists between Stage 2 and Stage 5.
That distinguishes it from HFT latency arbitrage.
Traditional Latency Arbitrage
Edge: Faster information transmission.
Pattern Recognition Latency Arbitrage
Edge: Faster pattern recognition using the same information.