somebody needs to trade: systematic liquidity provision of last resort
lots of good trades are basically:
"someone NEEDS to trade, and i'm happy taking on their risk until i can get rid of it"
you're effectively looking for demand for liquidity that overwhelms the usual suppliers of it.
of course, providing last-resort liquidity is stilll a competitive game.
where a non-insider may be able to get an edge, is in trading systematic styles that have you doing this noisly *on average* without predicting flows or having to respond really quickly to dislocations.
pairs trading, for example, probably has you roughly in the right place at around the right time - so you could harvest a bit of "liquidity premium" in a systematic, non-precise way.
Most other forms of "statistical" arbitrage too, I think.
most won't make it work, but I don't think it's entirely inaccessible, with skill.
a useful model is that pro trading is a big net that catches all supply/demand imbalances and disperses them so that:
- short term prices look efficient outside the net (hard to make money trading)
- all the positive PnL from the trades that make it efficient is kept internal
this is why citadel pays so much for retail order flow - cos it's super confident it can keep all that stuff in the net.
some stuff leaks out of the net, sometimes, and it's very noisily predictable where it leaks based on limits to arb/constraints and repeating beahavioural anomalies such as under-reaction (trend) and seasonal periodic effects.
most stat arb is just this, i think: sitting outside the net where it is statistically more likely to leak.
beep...boop.