Comment by throw-qqqqq
2 days ago
Seemingly profitable strategies are actually published all the time in finance literature.
Some also work (usually only for a short amount of time if profitable), most don’t really work at all for various technical reasons (lookahead bias, model doesn’t account for slip/trading costs or assume infinite liquidity or a portfolio too large to realistically rebalance etc.) and some again work, but have unfavorable risk-adjusted return profiles compared to simpler strategies.
Or in the case of batteries: Requires a whole lot of hardware to be bought to get a reasonable economy of scale.
True and batteries have their own characteristics.
They do not last forever, have inefficiency/loss (order(s) of magnitude larger than slippage/fees) etc.
It can seem like the Wild West with many opportunities for arbitrage, but there are practical challenges.
Many countries prefer to improve energy infrastructure through private initiatives, and this is one of the incentives as I see it:
If you get a foothold, profitable trades can be made with only limited competition.
This should also help decrease volatility of electricity-prices, as predictable fluctuations gets evened out from arbitrageurs.