Ask HN: Anyone making money through algorithmic trading? • Hacker News Board

Re: Ask HN: Anyone making money through algorithmic trading?

#251

Post by fedecaccia » Sat, Apr 28, 2018, 3:14 PM UTC

1_player wrote: post #234

simonhughes22 wrote: post #145

Earlier quoted context omitted.

I spent the last few months trying to build an arbitrage bot and ran into exactly the same issues. If there's a big price differences there's always a reason, either deposits or withdrawals are temporarily offline, or the fee for transferring or depositing is too high, or for some very small coins it can takes ages to transfer (one transfer took 6 hours, another took a whole week!). Otherwise the volume is so low tha…

> for some very small coins it can takes ages to transfer Why do you need to transfer between exchange? Writing an arbitraging bot is in my bucket list of projects I'll one day work on, and to avoid trasfer times, which are ridiculous with some cryptocurrencies, the plan is to keep a balance of both sides on both exchanges. Example: if you're arbitraging ETH/USD between exchanges A and B, you have an ETH balance on A…

That's the point, you can't have so many balances in so many exchanges, because, in that case, each return is going to be very small. Just to take profit on an ETH USD arbitrage, you have to have 25% of your capital in ETH and 25% USD in exchange A, and 25% ETH and 25% USD in exchange B. So, when you take advantage of the opportunity to buy ETH at low price on exchange A and to sell on exchange B, you are only earning an arbitrage profit on a 25% of your capital. And that profit become less and less if you divide your capital into more coins and more exchanges.

Re: Ask HN: Anyone making money through algorithmic trading?

#252

Post by fedecaccia » Sat, Apr 28, 2018, 3:15 PM UTC

1_player wrote: post #235

fedecaccia wrote: post #209

Earlier quoted context omitted.

Are you talking about pair trading? How do you do it, since you can't go short in crypto? (At least not if you are not using bitfinex)

You short by selling. See my sibling comment: https://news.ycombinator.com/item?id=16931793

Yes I have answered on that link. I think in that case is unrealizable.

Re: Ask HN: Anyone making money through algorithmic trading?

#253

Post by pontifier » Mon, Apr 30, 2018, 7:26 AM UTC

The technique I came up with is based on re-balancing. You do a calculation of what prices you'd need to make a trade at to re-balance your portfolio. My calculator spits out a high and low price to make limit orders at, and if either of those trades happen, you're re-balanced. You can cancel the other trade, and calculate 2 more prices.

Which ever way the market moves you're better off. It's kind of the opposite of HFT.

Re: Ask HN: Anyone making money through algorithmic trading?

#254

Post by pranitbauva1997 » Mon, May 07, 2018, 10:02 AM UTC

nostromo wrote: post #89

ww520 wrote: post #53

Earlier quoted context omitted.

Be careful with volatility. I don't know what he's trading on exactly. But a big part of volatility trading is selling insurance, i.e. selling insurance against the direction of S&P. You can make a lot of money collecting insurance premium, but on the event of a payout, like a sudden big drop in S&P, the loss can be very substantial. See XIV and SVXY in February of this year.

Trading volatility might imply that he's buying options in both directions. Big moves either up or down would be profitable. The only unprofitable move here would be no substantial moves in either direction. (In which case you lose your entire bet, but no more.)

The common strategies are delta heding, gamma hedging and gamma scalping for market neutral trades.