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Ask HN: Anyone making money through algorithmic trading?

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

#151

Post by dorgo »

Retric wrote: post #64
windowshopping wrote: post #22

Earlier quoted context omitted.

Mostly I believe this too, but I am familiar with some people who can consistently make money year after year. From talking to them it becomes clear that they understand things very, very deeply. See /u/Fletch71011 on reddit-- he's always happy to discuss things. He's made millions trading options, mostly algorithmically as I've understood it. The methods he uses are sufficiently complex that you need to be very well…

A 50% chance to lose money per year still allows for very long strings of success. Some strategy's trade ~80% chance of a small win for a ~20% chance of a large loss which means lucky streaks could last for decades.

So, basically you are saying that it's all gambling and nobody has a better strategy / better information than everybody else. Some are just lucky and it is all because of the survival bias.

I agree with you in that it is a possible explanation, but I disagree in that it is the only one possible.

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

#152

Post by [deleted] »

tclancy wrote: post #107
starpilot wrote: post #103

Earlier quoted context omitted.

> Feel free to contact me at herve76@gmail.com if you need me to write your own custom trading algorithm. Why would you do this when you are already making $500/day ($182,500 per year)?

I'd have the same question, but note the word "can" in the $500-1000 range. And the lack of how much it can lose in a day.

[deleted]

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

#153

Post by jakevoytko »

jimbob21 wrote: post #138
lisbakke wrote: post #47

Right now I have one of (or the?) fastest HFT bot on gdax -- I define "fastest" as being on average the first bot to re place maker orders at best when the price moves. With 1 being the first order in line it's currently averaging 1.39 on price changes -- so it gets a ton of matches. The bot uses a NN for predicting the price. I've been working on it for 3 months and so far the bot is profitable. If anyone out there…

How do you make any money when spreads are at 1 cent?

A half a penny at a time

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

#154

Post by lordnacho »

windowshopping wrote: post #22
mbroshi wrote: post #17

I wonder whether the premise of your question is faulty. If you ask enough people: "In your last 100 flips of a coin, did you get more than 60 heads?" some will truthfully say "Yes." Unfortunately, that does not mean there's anything special about their coin-flipping strategy, or that you will be able to generate a successful coin-flipping strategy. My guess is what you really want to know is "What is my expected gai…

Mostly I believe this too, but I am familiar with some people who can consistently make money year after year. From talking to them it becomes clear that they understand things very, very deeply. See /u/Fletch71011 on reddit-- he's always happy to discuss things. He's made millions trading options, mostly algorithmically as I've understood it. The methods he uses are sufficiently complex that you need to be very well…

As a former vol trader, I think this is possible. I have friends who were former pit locals and are now sitting at home trading options.

It is all moving to algos, though.

With vol it's one of those specialized areas where it's probably quite hard to learn without having sat on an options desk. Even the way it's presented in the books does not give a good picture of what you're supposed to do.

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

#156

Post by Sohcahtoa82 »

herve76 wrote: post #24

I built my own intelligent algo trading platform for node.js. It uses market data from Binance and Bitfinex. My best strategy uses unusual volume amounts on Bitfinex to trade on Binance (mostly BTCUSDT and other USDT pairs), an advanced dynamic arbitrage. It can make up to 500-1000 usd per day but not really much more. I started testing a LSTM neural network to optimize the gains and reduce the risks, still early but…

> It can make up to 500-1000 usd per day but not really much more.

This is entirely meaningless without knowing how much you started with. There's a reason why ROI is often stated as a percentage.

If you have a billion dollars invested, gaining $500-1000 isn't much. If it's $10,000, then that amount is pretty significant.

It's like claiming you drive a fuel efficient car because you can drive 500 miles on one tank without disclosing the size of your tank.

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

#157

Post by dotBen »

I know a few people doing this, one person in particular who has discovered a near-zero-risk quirk that can be exploited with algorithms for fractional %age gain per transaction/cycle/(kind of being vague here sorry). He's been able to deploy large $MM amounts of capital to create significant gain nonetheless.

However none of them will talk about it, certainly not on HN. I'm mentioning it simply to highlight I think you'll find an anti-selection bias by asking here.

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

#158

Post by philipodonnell »

windowshopping wrote: post #22
mbroshi wrote: post #17

I wonder whether the premise of your question is faulty. If you ask enough people: "In your last 100 flips of a coin, did you get more than 60 heads?" some will truthfully say "Yes." Unfortunately, that does not mean there's anything special about their coin-flipping strategy, or that you will be able to generate a successful coin-flipping strategy. My guess is what you really want to know is "What is my expected gai…

Mostly I believe this too, but I am familiar with some people who can consistently make money year after year. From talking to them it becomes clear that they understand things very, very deeply. See /u/Fletch71011 on reddit-- he's always happy to discuss things. He's made millions trading options, mostly algorithmically as I've understood it. The methods he uses are sufficiently complex that you need to be very well…

Its not that complicated, he mentioned using off-the-shelf software, there just aren't a lot of retail traders who can open an office in the CBOE and hook directly to the exchange computers while running enough contract volume to essentially make markets.

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

#159

Post by Blackstone4 »

dotBen wrote: post #157

I know a few people doing this, one person in particular who has discovered a near-zero-risk quirk that can be exploited with algorithms for fractional %age gain per transaction/cycle/ (kind of being vague here sorry) . He's been able to deploy large $MM amounts of capital to create significant gain nonetheless. However none of them will talk about it, certainly not on HN. I'm mentioning it simply to highlight I thin…

Crypto or the stock market?

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

#160

Post by skolos »

e12e wrote: post #149
nostromo wrote: post #89

Earlier quoted context omitted.

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.)

Could you expand on how that would work? If X is priced at 10 units of currency, and I promise to buy 1 X for 11, and to sell 1 X for 9. And X stays available for 10, I end up paying 11, receiving 9 - netting a loss of 2. If I manage to promise a sell/buy at 10, I even out. What do I lose with low volatility? And how do I make money "both ways"? Clearly I lack a basic understanding of the concepts involved.

In volatility trading you don't cary naked options (you hedge them usually dynamicaly - readjusting hedge every now and then) and usually close positions before options expire. So your analysis does not apply. If you want to get understanding on how to trade volatility the "Volatility Trading" by Euan Sinclair is excelent.
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