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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?

#181

Post by rsp1984 »

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.

I think the terms you're looking for are "straddle" and "strangle" options strategies.

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

#183

Post by ww520 »

module0000 wrote: post #18

Short answer: yes. Long answer: not in the beginning, then a long period of breaking even, and eventual profitability. My algos trade commodity futures(nasdaq, 30-year bonds, etc). My platform is Multicharts.NET, which supports writing your strategy components in C#.NET. I'm not a .NET fan, but the platform is solid and this is about dollars, not language preference. Also...regarding HFT - those aren't likely what yo…

That chart is very interesting. It looks as if you can predict where the trend started and reversed. Any pointers on how to decide the LE and SE points?

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

#184

Post by rocqua »

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.

If I recall correctly, your structure describes a future not an option.

If you buy put options for X at 10, and call options for X at 10, then if the price moves down you exercise the call option, and if the price goes up you exercise the put. Unless the price is totally fixed, you make some profit. The real question is whether this profit outweighs the price of both your options.

You need the price to move sufficiently for this plan to be worth it. Especially because in any case, either your put option or your call option is worthless. Thus, you need twice as large a price move as when buying only puts or calls. The upside is that you don't need to care about the direction of the movement.

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

#185

Post by omarchowdhury »

_fq4v wrote: post #110

Yes. I have a very simple algorithm. Expressed as a function f(state of the market) = purchase shares in a fund that tracks the S&P 500 Total return: 12-20%/yr. Sometimes more, sometimes less

When does your algo close the position?

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

#186

Post by omarchowdhury »

vinceguidry wrote: post #129
pingiun wrote: post #117

Earlier quoted context omitted.

Excuse me for being ignorant, but what does TA mean in this context?

Trend analysis. Kind of the first thing they teach you in tutorials, I think mostly because it's easy to convey. I could explain it here, but you're better off reading the Investopedia article. https://www.investopedia.com/terms/t/trendanalysis.asp

They do mean technical analysis.

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

#187

Post by kapauldo »

I have tried for many years and literally all my algos have resulted in loss after extensive back testing. I still believe it can be done but as of yet, I believe it's really really hard to do it. I've tried options, stocks, forex, etfs. The books, blogs, courses all gloss over the notion of repeating your algorithm 1,000 times with asset allocation.

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

#188

Post by rajacombinator »

Of course there are people doing it successfully ... but very different industry than tech - those who know stay silent. It's really not worth getting into unless you already have years of experience imo. Keep in mind you're competing with the smartest people in the world who have much more resources than you. There's just more low hanging fruit elsewhere.
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