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Don't Steal Money from Day Traders Before They Lose It

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Re: Don't Steal Money from Day Traders Before They Lose It

#51

Post by paulie_a »

anonu wrote: post #25

I was a trader at a big bank for many years. The tools and access I had there put me in a different class of trader that very few other firms or individuals can attain. There is such information and technology asymmetry in this business - its not worth trying to day trade as an individual. Buy and hold forever... only way to invest.

The professional trader must be keeping the profits, I've day traded on a fairly slow volume and consistently get 200-1000 percent return year over year. Meanwhile the professional traders give me a meager 5-10 percent at most. For several years they didn't even beat inflation. Regardless of their access and tech they seem to suck at their jobs.

Re: Don't Steal Money from Day Traders Before They Lose It

#52

Post by whatpad »

akanet wrote: post #8

This is so interesting - one wonders if this is strictly immoral. I propose this thought experiment: What if there was a version of this fraudulent brokerage that conducted this behavior in the open? Let's say their policy is something like, "You trade for real under favorable commissions and margins. If we decide via internal algorithms that you are liable to lose money, we will instead pocket your trade and credit…

The "win in full as normal" guarantee is the weakness. What happens when the producer cannot meet the guarantee for lack of funds due to faulty or too-aggressive algorithmic chump choices?

However, given that hobbyist full-disclosure crypto ponzi schemes are a thing, probably the market has an appetite for anything.

Re: Don't Steal Money from Day Traders Before They Lose It

#53

Post by amluto »

marketgod wrote: post #36
gricardo99 wrote: post #34

Earlier quoted context omitted.

I hope you’re joking. The level of sophistication is insane: microwave networks tuned down to nearly theoretical min latencies, specialized hardware systems where teams worry about shaving nanoseconds, data cleansing teams, research teams, automated news/sentiment analysis... And that’s on top of all their non-technological advantages: connections on the street, getting preferential deals with exchanges, banks, broke…

Not joking. I don't need the sophistication, I trade options and I don't need instant orders, or to be near the exchange. I don't need insider information because I can already see what's going to happen with a high probability. You can view my profile, sign up for a trial and see it for yourself. I don't care about fees, taxes, or any of that because it's inconsequential to me.

There’s a classic [0] scam: send 2^12 letters to 2^12 random people. Half say that some stock will go up next week and the other half say it’ll go down. 2^11 of them will be correct [1]. Send those people similar letters the next week, half with one prediction and half with the opposite. Repeat until you have, say, 2^4 people who have seen 8 consecutive correct predictions. Now offer them more predictions at $500 a pop based on your track record.

It is, of course, quite possible to fool yourself based on this fallacy.

[0] no citation — it’s folklore as far as I know.

[1] I’m ignoring issues like the stock simply not moving.

Re: Don't Steal Money from Day Traders Before They Lose It

#54

Post by rckclmbr »

marketgod wrote: post #35

How much do you want to make per year? How much do you want to start with? What kind of return do you want each year on the initial investment? Believe it. I do make it consistently.

He is hawking his own service, his bio says it all. Arent there rules against this?

Re: Don't Steal Money from Day Traders Before They Lose It

#55

Post by wallstquant »

paulie_a wrote: post #51
anonu wrote: post #25

I was a trader at a big bank for many years. The tools and access I had there put me in a different class of trader that very few other firms or individuals can attain. There is such information and technology asymmetry in this business - its not worth trying to day trade as an individual. Buy and hold forever... only way to invest.

The professional trader must be keeping the profits, I've day traded on a fairly slow volume and consistently get 200-1000 percent return year over year. Meanwhile the professional traders give me a meager 5-10 percent at most. For several years they didn't even beat inflation. Regardless of their access and tech they seem to suck at their jobs.

You must not be considering the total return of all your wealth just a limited subset. If you started with 10k and earned 300% (138.6% continuously compounded) then after 5 years you will have over $10mm. Wait another 3.3 years and you're a billionaire...

Re: Don't Steal Money from Day Traders Before They Lose It

#56

Post by cissou »

jpeg_hero wrote: post #10

Huh, got through the whole article without the author referencing the origin of the term “bucket shop.” Nothing new under the sun when it comes to market manipulation. I like the idea of a whole new generation of crypto market manipulators rediscovering techniques that haven’t worked in eh real markets in 100 years. https://en.m.wikipedia.org/wiki/Bucket_shop_(stock_market) The transaction goes "in the bucket" and is…

I think a big difference here is that bucketeers knew they weren't actually buying the securities, and just waging against one another. The scheme in the article is like a combination of a bucket shop and a concealed ponzi scheme

Re: Don't Steal Money from Day Traders Before They Lose It

#58

Post by ycombobreaker »

thaumasiotes wrote: post #11
mewse wrote: post #9

Earlier quoted context omitted.

That's basically taking a short position on whatever the customer thinks they're buying, right? Whenever the customer wants to sell their position, you'd have to pay them whatever the value was at that time, whether the position had gone up or down. Big risk, unless you're confident that the customers are going to reliably make terrible trades, on balance. It might still be fraud maybe if you claimed to be performing…

There are laws against naked shorting, even when you've personally determined that the stock will tank as evidenced by the fact that an idiot is buying it. There are arguments that naked shorting should be allowed, but it isn't allowed right now.

the parent poster means simply betting against their customers. Not explicitly shorting a security without a locate. Just a lingo thing. In any case, this sounds a lotvlike a Contract-for-Difference type of arrangement. The broker functions as the liquidity provider, taking the contra side to all customer bets. Broker collects the bid-ask spread and hopes that it overcomes losses. One big downside is counterparty risk: if the broker goes bankrupt, the winning customers may not get paid!

Re: Don't Steal Money from Day Traders Before They Lose It

#59

Post by saalweachter »

gricardo99 wrote: post #40
marketgod wrote: post #36

Earlier quoted context omitted.

Not joking. I don't need the sophistication, I trade options and I don't need instant orders, or to be near the exchange. I don't need insider information because I can already see what's going to happen with a high probability. You can view my profile, sign up for a trial and see it for yourself. I don't care about fees, taxes, or any of that because it's inconsequential to me.

Omg, this is so meta. In the comments on a post about guys running a shady day trading site is a guy trying to hawk another shady day trading site? I think you’re barking up the wrong tree. This HN crowd is usually pretty skeptical and you’re making wild claims.

Ehhh, I pay pretty close attention to the Bitcoin threads.

Re: Don't Steal Money from Day Traders Before They Lose It

#60

Post by adiusmus »

If they hadn’t used third party providers they wouldn’t have been caught. Nonko only got caught due to bad service/infrastructure design. So really the systems in place to defend against this kind of thing aren’t working. Or not working well enough. This is just an observation. I have no idea if this is the sort of thing which can be detected.
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