Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

141–150 of 263 posts

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

#141

Post by Ftuuky »

darksaints wrote: post #42
qwtel wrote: post #32

Earlier quoted context omitted.

I find it hard to believe there’s any day trader using any kind of information making a consistent profit. Isn’t everybody just dabbling around hoping to be in the 50% that outperform by chance? i’ve read about ed thorp pioneering statistical arbitrage in the 80s (?) which would fit the bill of “consistent returns”, but I doubt that there is any of that left close to 50 years later. I’m wondering what all these quant…

FWIW, I'm day trading and I'm making consistent returns, well above the rates of most mutual funds and hedge funds. The caveat is what most fund managers would call capacity. My trading strategy can't scale without severe cuts in those returns. It's extremely easy to buy 10 contracts and hold for 5 ticks. I've never experienced slippage at all. Operating at mutual fund sizes, I would be trading at volumes that would…

Hey, your name refers to the ill-fated Portuguese king, right? I'd love to pick your brain on a few things related to daytrading, could we talk at your best convenience? I'm @Ftuuky on Twitter and Telegram, Monteiro on Keybase. Thanks.

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

#142

Post by pasabagi »

speedplane wrote: post #96
mikestew wrote: post #88

Earlier quoted context omitted.

Today, it's extremely difficult to get information 5 minutes sooner than everyone else without insider trading. You're assuming parent is trading on news, information, or fundamentals. A technical trader wouldn't care about anything you've mentioned.

> You're assuming parent is trading on news, information, or fundamentals. A technical trader wouldn't care about anything you've mentioned. I don't believe it's possible to consistently make money ignoring "news, information, or fundamentals". Otherwise you're just fitting curves to noisy data. If it could work consistently, then you would be able to read the future.

I've never tried it myself, but I don't think it sounds impossible. Realistically, the greatest single stimulus for traders is the curve itself. So it would stand to reason that there would be patterns to its movement, since people and machines expect there to be patterns.

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

#143

Post by gaius »

speedplane wrote: post #100
gonehome wrote: post #99

Earlier quoted context omitted.

That’s the real trick - convince others to give you a lot of money and when you win you get a big cut and when you lose it’s not your money and you just do something else. Seems to be the way all hedge funds operate, maybe can even charge membership fees too.

Right... most traders get big bonuses when they win, but if they lose, at worst they get fired. If you can win for a while and then get fired eventually, you'll still end up on top.

Trader A makes $10m in year 1 and gets a $1m bonus. She loses $10m in year 2, and gets no bonus so the firm is down her $1m bonus.

Trader B makes $1m in years 1 and 2. That’s too low to trigger a bonus, but his firm is up $2m.

The system doesn’t reward trader B so he has to choose: do what’s right for the firm, or take big risks in the hope of a bonus

(Simplifying dramatically)

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

#144

Post by michaelscott »

kgwgk wrote: post #138
speedplane wrote: post #86

I don't day trade, I mostly keep my money in ETFs and other dumb securities. But every now and again, I see the market move in such a completely unreasonable way, most often hammering a stock on some bad, but not awful news. In these cases, I've made small gambles and bought the stock when it's low to see it recover every time. My sample size is small and I'm too conservative to bet the bank, but I haven't been wrong…

So you were able to successfully read the future yourself? Can you predict coin flips as well? ;-)

A straw man comparison. OP is saying that they can intuitively pick up (sometimes) on unreasonable downtrends (when they occur). These happen because of historical events and market reaction to those events. The probabilities are based on dependent events in the case of the market, and on independent events in the case of a coin flip, which is a critical distinction (but does not mean that OP can predict results 100% in either case).

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

#145

Post by pbhjpbhj »

cm2187 wrote: post #111
speedplane wrote: post #83

Earlier quoted context omitted.

The only way you can consistently make money is by knowing things others do not (e.g., insider trading) or by taking advantage of structural problems or inefficiencies in the trading platform (e.g., high frequency trading). I do believe that insider trading is rampant. I've seen many occasions where a large corporate announcement sends a stock up or down, but hours before, you can see the price of the stock slowly sl…

Could also be confirmation bias. If you see the stock going up before a good news you notice it and think this is insider dealing. If you see the stock going down you don’t notice it because it is just a random movement.

Would be simple to test with past data, surely.

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

#146

Post by cm2187 »

pbhjpbhj wrote: post #145
cm2187 wrote: post #111

Earlier quoted context omitted.

Could also be confirmation bias. If you see the stock going up before a good news you notice it and think this is insider dealing. If you see the stock going down you don’t notice it because it is just a random movement.

Would be simple to test with past data, surely.

Yep, assuming every announcement is a complete surprise to the market, which is also unlikely.

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

#147

Post by pbhjpbhj »

vlasev wrote: post #104
speedplane wrote: post #98

Earlier quoted context omitted.

Okay, so you need to read 5 minutes into the future with some X% accuracy, where X is large enough to provide a return. You're still trying to read the future, if you could do that well, you could make money betting on coin flips.

If it's a temporarily biased coin, you can make some money off of it.

If it's a fair coin you can make money off it, and convince yourself you can predict the "market" "because the coin is biased" ... but it's just 'luck' (ie statistical anomaly).

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

#148

Post by kgwgk »

michaelscott wrote: post #144
kgwgk wrote: post #138

Earlier quoted context omitted.

So you were able to successfully read the future yourself? Can you predict coin flips as well? ;-)

A straw man comparison. OP is saying that they can intuitively pick up (sometimes) on unreasonable downtrends (when they occur). These happen because of historical events and market reaction to those events. The probabilities are based on dependent events in the case of the market, and on independent events in the case of a coin flip, which is a critical distinction (but does not mean that OP can predict results 100%…

My reply has to be read in the context of other comments from speedplane: “You're still trying to read the future, if you could do that well, you could make money betting on coin flips.”

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

#149

Post by blibble »

topmonk wrote: post #129
speedplane wrote: post #77

Earlier quoted context omitted.

> I would happily make money for n-years and lose for one, provided the amount lost was a fraction of what I earned. Your caveat there often swallows the rule. Many bet on the market and make big bucks only to lose multiples of it later.

If you set up a stop loss you could make it impossible to lose a huge enough amount on a single trade to wipe put the profit on your prior ones.

all stop losses do is create an order when a certain condition is met (e.g. last trade price is below X)

there's no guarantee it will be created immediately, execute at all, and if it creates a market order you might very well not like the price it does end up executing at

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

#150

Post by arethuza »

cissou wrote: post #56
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

Is running a bucket shop still illegal even if you are open with everyone that it is a bucket shop and people are just gambling?
Post reply on HN