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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

#151

Post by VBprogrammer »

speedplane wrote: post #83
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…

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…

I find the market for knowledge which others do not have but which aren't actually illegal to be quite fascinating.

There is a company who will break down a brand new car into its component parts and by knowledge of materials and production processes can tell to a very narrow margin what the cost of producing that car is - and therefore the profit potential of each sale. The information about the number of cars sold is either public or more easily obtained than the actual company accounts (public in many jurisdictions due to car registrations).

There are other companies who will buy a bunch of iPhones for example and by carefully analysing the serial numbers can deduce to within a reasonable margin exactly how many have been sold.

Using information like this I'm sure most large trading firms have very good models of the likely performance of each publicly listed company.

I wonder how far down this rabbit hole things go. Do they have people standing outside factories counting how many cars leave on the back of the truck? Do they have access to systems like Galileo in the travel industry where they could figure out how many seats had been booked on a plane, or how many rooms were booked in a hotel? They can then take a good guess at staffing / fixed costs and arrive very much in the correct ball park.

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

#152

Post by tumetab1 »

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 always felt that some shops that only work with ETFs or derivatives look like bucket shops. In some cases it makes me even more suspicious when it seems that you're only trading within that shop... like a betting house.

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

#153

Post by marketgod »

blackoil wrote: post #64
marketgod wrote: post #45

Earlier quoted context omitted.

Shady trading site ;) If people want to pay me money to make money like I am making it, I am not going to say no. If you reject peoples money, that's absurd. I am not saying, come pay me, I am saying, if you want to make money, come pay me. If you want to sit on the sidelines, then feel free to do so. I am not trying to make a sale, I am trying to make a point. I would love for a Warren Buffet, or anyone else, to com…

Why does the site has 4 movie clips of shady people? SEO or to weed out false positives or just because.

Just because. :)

"I tried to teach [people] how to be kings And all they ever wanted to be was soldiers"

Also, it's really vague because anyone really wanting to sign up either has the capital to sign up, or has found my posts on reddit/another place where I post free plans.

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

#154

Post by marketgod »

msmith10101 wrote: post #91
tedunangst wrote: post #57

Earlier quoted context omitted.

You use the numbers provided by your broker at the end of the year.

So the IRS has no way of validating these numbers (they do require brokers to provide the numbers these days)? Overall I'm just not buying that this story is true, in other words.

I don't know about the IRS, but in Canada, your accountant can see every stock you bought by just accessing your tax file, even if you haven't filed taxes. They just can't see when you sold.

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

#155

Post by Retric »

topmonk wrote: post #128
speedplane wrote: post #101

Earlier quoted context omitted.

> Information asymmetry doesn't have to be on insider information. In theory, yes, in practice no.

I used to visit fuckedcompany.com to short sell companies based on information I found there. It worked for awhile until that site became too popular. That was a long time back, 1999 or so.

Which get's into the short vs long term problem. In the short term strategy X works, in the long term it failed. How much of that success is random chance and how much is the value of the underlying data? And how do you avoid losing all benefit when the strategy eventually fails?

The reality is this kind of short term incite based investing does not really scale. Over time the money you spend on paying people to do this is less than your risk adjusted long term benefit.

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

#156

Post by dzdt »

VBprogrammer wrote: post #151
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…

I find the market for knowledge which others do not have but which aren't actually illegal to be quite fascinating. There is a company who will break down a brand new car into its component parts and by knowledge of materials and production processes can tell to a very narrow margin what the cost of producing that car is - and therefore the profit potential of each sale. The information about the number of cars sold…

Satellite imagery counting the cars, not people. [1] http://www.otusintel.com/insights/hedge-funds-gaining-tradin...

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

#157

Post by mattnewport »

This article is typical of the complete lack of ethics in the banking and finance industry. As he acknowledges, this is straight up fraud / theft and yet he is sympathetic to the perpetrators. It's the kind of amorality and lack of ethics that was so visible in the financial crisis. At least in this case there appears to have been some actual enforcement unlike in the financial crisis where essentially nobody in the industry was held accountable for their actions.

It's not ok to defraud people or steal from them just because you think they're stupid, either legally or ethnically. This is obvious to most people but apparently not to the finance industry.

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

#158

Post by HeadsUpHigh »

pbhjpbhj wrote: post #147
vlasev wrote: post #104

Earlier quoted context omitted.

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).

It evens out in the long run so this doesn't apply to this person's trading.

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

#159

Post by phyalow »

wruza wrote: post #121
nickthemagicman wrote: post #114

Earlier quoted context omitted.

Seems like you can automate those technical analysis algorithms that you have and just sit back and rake in the cash

That’s when it stops working, as far as I understood. You turn into next deterministic robot that you just exploited with your’s. The same holds for bet arbitrages; once you automate it, they find you and cut your leverage.

who is they? Is it your broker? why would they do that it? It's in their interest to have you trade as frequently as possible...

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

#160

Post by mabbo »

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.

I worked briefly[0] at a startup that helps get professional traders faster/easier access to reports, data, etc[1]. It was eye opening. Brokerage firms do huge amounts of research to help figure out where the market is going, then only give that information to the big fish who do millions/billions in trades. You and I are not competing in a fair game when we buy and sell stocks.

I just keep my retirement savings in a robo-investment account now, balancing ETFs. Hands off the wheel, don't think about it, don't mess with it.

[0]Fintech wasn't for me. Just didn't enjoy it. [1]StreetContxt. Cool folks, great company.

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