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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

#181

Post by anonu »

Erlich_Bachman wrote: post #172
bitxbit wrote: post #165

Earlier quoted context omitted.

This is a joke right? You were a flow trader for a dealer. How is that even remotely the same as buyside regardless of size? The tech at bulge doesn't even compare to what some of the sophisticated buysides have in place.

He could have been on the buy side within the bank? Some investment banks still do this kind of business, even if within certain limits.

Correct. I always traded prop, even at a bank. The Volcker Rule was a joke. It caused some papers to be shuffled around and a lot of noises were made. The current Administration pretty much certified its death.

Also - having access to flow creates substantial information asymmetry and opportunities.

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

#182

Post by austhrow743 »

speedplane wrote: post #98
saosebastiao wrote: post #92

Earlier quoted context omitted.

> If your average trade lasts less than 5 minutes, then you can conceivably make money only if you can read 5 minutes into the future (not currently possible), or have tools that allow you get news/information faster than everyone else, analyze that information, and act on it, 5 minutes before everyone else. I can't perfectly read 5 minutes into the future, nor is it necessary. All that is necessary is to have a slig…

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.

People can read five minutes in to the future.

Five minutes from now I'm going to be sitting on my bed.

Five minutes from now I'm going to be male.

Five minutes from now I'm going to have a nose.

That I can read these aspects of the future has no bearing on me being able to tell the future of coin flips.

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

#183

Post by tomp »

parkaboy wrote: post #180
VBprogrammer wrote: post #151

Earlier quoted context omitted.

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…

>> Do they have people standing outside factories counting how many cars leave on the back of the truck? Yes. They do. I took a car ride with someone a few years ago who claimed to work for a consulting firm that the big banks+others hire to gather on the ground intel from companies through things like factory tours and shooting the sh*t with employees at bars near the warehouses etc.

The problem with that is that it could be insider information (or, at least, it isn't obviously not insider information, the way info about the serial numbers from iPhones that anyone could buy is public information).

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

#184

Post by gruez »

phyalow wrote: post #159
wruza wrote: post #121

Earlier quoted context omitted.

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...

They = other traders in the market

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

#185

Post by Ntrails »

qwtel wrote: post #32
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 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…

> I doubt that there is any of that left close to 50 years later.

Based on what? The conditions for stat arb to be possible haven't really changed.

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

#186

Post by froindt »

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…

>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 people standing outside factories counting how many cars leave on the back of the truck?

Mostly as an exercise for myself, I've been curious to make a system that would do this. Cameras on all the entrances, license plate tracking, and maintaining an "inventory" of vehicles in the facility.

You could track shift change, number of consumer vehicles (estimating number of people working), number of semis, etc.

Throw things into mechanical turk and you could categorize semis. Maybe that factory that makes big things needs one big component for every unit, and it's super obvious when it comes in on a semi. Boom, that's going to be a strongly correlated factor to production.

Consumer vehicles versus true production over time could help find increases in efficiency.

There are tons of ways to leverage little bits of data, and I think a vehicle in/out tracker would get you a LOT of information.

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

#187

Post by pbhjpbhj »

HeadsUpHigh wrote: post #158
pbhjpbhj wrote: post #147

Earlier quoted context omitted.

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.

I think that's a statistical misunderstanding. It's likely to even out; across a population it will even out. An individual however can get "more heads than tails" by chance.

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

#188

Post by froindt »

tomp wrote: post #183
parkaboy wrote: post #180

Earlier quoted context omitted.

>> Do they have people standing outside factories counting how many cars leave on the back of the truck? Yes. They do. I took a car ride with someone a few years ago who claimed to work for a consulting firm that the big banks+others hire to gather on the ground intel from companies through things like factory tours and shooting the sh*t with employees at bars near the warehouses etc.

The problem with that is that it could be insider information (or, at least, it isn't obviously not insider information, the way info about the serial numbers from iPhones that anyone could buy is public information).

The gist I've read in the past is that basically as long as it's not obtained illegally (e.g. breaking in and stealing) and there's no benefit to the person providing the information, it's not insider trading.

Matt Levine writes on the topic pretty regularly. Here's an example with a number of interesting situations.

www.businesslive.co.za/amp/rdm/business/2018-02-01-matt-levine-the-fine-line-between-insider-trading-and-knowing-more-than-others/

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

#189

Post by PurpleBoxDragon »

tomp wrote: post #183
parkaboy wrote: post #180

Earlier quoted context omitted.

>> Do they have people standing outside factories counting how many cars leave on the back of the truck? Yes. They do. I took a car ride with someone a few years ago who claimed to work for a consulting firm that the big banks+others hire to gather on the ground intel from companies through things like factory tours and shooting the sh*t with employees at bars near the warehouses etc.

The problem with that is that it could be insider information (or, at least, it isn't obviously not insider information, the way info about the serial numbers from iPhones that anyone could buy is public information).

I wonder if the contract with the firm is setup so that the information they gather is public, if anyone can find the application in the back of the drawer in the basement if you show up in person and request the form from the admin who is only there 2 hours a week.

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

#190

Post by ed312 »

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.

This would also require you to log all past predictions for a large enough sample of events to be worthwhile.
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