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

221–230 of 263 posts

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

#221

Post by ksdale »

throwawaymath wrote: post #198
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 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 slide in the direction. I can tell you from professional experience that is most often not insider trading. You might be surprised at the amount of meaningful information that can be legally obtained through research. I used…

Yeah, along the same lines, the actual definition of insider trading is a lot narrower than people think, there's interactions that would be insider trading if it came from the CEO, but is not insider trading if it comes from a guy who overheard the CEO on the phone in a coffee shop or something. Multiply that by thousands of employees with "sensitive" information having unguarded conversations that they're perfectly allowed to have, and there's a lot of information out there.

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

#222

Post by lbotos »

Retric wrote: post #213
throwawaymath wrote: post #203

Earlier quoted context omitted.

I've worked in a similar role. I broadly agree: individual investors don't really have the technical skills or the capital needed to acquire and analyze the dizzying amount of data you typically need find an edge. That being said, an individual who specialized in that kind of data acquisition and analysis at a firm can do well on their own by targeting specific equities with only one or two streams of revenue. But it…

The alternative is to simply look at longer time horizons. In the 1990 you could have beaten the market by simply realizing that the PC was going to explode into an everyday item and simply focused on buying and holding the sector vs any one stock. That's not going to see huge daily gains, but on the backs of huge successes like Dell it could easily have turned ~100k into retirement money in a decade.

So, by that logic, where is the market going now? Isn't this just hindsight bias? What's your decade strategy now?

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

#223

Post by technotony »

Retric wrote: post #213
throwawaymath wrote: post #203

Earlier quoted context omitted.

I've worked in a similar role. I broadly agree: individual investors don't really have the technical skills or the capital needed to acquire and analyze the dizzying amount of data you typically need find an edge. That being said, an individual who specialized in that kind of data acquisition and analysis at a firm can do well on their own by targeting specific equities with only one or two streams of revenue. But it…

The alternative is to simply look at longer time horizons. In the 1990 you could have beaten the market by simply realizing that the PC was going to explode into an everyday item and simply focused on buying and holding the sector vs any one stock. That's not going to see huge daily gains, but on the backs of huge successes like Dell it could easily have turned ~100k into retirement money in a decade.

That worked better when companies IPO'ed earlier. Now most of those gains get taken by private capital. If the equivalent of the PC now is AR/VR/XR or say synthetic biology I can't invest in that without connections and already having that retirement money.

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

#224

Post by VBprogrammer »

Y_Y wrote: post #217
VBprogrammer wrote: post #193

Earlier quoted context omitted.

Funny enough, in the last couple of days I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Of course the problem with that is getting up to the second video feeds (as apposed to delayed video feeds from SKY etc) from a fixed view point. I'm sure you could pay some money to get essentially a security camera f…

BSkyB has a betting arm, why wouldn't they just do this with all the cameras they have?

I'm fairly certain they don't do it because there technical solutions are provided by the company I used to work for.

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

#225

Post by moate »

jliptzin wrote: post #72
oldandtired wrote: post #63

Earlier quoted context omitted.

There are some important rules when doing day trading. 1). never stop studying about what is going on 2). practise, practise, practise (otherwise known as paper trading) before you ever lay down any coinage 3). don't let emotions ever take you away from whatever strategy your paper trading comes up with 4). whatever the environment you had when you did your paper trades, don't allow that to change when you finally pu…

I feel like it's a lot easier to just get a job or start a business that makes at least double the average successful day trader

Sure, it might be easier, but it's not always about "easy". Some of it is adrenaline junkies, or ego, or a love of gambling.

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

#226

Post by usefulcat »

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.

If I can buy X for $1.00 from location A and sell it for $1.01 at location B, then the only thing I need to worry about is what happens if the price moves against me at either A or B between the time I send my orders and the time they're accepted.

I guess you could technically call that "trying to read the future", but the (big) difference is that the horizon is on the order of probably a few milliseconds at most, not 5 minutes.

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

#227

Post by bjl »

PurpleBoxDragon wrote: post #189
tomp wrote: post #183

Earlier quoted context omitted.

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.

For something to be insider trading, one of the people involved has to have breached their fiduciary responsibilities. Low-level employees typically don't have any fiduciary responsibilities to their company, so the firm that collects information from them is under no obligation to make it public.

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

#228

Post by platz »

lotsofpulp wrote: post #215
platz wrote: post #208

Earlier quoted context omitted.

The problem is when everyone is simply tracking an index, there are no more humans in the loop to avert disaster.

We've had quite a few disasters with humans in the loop. And humans are still in the loop, no one is banning them from the exchanges. As long as there is an arbitrage opportunity, why wouldn't someone take advantage of it? The only thing happening is the low value brokers/traders are being taken out of the system and automated, just like people were made redundant in other industries. But for investors who like diggi…

I'm just relaying the observations from someone like Mark Blyth on this topic:

https://youtu.be/TyxcholoFG8?t=45m30s

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

#229

Post by [deleted] »

froindt wrote: post #216
VBprogrammer wrote: post #193

Earlier quoted context omitted.

Funny enough, in the last couple of days I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Of course the problem with that is getting up to the second video feeds (as apposed to delayed video feeds from SKY etc) from a fixed view point. I'm sure you could pay some money to get essentially a security camera f…

>I've been wondering whether you could use computer vision in combination with sports betting to generate more accurate odds given the current state of the game. Totally unfamiliar with the gambling side of things. Do they set odds at the start of the game and maintain them throughout? There are already companies who will do live "coding" of game events to create a stream of data about the game. Players on the field,…

[deleted]

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

#230

Post by Retric »

lbotos wrote: post #222
Retric wrote: post #213

Earlier quoted context omitted.

The alternative is to simply look at longer time horizons. In the 1990 you could have beaten the market by simply realizing that the PC was going to explode into an everyday item and simply focused on buying and holding the sector vs any one stock. That's not going to see huge daily gains, but on the backs of huge successes like Dell it could easily have turned ~100k into retirement money in a decade.

So, by that logic, where is the market going now? Isn't this just hindsight bias? What's your decade strategy now?

I don't see anything right now growing the way the PC revolution did. But, thinking in terms of what stocks you would want to own 10 years from now is IMO still valuable.

Oil companies are still going to be making tons of money in 10 years, but people will start to doubt their future without heavy diversification. Whichever company wins to battle for solar cell manufacturing is going to become the next Exxon, but it's going to be a long brutal slog. Still if your in your 20's buying and holding any company that looks to have an advantage in this space is a long term winning strategy even if most of them will fail.

Post reply on HN