241–250 of 263 posts
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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.
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'm definitely the dumb money in the market, trading on stone age tools by comparison.
I don't recommend anyone do this, but I've achieved 27% returns trading in my retirement account (the past 12 months as of today). I don't trade random stocks, I don't buy and sell often, and I'm a news junkie so I'm constantly reading the news. If I screw up on a buy, then it turns into a 'buy and hold.'
Lastly, I've worked closely with traders in the past, in a tech capacity. I assure you, they're not all the sophisticated quant geniuses with carefully placed bets that the HN crowd seems to imagine.
(edit: grammar)
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>for instance buying American airlines the day they went bankrupt allowed me to pay off a medical bill for a surprise medical emergency. Good job, you got into the same short-squeeze opportunity everybody else did that morning.
Be sarcastic, but quite a few pros claimed it was a terrible investment. Same thing has been happening with amd. It's incredibly low hanging fruit. I just wasn't able to or decided not to reinvent the profits. My original point stands, the pros are terrible at their job. If you can't beat the rate of inflation in a multi billion dollar fund get a new job, despite all the fancy pointless tech.
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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…
What stops big firms from automating a great many small trading strategies?
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> 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. AKA the German Tank Problem ( https://en.wikipedia.org/wiki/German_tank_problem ). Fascinating application of statistics.
Except it only works when serial numbers are sequential, I believe the common practice today is to have serial numbers to be random alphanumeric strings.
To make that random would be a huge waste and also destroy the potential for creating visible patterns helpful within a lot of industries.
Edit: I just thought about redemption codes, which yes, do aim to be randomized have a huge space relative to the issued codes. In those cases, I see what you mean. Serials of digital media are often and intentionally randomized.
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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.
What he describes isn't gambling though, it's a very detailed and tedious list of tasks that are apparently necessary to succeed.
That's like saying that having a very complex system for playing blackjack to have an advantage over the house isn't gambling.
My definition of gambling is "any event in which money is bet on the outcome of an event in which the user does not have 100% perfect knowledge". If you're an insider trader, you're not gambling. If you're Joe-average day trader, you're a gambler.
Being a good gambler is a skill that can be developed. If your game of choice is the stock market, then those things he's talking about are part of how he pushes the odds in his favor.
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The business cycle is a thing. Passive investing means expecting that, and not selling at the bottom. (For short-term liquidity needs, you shouldn't be in the stock market at all).
If the cycle is long enough, like in Tokyo, where the Nikkei is only at about 60% compared to its 1989 value, then it is of no use at all, unless we think of the “in the long run we are all going to end up dead” as a good investment strategy. There are also Black Swan-like events of stock exchanges and entire markets disappearing completely, like it happened in Russia after 1917 and in China after WW2.
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That "strategy" only works when markets are behaving irrationally, such as they have been for the last 10 years, where basically everything just goes up. If you tried that in 2000 (like I did) or 2008, you'd be quickly destroyed.
The business cycle is a thing. Passive investing means expecting that, and not selling at the bottom. (For short-term liquidity needs, you shouldn't be in the stock market at all).
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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…
There was somebody who recently demonstrated that you can derive useful information from simply reading SEC filings, which orthodox theorists would presume should already be reflected in stock prices.