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Day Trading for a Living?

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Re: Day Trading for a Living?

#181

Post by chasd00 »

SilasX wrote: post #130
DSingularity wrote: post #51

Earlier quoted context omitted.

Because that is not a representative sampling of the day trader population. Assuming the techniques of the study were sound, at best we can conclude whether or not day trading Brazilian futures is a sustainably profitable undertaking.

Obligatory joke about the three scientists visiting Scotland in the first time: Biologist: "Whoa, you see that in the distance? That's amazing! All cows in Scotland are brown!" Physicist: "Hold on -- all we know at this point is that there's a population of cows in Scotland that's brown." Mathematician: "No, all we know is, there exists at least one cow in Scotland such that this side is brown." --- With that said, I…

wouldn't the Physicist first need to assume a perfectly spherical frictionless cow?

Re: Day Trading for a Living?

#182

Post by airstrike »

DSingularity wrote: post #51
soneca wrote: post #39

Earlier quoted context omitted.

Why weird?

Because that is not a representative sampling of the day trader population. Assuming the techniques of the study were sound, at best we can conclude whether or not day trading Brazilian futures is a sustainably profitable undertaking.

It's very informative for Brazilian traders, however ;-)

Re: Day Trading for a Living?

#183

Post by nickles »

blunte wrote: post #154
nickles wrote: post #124

Earlier quoted context omitted.

> Renaissance Technologies did not use algorithms to beat the market... This is false. RenTec generated outsized returns for a decade prior to entering into the derivatives with Barclays and DB beginning in 2000. > the bulk of their profits beyond what would have been made just investing in an index fund This is also false. For example, RenTec generated 99% return in 2000 net of fees, while the S&P 500 lost ~8%.

From what has been published, secrecy within Renaissance is so extreme that perhaps only 2-3 people actually know what is going on. So for an outsider, I say it's pure speculation. And I speculate that their outsized gains are due to market manipulation, front running, or other insider activities (as in, illegal/unfair). No one is smart enough; no algorithm or model is future-proof; nobody gets returns like this unle…

> So for an outsider, I say it's pure speculation.

And you assert this on what basis? There's enough that's been published to get some broad idea of what happens within the firm.

> And I speculate that their outsized gains are due to market manipulation, front running, or other insider activities (as in, illegal/unfair).

If they were engaging in illegal activities, it's very likely the firm, which is undoubtedly scrutinized by regulators, any such activities would have been discovered.

> No one is smart enough; no algorithm or model is future-proof; nobody gets returns like this unless they define the scenarios themselves.

RenTech constantly updates its algorithms. Alpha decay is a well known phenomenon. The firm utilizes sophisticated risk management techniques in order to avoid drawdowns, in all likelihood. Assuming this is the case, they're able to more effectively compound returns while simultaneously levering positions. Here's an example of a risk parity strategy [0], which may help explain how risk management works.

[0] https://towardsdatascience.com/ray-dalio-etf-900edfe64b05?_b...

Re: Day Trading for a Living?

#184

Post by melling »

inerte wrote: post #173
melling wrote: post #81

For anyone interested in a great story about a world class mathematician who built a company that has used algorithms to beat the market for the last few decades, James Simons has an impressive record: https://www.ted.com/talks/jim_simons_a_rare_interview_with_t... https://m.youtube.com/watch?v=QNznD9hMEh0 https://en.m.wikipedia.org/wiki/Jim_Simons_(mathematician) One other thing, the Simons Foundation funds Quanta M…

Someone will always beat the market, because that's what we're looking for. I think it was on "Thinking Fast and Slow" that I read it's pointless to analyze the stock market winners, since it's a random process. Imagine there are 30 million entities that own stocks in the US - individual, companies, funds, etc... If on a given year half of them did better than average (with some rounding liberty): 1st year: 15M bette…

Who said it’s a random process? Stock prices don’t go up randomly over the long term.

Joel Greenblatt had 50% yearly returns for a decade.

Renaissance Technologies uses algorithms.

Also, I don’t think you would expect someone to beat the market every year, but over a ten year period, for example.

Re: Day Trading for a Living?

#185

Post by marketgod »

nodesocket wrote: post #170
marketgod wrote: post #147

Earlier quoted context omitted.

I do well with options trading for a fairly long time now. Anything over 25% a year is good for me but I aim for 100% per year. I am a hit over that this year at this point. Firms have a huge amount of money so they have to use other strategies. For someone with less than $1M to trade with going long or short depending on the market conditions is adequate. Also money management is a large factor.

I assume you trading US markets? The US markets have been very volatile the last 1.5 years which makes for more optimal swing trading. If the market was either going down or up in a linear line, most hedge funds underperform in that scenario.

Not for me. Volatile is bad as I made more money the years before. End of last year sucked and parts of this year had unusual losses. I prefer trending markets.

I only trade US equities and in particular large caps or soon to be large caps.

Re: Day Trading for a Living?

#186

Post by gigatexal »

Anecdotal sure but I know many who are trading derivatives at a profit — they’re being conservative but selling and buying options can be lucrative although it goes against the efficient market hypothesis

Re: Day Trading for a Living?

#187

Post by kolbe »

inerte wrote: post #173
melling wrote: post #81

For anyone interested in a great story about a world class mathematician who built a company that has used algorithms to beat the market for the last few decades, James Simons has an impressive record: https://www.ted.com/talks/jim_simons_a_rare_interview_with_t... https://m.youtube.com/watch?v=QNznD9hMEh0 https://en.m.wikipedia.org/wiki/Jim_Simons_(mathematician) One other thing, the Simons Foundation funds Quanta M…

Someone will always beat the market, because that's what we're looking for. I think it was on "Thinking Fast and Slow" that I read it's pointless to analyze the stock market winners, since it's a random process. Imagine there are 30 million entities that own stocks in the US - individual, companies, funds, etc... If on a given year half of them did better than average (with some rounding liberty): 1st year: 15M bette…

If you think everything is just random, you should educate yourself the impact of superior information sources or technology on producing returns. Are you telling me someone who runs the fastest market data feed between Chicago and New Jersey, doing arbitrages between S&P futures and S&P ETFs is just getting lucky over and over again, and it will eventually be revealed that they just won 30,000 coin tosses in a row?

Re: Day Trading for a Living?

#188

Post by aphextim »

rongenre wrote: post #169
aphextim wrote: post #138

Earlier quoted context omitted.

Upper Michigan: If you have $20,000 you get MI Health plan, essentially free healthcare in the poor income bracket (for now anyway unless it gets taken away, sign up where you get food stamps). Rent on a 2 bedroom apartment, as long as you are not in the "big" city of Marquette should be $400-$500. Heck when I was younger we 'rented' an entire 5 bedroom house, two story with basement for $950 (split 4 ways with roomm…

Again - if you've got the talents to make $20k/yr day trading, you can do much better working remotely at far less risk. So higher sharpe ratio. Also the UP is pretty much miserable.

>Also the UP is pretty much miserable.

I feel that is subjective. I know many people in this area who live wonderful happy lives being self sufficient, living off the land and having a large community and frequent family gatherings. The area is beautiful if you like outdoor activities such as hiking, camping, fishing, bike trails and in the winter there is a lot of cross country skiing and snowmobiling. Worst thing here right now is the Opioid crises which sadly is happening in many rural areas across the nation.

I guess personally I would prefer the country life vs fast living in a big city, but again that's my opinion. Especially with the ability to work remote, and the ability to get things shipped up here via the internet it makes life easy.

Gone are the days of having to drive 3 hours for computer parts :)

Re: Day Trading for a Living?

#189

Post by o_nate »

hash872 wrote: post #180

While I agree that day trading anything is an extremely poor idea- why is trading by banks/hedge funds/Goldman Sachs etc. consistently profitable? (Or if isn't profitable, why do they do it?) Is it just the massive informational advantage that they have? I'm not advocating for trading per se (I certainly don't do it!)- just curious about how large financial institutions presumably turn trading profits in light of EMH

The type of trading that is consistently profitable at banks is mostly market-making, which is not a strategy available to a day-trader.

Re: Day Trading for a Living?

#190

Post by phillc73 »

amluto wrote: post #144
dav1app wrote: post #117

They have a reason to make that article: there is a lot of companies fooling the Brazilian people over this. I'm a Brazilian software developer for the financial market. I also made some financial courses on the same university that the authors. Brazilian stock exchange market has exploded in the last years and most of my friends decided to 'work' as traders. None of them with prior knowledge or experience in the mar…

> One interesting thing: they normally sell the course with a private platform to trade the stocks included. I believe that they use that platform to collect data and operate against the traders that use that platform. They know the strategy that they are going to use (because they teach them), so it is easy to operate against. You’re assuming a complex strategy is needed when a simple one can easily suffice: simply…

> To improve this, the broker can throw out the best performing clients, since they might genuinely know what they’re doing.

In a parallel space this is happening in the UK with bookmakers. Winning punters either have their accounts heavily restricted, i.e. only able to place small value bets, or their accounts closed entirely.

Certain states in Australia had to introduce legislation to guarantee a bet size the bookmakers must stand. From memory it was $500 on country race meetings and $1000 on metropolitan meetings.

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