Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Day Trading for a Living?

papers.ssrn.com

Post reply on HN
Print view View original

341–350 of 377 posts

Re: Day Trading for a Living?

#341

Post by shostack »

ad wrote: post #329
blunte wrote: post #154

Earlier quoted context omitted.

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…

> their outsized gains are due to market manipulation, front running, or other insider activities (as in, illegal/unfair). as a former insider at a different, less successful-than-rentec-but-still-successful firm, I doubt it. They have better data, technology, and employees than most other market participants. So then the question is how did they get there: > No one is smart enough; no algorithm or model is future-pr…

Question since you are informed about them and the space...

I had read this[1] and seen some other things about his activities.

Since Mercer and his family seem deeply wrapped up in something that has some worrying ties to hostile foreign nations, a company who has been recorded saying they've done REALLY shady things along those lines, etc...

How feasible is it that RenTech used similar technology and god knows what data to directly impact the geopolitical landscape, and traded off of that? If you can for example...create major disturbances in certain areas, or draw certain attention to various things at a certain scale, could that impact markets?

I want to clarify that I know absolutely nothing about the regulations and mechanisms in place to catch such a thing with the SEC, etc., and don't want this to come off as a conspiracy theory. It's just...with what's come out so far the conspiracy is kind of writing itself, so I wouldn't be surprised if something like this were at play.

[1] https://www.institutionalinvestor.com/article/b17q91wjnnr68x...

Re: Day Trading for a Living?

#342

Post by rvr_ »

The article is very good, but there is another dimension to be evaluated: There are two futures contracts that attract a lot of trading volume in Brazil: ibovespa futures and dollar/real futures. Both contracts have two tickers each, the "full" and the "mini". So we have: INDFUT, DOLFUT, WINFUT and WDOFUT (those two last are the "minis").

The common lore (or myth) goes as follow: The average trader starts trading paper money in a demo account, then goes to the mini to "learn to feel the pain" and if successful migrates to the full contract.

So, to really have the bigger picture, the study must be expanded to include the four tickers. Them we can really now if the "pros" playing on the full contract are really making any money.

Re: Day Trading for a Living?

#343

Post by IAmGraydon »

HenryBemis wrote: post #299

FX trader here. I do trade daily for the last 18 months, mostly algo, and it IS possible to make profit every single day. Just aim for 0.1% per day and you are set for life. You aim for the 0.1% of your capital, so when the market goes against you, you got enough margin to keep the account alive. Anton Kreil has a good video (I will add it later - walking now) that tells the tale how the markets are set up to rip you…

If you really believe that you can make a .1% return every day retail trading leveraged FX, you’re delusional. There’s just no other way to say it.

Re: Day Trading for a Living?

#344

Post by lbotos »

inerte wrote: post #195
kolbe wrote: post #187

Earlier quoted context omitted.

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?

Correct. There are numerous studies showing professional traders (individual or companies) are in fact no better than randomly picking stocks. Just the sheer number of players and variables will eventually produce winners, then we will justify why it happened in the first place.

I just watched a video today via this thread talking about 10k SEC documents.

Pull up Goldman Sachs, go to page 95ish:

https://www.goldmansachs.com/investor-relations/financials/c... (p. 95)

https://www.goldmansachs.com/investor-relations/financials/c... (p. 94)

look at the distribution chart. That's days where rev was positive vs. days not.

In the video they covered 2014/2015/2016 which I why I went a looked at 2017/2018. They are right a LOT. And year over year.

I don't think it's magic. I think they are paying attention and using information to their advantage.

Re: Day Trading for a Living?

#345

Post by lbotos »

Silhouette wrote: post #230
4ntonius8lock wrote: post #120

Earlier quoted context omitted.

Also, the people I've known who call themselves day traders, were inevitably people who weren't too bright and were unemployed with independent income (mostly trust fund babies, but some others who had supplemental income) - From my own personal experience, these people don't even know what EBITDA adjusted earnings are. If a world class mathematician says he will do something, I see the probability of success wildly…

In my entire life, as far as I know I've only ever met one person who played the stock market manually and did well at it. It was almost a hobby for him. He enjoyed analysing individual businesses very carefully, and would look for clearly financially sensible opportunities that were effective at relatively small scales but overlooked by the big players. A favourite type of investment that came up now and then would…

This is warren buffet style value investing.

"Day Trading" is actively taking positions with the intent to sell in the "short-term".

Re: Day Trading for a Living?

#346

Post by jmilloy »

ones_and_zeros wrote: post #109
jmilloy wrote: post #78

Earlier quoted context omitted.

No, because running a business and stock trading are different things.

running a business is just the opposite side of the stock trading coin. If the stocks themselves are random walks, then the underlying company performance must be random walks. If your education does indeed improve the outcomes of the business you manage and run then that would mean stock performance can be influenced by things other than luck. Unless of course you are operating under the premise that company perform…

I don't know. But a business may perform predictably from the insider's point of view ans unpredictably from the outside.

Re: Day Trading for a Living?

#347

Post by turk73 »

tim333 wrote: post #207
blunte wrote: post #154

Earlier quoted context omitted.

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…

There was a video interview with the founder where he explained pretty much how they do it. The employ a lot of bright PhD maths/physics types, get them to come up with all the algorithmic strategies they can think of, run tests with historic data and live trading to see which ones work and then scale up those. There isn't one smart guy or one great strategy - there are dozens of smart guys and loads of strategies an…

I still don't buy it. There's no way that anyone can be that good for so many years running without having insider knowledge or somehow manipulating what is going on. It's not a matter of how many brilliant PhDs you have.

Re: Day Trading for a Living?

#348

Post by turk73 »

helpPeople wrote: post #12
ch4s3 wrote: post #4

Earlier quoted context omitted.

The interesting bit to me is, “we find no evidence of learning by day trading”. This implies to me that the top earners are merely lucky, and have no special knowledge or advantages.

Insider info? The Longer I live, the more I see people profiting off knowledge. A personal example I see of this is in Tech. If you understand tech, you can find areas people don't understand. Those are what's worth investing or shorting. Although if you are limited to day trades I'm not sure this is relevant.

But it isn't that easy. I understand all kinds of incredibly complex tech. There are many more variables than that. You would have to know all the C-level execs, too, and understand what makes them tick and what their foibles and vices are, who drinks too much, who snorts coke, all of it. Then you might know whether a tech company is worth backing or not.

Re: Day Trading for a Living?

#349

Post by bob_theslob646 »

kasey_junk wrote: post #325
mruts wrote: post #214

Earlier quoted context omitted.

Well Claude Shannon and Ed Thorpe did figure out how to beat roullette. And BlackJack. And then Thorpe figured out Black Scholes and made a killing in the markets trading warrents. See my above comment about how statistics does not bear out your fooled by randomness theory.

I don’t have a dog in this fight but Ed Thorpe has one of his funds liquidated via RICO. He’s usually used as an example in the positive case for “only bad behavior gets outsized market returns” argument. Scholes & Merton got famously wrecked in the markets.

This is the perfect example of broken telephone. (If you don't know the full story and fail to post any source)

The reason why they got the RICO.

"From 1969 to the end of 1987 the amount invested rose from $1.4 million to $273 million. Its limited partners saw their wealth grow at 18.2 percent annualized after fees. PNP had no losing years — and not even a losing quarter."

The regulators thought that it was a Ponzi scheme based off that information or did they...

"But most knowledgeable observers believed that the charges — filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act — were also intended to get the Princeton Newport principals to testify against Michael Milken, the controversial “junk bond” trader who had upended Wall Street conventions and who had dealings with PNP."

The regulators thought that it was a Ponzi scheme, when in reality, they mastered the tax code and created losses via hedging, which was legal at the time.

"The resulting charges were related to trades that PNP had made to create losses that would offset corresponding gains that arose during the firm’s hedging maneuvers."

"The Princeton Newport attorney, Theodore Wells, a Harvard Law and Harvard Business School alumnus known for high-profile white collar criminal defense, argued that the trades were allowed under IRS regulations. They even had a former IRS commissioner, Donald Alexander, prepared to testify in their defense. The judge would not permit it."

>I don’t have a dog in this fight but Ed Thorpe has one of his funds liquidated via RICO.

First off, his name is Edward O. Thorp https://g.co/kgs/jfpjL1 not "Thorpe"

>Ed Thorpe has one of his funds liquidated via RICO.

Please post a source because almost all of the charges were overturned.

"Ed Thorp, who was not greatly affected by the criminal charges, was able to restart his hedge fund activity. In 2012 Thorp’s net worth was estimated at $800 million."

All of this information came from this source.

https://communitynews.org/2017/02/28/from-fat-cat-to-rackete...

Re: Day Trading for a Living?

#350

Post by JackFr »

Macross8299 wrote: post #263
JackFr wrote: post #163

Earlier quoted context omitted.

No inside information on commodities. (However trading on embargoed government press releases is illegal. Though rather than kidnapping Clarence Beeks on the train, you can just interview the Florida farmers yourself.)

There is definitely inside information on commodities, it's just rare that insider trading on commodities is prosecuted. You would definitely have an advantage in trading oil/gas futures if you had access to ExxonMobil's seismic exploration reports, for example.

Wow. But if Matt Levine can get it wrong too I don’t feel so bad.

But the insider trading you suggest above, is predicated on having material non public information of ExxonMobil’s.

Post reply on HN