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Show HN: I discovered a trading algorithm that returns ~24.85% annually

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Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually

#131

Post by sbierwagen »

yaitsyaboi wrote: post #124
blake1 wrote: post #104

Earlier quoted context omitted.

If you’re looking for information on quantitative trading, and are considering relying on a YouTube channel, please just park your money in an index fund and go read about LTCM, Black Tuesday/Friday, Knight Capital, Orange County, and the Global Financial Crisis. Just remember, finance is not like betting on the ponies. It’s worse, because the odds aren’t posted.

I have a day job I just think it would be a fun way to learn some applied ML. Anyway, what’s wrong with learning from YT?

I would expect a youtube channel on stock trading to be similar to a youtube channel about cryptocurrency trading: not just wrong, but actively harmful.

Learning about trading on youtube is different from learning about, say, Python on youtube. If a video on programming is incorrect, your program doesn't work. If a video on equity trading is incorrect, the author of the video can take all your money.

Video views, upvotes and subscribers can all be purchased. If you have profitable trading strategy that reaps newbies who implement a bad algorithm that you publish in a public video, then you have created a perpetual motion machine.

Here's a search for "how to win slots" on youtube: https://www.youtube.com/results?search_query=how+to+win+slot... Thousands of results, millions of views each. Every video is either fake or wrong, by definition. These videos make money for the authors, and the casinos, by taking it from the marks dumb enough to watch and believe them.

Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually

#133

Post by SomewhatLikely »

joppy wrote: post #91
ryanmonroe wrote: post #68

As others have said, "Average return is just one statistic". When trading, losses hit harder than wins. Go up 50% then down 50% and you're not even, you're down 25%. The degree of overestimation from this mean return -> "annualized return" calculation depends on what the returns distribution looks like. Here's the calculation used in main.js line 77 applied to a very extreme unrealistic example. I simulated 253 days…

Is it normal to deal with returns over time as log-returns log(R) rather than simple returns (R - 1) for this reason? The average log return does the right thing.

Right, I used to use the geometric mean when dabbling in this area in my teens which is mathematically equivalent to averaging the log returns.

Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually

#134

Post by CawCawCaw »

herpderperator wrote: post #74

This doesn't take into account taxes. If you are consistently profitable on a yearly basis you're expected to pay 100% of last year's capital gains split into Estimated Taxes every quarter going forward. That eats into your return if you're reinvesting profits.

Thankfully we have 0% tax on capital gains.
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