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Show HN: Watch 3 AIs compete in real-time stock trading

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Re: Show HN: Watch 3 AIs compete in real-time stock trading

#101

Post by Galanwe »

chronic026935 wrote: post #76
yapyap wrote: post #39

Earlier quoted context omitted.

> Or a monkey. or just a stocktrader haha

> or just a stocktrader haha Many quant trading firms make 50%-100% annual returns, each year, over the past 15-20 years. The secret is leverage. And they do not accept outside investor money. Many hedge funds outperform the market. However, the returns after fees, to the passive outside investor underperform S&P500. But yes, publicly traded active ETFs generally underperform. But counter example is VGT or QQQ, both…

> Many quant trading firms make 50%-100% annual returns. The secret is leverage

Hu lol no XD you're way over stating it. While it happens _sometimes_, 50% or 100% is insanely rare, even for the top tier hedge funds.

Most HF work at predefined annual volatility, often in the 7% to 10% range. A typical _top tier_ sharpe is in the >=2 range, we're more talking about a 10%/25% averaged annual returns.

> However, the returns after fees, to the passive outside investor underperform S&P500.

That doesn't even make sense with the figures you posted. Most HF operate under the 2:20 or 3:30 range, sometimes 0:40 for the top 5. If you take a pessimist 10% returns on 10% annual vol, against the S&P 10% averaged returns at 20% vol, you're still double the risk adjusted returns, gross. Factor in 20 to 40% performance fees and you're way above the S&P.

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#102

Post by mhh__ »

chronic026935 wrote: post #76
yapyap wrote: post #39

Earlier quoted context omitted.

> Or a monkey. or just a stocktrader haha

> or just a stocktrader haha Many quant trading firms make 50%-100% annual returns, each year, over the past 15-20 years. The secret is leverage. And they do not accept outside investor money. Many hedge funds outperform the market. However, the returns after fees, to the passive outside investor underperform S&P500. But yes, publicly traded active ETFs generally underperform. But counter example is VGT or QQQ, both…

They also often don't compound so you might actually make significantly less

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#103

Post by mhh__ »

Galanwe wrote: post #101
chronic026935 wrote: post #76

Earlier quoted context omitted.

> or just a stocktrader haha Many quant trading firms make 50%-100% annual returns, each year, over the past 15-20 years. The secret is leverage. And they do not accept outside investor money. Many hedge funds outperform the market. However, the returns after fees, to the passive outside investor underperform S&P500. But yes, publicly traded active ETFs generally underperform. But counter example is VGT or QQQ, both…

> Many quant trading firms make 50%-100% annual returns. The secret is leverage Hu lol no XD you're way over stating it. While it happens _sometimes_, 50% or 100% is insanely rare, even for the top tier hedge funds. Most HF work at predefined annual volatility, often in the 7% to 10% range. A typical _top tier_ sharpe is in the >=2 range, we're more talking about a 10%/25% averaged annual returns. > However, the retu…

I think this almost always refer to Renaissance, except that they aren't really a hedge fund the same way (say) millennium are

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#105

Post by rufus_foreman »

chronic026935 wrote: post #76
yapyap wrote: post #39

Earlier quoted context omitted.

> Or a monkey. or just a stocktrader haha

> or just a stocktrader haha Many quant trading firms make 50%-100% annual returns, each year, over the past 15-20 years. The secret is leverage. And they do not accept outside investor money. Many hedge funds outperform the market. However, the returns after fees, to the passive outside investor underperform S&P500. But yes, publicly traded active ETFs generally underperform. But counter example is VGT or QQQ, both…

>> Many quant trading firms make 50%-100% annual returns, each year, over the past 15-20 years

100% annual returns on 1 million dollars for 20 years is 1 trillion dollars. No one is making that type of return.

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#106

Post by Galanwe »

Scoundreller wrote: post #92
chronic026935 wrote: post #76

Earlier quoted context omitted.

> or just a stocktrader haha Many quant trading firms make 50%-100% annual returns, each year, over the past 15-20 years. The secret is leverage. And they do not accept outside investor money. Many hedge funds outperform the market. However, the returns after fees, to the passive outside investor underperform S&P500. But yes, publicly traded active ETFs generally underperform. But counter example is VGT or QQQ, both…

Wouldn’t it be fairer to compare against a leveraged ETF? TQQQ (3x daily return leveraged nasdaq 100) is up 180x since its well-timed inception in 2010. Though that’s a bit over 40% annually.

> Wouldn’t it be fairer to compare against a leveraged ETF?

No, it's actually the reverse. You have to compare at equal annual vol, and the S&P already has something like 20%. Most HF operate around 10% on AUM.

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#107

Post by mh- »

echoangle wrote: post #46
rixed wrote: post #18

> The goal is to study how different LLMs interpret financial data and make decisions with real consequences. I don't really buy this. If the goal was to study how different LLMs interpret financial data there would be no use for actual trades, since their interpretation cannot be influenced by the fact that the trading orders are passed for real. I believe the goal is to see if AI can do better than rats [0]. There…

> If the goal was to study how different LLMs interpret financial data there would be no use for actual trades, since their interpretation cannot be influenced by the fact that the trading orders are passed for real. Technically every trade influences the stock, but I agree that it won't have any effect at all. > I believe the goal is to see if AI can do better than rats [0]. There is no shame in that. But even then…

> you could still just calculate the profit as if trades would have happened

Depending on the type of trades, the volume of the equities, etc.. it can be very difficult to simulate the ability to open/close positions with sufficient accuracy to evaluate the strategies.

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#108

Post by attentionmech »

pavlov wrote: post #98
pakitan wrote: post #87

ChatGPT has one trade that is guaranteed to be bad. I'm not saying unprofitable, just bad. GBTC is the bitcoin ETF with biggest expense ratio - 1.5%. If you want to bet on bitcoin, a better choice would be BITB (0.20%) or BTC (0.15%). Also, the reasoning is partially a hallucination - "The holding period of 9 months aligns with the expected completion of Grayscale's pivotal Phase 3 Bitcoin ETF trial, a major catalyst…

ChatGPT does a good job of imitating the average crypto influencer. They don’t know what they’re saying either, and 99% of crypto investors would be thrilled by the prospect of a “pivotal Phase 3 Bitcoin ETF trial” that will “drive trust value realization”. Sounds great, can’t miss out on that! The hallucinations are simply a mirror of a community that thrives on this nonsense. When nothing is real, you can’t blame t…

This made me chuckle. You made a very interesting point that if LLMs are copying hallucinations those hallucinations are not infact hallucinations.

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#109

Post by WalterBright »

Retr0id wrote: post #56
rixed wrote: post #18

> The goal is to study how different LLMs interpret financial data and make decisions with real consequences. I don't really buy this. If the goal was to study how different LLMs interpret financial data there would be no use for actual trades, since their interpretation cannot be influenced by the fact that the trading orders are passed for real. I believe the goal is to see if AI can do better than rats [0]. There…

Real trades have transaction fees, latency, slippage, etc. - you can simulate all this, but it's hard to know if it's being simulated correctly or not. > their interpretation cannot be influenced by the fact that the trading orders are passed for real It's not going to make much difference with $5 trades, but the impact on the market is non-zero.

> fees, latency, slippage

Whenever I trade, I somehow always get an adverse price. I figure it's the "no fee" brokerage chiseling a bit off for themselves. I compensate by being a buy and hold hold hold investor, so paying very little in aggregate for that.

What I don't understand is how day traders avoid being eaten alive by this.

Re: Show HN: Watch 3 AIs compete in real-time stock trading

#110

Post by WalterBright »

pavlov wrote: post #98
pakitan wrote: post #87

ChatGPT has one trade that is guaranteed to be bad. I'm not saying unprofitable, just bad. GBTC is the bitcoin ETF with biggest expense ratio - 1.5%. If you want to bet on bitcoin, a better choice would be BITB (0.20%) or BTC (0.15%). Also, the reasoning is partially a hallucination - "The holding period of 9 months aligns with the expected completion of Grayscale's pivotal Phase 3 Bitcoin ETF trial, a major catalyst…

ChatGPT does a good job of imitating the average crypto influencer. They don’t know what they’re saying either, and 99% of crypto investors would be thrilled by the prospect of a “pivotal Phase 3 Bitcoin ETF trial” that will “drive trust value realization”. Sounds great, can’t miss out on that! The hallucinations are simply a mirror of a community that thrives on this nonsense. When nothing is real, you can’t blame t…

When I'd watch the financial news on TV, they would always bring on the "technical analyst", show a graph of the stock price, and then hand-draw some lines on it, and then spew out various technical terms for it guaranteed to impress.

Me, I always regarded technical analysis as drawing pictures in clouds.

If any of those analysts were worth spit, they'd be working for a hedge fund, not the network.

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