61–70 of 320 posts
I traded stocks and Forex for years and my experience says, it is not for everyone. What ever indicators,discipline or model you follow it is going to work only if you have the right intuition or luck!
Is this a result of bots on the other side adapting in some way to what you were doing? I would have thought you would be too small a player for them to notice.
Have you ever thought of making a trading system that would buy tons of stock when a flash crash happens? It is going to happen again. If your system is ready and you buy before they shut the market down or roll back orders you could make a hefty profit.
If the market dives and you quickly get into a big long position, and then it dives some more - what do you do? You can either close out your losing trade and take the loss, or hope that the market comes back up, all the while holding on to the risk of further losses.
Also, there's no guarantee that trades in the middle of a flash crash will remain valid after the crash. The exchange could nullify all trades in a certain period of time, which would completely wipe out your upside potential.
Would you be able to open source any of the code behind your trading system? Maybe not the "secret sauce", but it would be interesting to see how you processed the data feeds, modeled the data, entered orders, etc.
I certainly could open source it. I may just wait a bit on the off chance that somebody wants to purchase it.
2. Line
3. ...
Profit!
This article is missing a crucial piece of data: what was the initial investment.. earning 500k with 10k initial investment is genious, with 10M initial investment it's just another year on the stock market.
This is a different style of trading than what investors do. He said that he was never more than a few contracts in. A single contract needs $10K day trading margin usually (depends on time frame and specific contract, but it's a reasonable estimate). Therefore, if he was never more than 10 contracts long or short at the same time, the risk was of $100K. Making $500K on $100K over 6 months is good business.
This is just glorified gambling. I am not sure what special insight or advantage he had, other than his own model. Every trader has a model. It could have easily been called "how i lost 500k with machine learning". Like gambling, it's easy to manipulate statistics to show that you did well in some period of time. I worked for a large investment bank about 10 years ago, writing trading programs for quant traders who w…
I don't get that. It would be true if he just made a few trades, but the author claimed to be making 2000 trades a day. Over a period of months winning that wouldn't qualify as blind luck.
Why not?
Take a look at the VIX from 2009 until today and you'll understand why you stopped making money.
very interesting, a spike in sept-dec 2009 that roughly follows his PNL...
I'm sceptical that HFT is good for the public. What did you do to ensure your system wouldn't make a flash crash worse?
Earlier quoted context omitted.
This. I love crazy projects and Show HN's until the cows come home, but this one is dangerous that I must repeat the warning to others. I cannot emphasize how important it is to understand that people who trade using price action ( http://en.wikipedia.org/wiki/Price_action_trading ) are just speculating based on where they expect the price to move. It's no different than people who play Texas Hold'em online and specu…
The Instagram guys found an edge. It won them 730m. Fantastic. More than any edge ever won by me. But the market has changed so much since then, please be careful before you follow this course. You are not wrong, but what you wrote here is applicable to any success story posted on HN. Caveat lector. Always.
What pains me is just this year I've heard in 3 separate occasions for 3 separate startup businesses {industries: ['transportation', 'social', and 'mobile ads']} people propose "Let's do the Instagram strategy." It may be obvious to you and me how absurd that sounds, but there are a non-trivial number of people who blindly follow headlines.
Edit: I agree with @toomuchtodo. It's just too easy to risk with HFT that the warning is needed here more than elsewhere.
This is just glorified gambling. I am not sure what special insight or advantage he had, other than his own model. Every trader has a model. It could have easily been called "how i lost 500k with machine learning". Like gambling, it's easy to manipulate statistics to show that you did well in some period of time. I worked for a large investment bank about 10 years ago, writing trading programs for quant traders who w…
This. I love crazy projects and Show HN's until the cows come home, but this one is dangerous that I must repeat the warning to others. I cannot emphasize how important it is to understand that people who trade using price action ( http://en.wikipedia.org/wiki/Price_action_trading ) are just speculating based on where they expect the price to move. It's no different than people who play Texas Hold'em online and specu…
To start with, there's simple probability: knowing the odds of making you hand vs. the payoff in the pot, or the chance of winning with various starting hands. This is pretty basic but a lot of low-stakes players screw it up. If you get it right, their mistakes are your gain.
At a more advanced level, game theory comes into play, using bluffs and so on. The game is complex enough that it's not completely solved, and it's an active area of research. The University of Alberta is doing a lot of working developing poker bots using game theory. By playing a good strategy, you can prevent other players from exploiting your patterns.
Only after you've got a good grasp on all that should you really think much about exploiting a particular player's weaknesses. The Alberta guys are doing work on that part too. Exploitative play can improve your profit but also makes you more vulnerable.
For a good overview of this stuff, the book Mathematics of Poker by Ankenman and Chen is a good place to start.
I agree though that HFT is awfully competitive these days. If I had to choose between the two I'd play poker.