Last year I had a bunch of cash right as Covid hit so I bought into a few indexes as well as some Energy and Tech stocks. My annual return on these assets was 48%. I don't expect anywhere near that next year though. I just so happened to have bought at the bottom of the market. I probably could have done a return on the order of 100% or more had I researched a bit deeper. I took a gamble on healthcare stocks that just didn't pan out. All that was was just that- speculation and gambling.
Show HN: I discovered a trading algorithm that returns ~24.85% annually
101–110 of 134 posts
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#102Earlier quoted context omitted.
No offence, but how can you have spent any time trading without knowing about mean reversion? It's the most basic and well known phenomenon in trading, along with momentum.
Not everyone learns by studying prior art. Some people's brains are wired to need to get their hands dirty before an abstract concept or solution makes sense. I'm sure that in the ~60 seconds I wrote this post, some brilliant future software engineer just reinvented binary search.
Understanding and knowing about mean reversion is essential to anyone writing an algorithm used in real world finance, along with a bunch of other terms.
It is also clear from other posts by the author that this has not been tested in the real world, only back tested.
Practitioners largely consider back testing to be somewhat irrelevant as it’s hard to achieve real world results that compare favorably to the back test. It is essentially over fitting the curve.
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#103“In theory, there is no difference between theory and practice. In practice, there is. “
–Richard P. Feynman
Wise words for anyone wishing to try out an algorithm on Wall Street.
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#104There are so many misconceptions on this thread about what makes a good quant trading strategy. First of all, if you're shorting US equities and making 25% annually, that would be awesome. Heck, even being flat would be great because a strategy that is long SP500 could also short your equities and be delta-neutral and likely have a much lower volatility for the same return. Second, so many people are mentioning commi…
You seem to know your stuff about this. Do you know any good starting points to learn about algorithmic trading? Any youtube channel or book?
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.
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#105Earlier quoted context omitted.
You seem to know your stuff about this. Do you know any good starting points to learn about algorithmic trading? Any youtube channel or book?
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.
Spoken like someone who has never done algorithmic betting or trading.
It's true there are risks associated with trading. But keep track of the money you have at risk and there is no reason not to have a go.
I know more than enough people who have made consistent returns doing algorithmic trading in under-serviced market segments.
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#106Earlier 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.
Spoken like someone who has never done algorithmic betting or trading. It's true there are risks associated with trading. But keep track of the money you have at risk and there is no reason not to have a go. I know more than enough people who have made consistent returns doing algorithmic trading in under-serviced market segments.
Actually, I speak as someone who has lost a fair bit of money on algorithmic trading. The pattern I’ve observed is consistent, small gains punctuated by sizable losses. That was in a big market, but if the market segment is small enough, then I would certainly grant that your acquaintances could have had that success. Does put a cap on the gains.
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#107Unrelated, but it's surprisingly hard to get backtesting right.
I found a bug[1] in a popular (4000 star) stock forecasting model on github where future knowledge subtly leaks into the training data. People seem to keep using the project though!
[1] https://github.com/huseinzol05/Stock-Prediction-Models/issue...
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#108Now Backtest it from 2015 onwards. 4% yearly return. All your returns come from the first 2-3 years.
Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#109Re: Show HN: I discovered a trading algorithm that returns ~24.85% annually
#110Many moons ago I ran a site called ETF Timing that automated technical analysis against ETFs. There is so much wrong with this I don't know where to start. But this seems common these days, I think it's due to the influx of inexperienced traders who have no proper statistical background. I'll let ryanmonroe point out the first glaring problem with these types of simple "algorithms": https://news.ycombinator.com/item?…
Hi, do you have any recommended resources to have good foundationss on these?