Python For Finance: Algorithmic Trading • Hacker News Board

Re: Python For Finance: Algorithmic Trading

#161

Post by jjeaff » Mon, Jun 05, 2017, 8:16 AM UTC

gnaritas wrote: post #155

dsacco wrote: post #49

Earlier quoted context omitted.

I agree with most of what you're saying in principle, but it is very possible to identify alpha or acquire an edge that institutional market participants don't have. If you have access to data that most of the market does not, you can effectively trade on it. You can also effectively trade on a novel insight on a combination of data sources. There is a lot of information asymmetry, and an individual is capable of cap…

> If you have access to data that most of the market does not, you can effectively trade on it. Yes, but you aren't going to have any such data. If the information is available to you, it's available to other participants of the market as well and you're not the only one trading on it.

There is still a lot of opportunity out there. The thing is, as smart and loaded with resources the quants on wall street are, they have to work on opportunities that can provide returns with very large amounts of capital. Smaller opportunities that could bring in a few tens of thousands a month would not even make it on their radar. They need opportunities that can provide a return on hundreds of millions in capital.

Re: Python For Finance: Algorithmic Trading

#162

Post by gnaritas » Mon, Jun 05, 2017, 3:52 PM UTC

dsacco wrote: post #158

gnaritas wrote: post #157

Earlier quoted context omitted.

If you can source it, so can others, what makes you think only you have thought about trading on that data which must necessarily be public for you to have it legally?

> If you can source it, so can others Yes, agreed: the longer the data is available, the more likely it is that others catch and start using it. That's a constant battle of course - continually coming up with new sources of data and new ways of getting it before most of the market. > what makes you think only you have thought about trading on that data which must necessarily be public for you to have it legally? I do…

No no, good explanation.

Re: Python For Finance: Algorithmic Trading

#163

Post by wtvanhest » Mon, Jun 05, 2017, 7:19 PM UTC

lz400 wrote: post #120

wtvanhest wrote: post #104

Earlier quoted context omitted.

If you are just gambling with math at home, dont bother. If you want to understand finance like the op, better start learning. They have phds and cfas...

If you want to understand finance 360, from compliance to settlements, from middle office to government bonds structuring, sure, get a CFA. But somebody learning to trade not only doesn't need one, but very little of what's in it is useful. I've been in finance for ~10 years, trust me, very few traders and quants have CFAs, that's more product management, research analysts, compliance, controllers, risk managers, eve…

The CFA doesn't cover settlements at all, nor does it have anything to do with gov bond structuring, and very, very little on compliance. (Basically the bare minimum you need to know on ethics and asset manager code of conduct/GIPS).

The vast majority of the CFA curriculum covers investing fundamentals, including accounting (100% necessary for building models), quant (obviously necessary), econ (pretty important).

Re: Python For Finance: Algorithmic Trading

#164

Post by nickthemagicman » Tue, Jun 06, 2017, 2:50 PM UTC

PaulRobinson wrote: post #39

nickthemagicman wrote: post #25

How is algorithmic trading not equivalent to astrology? Nothing can be predicted because there's way too many confounding factors.

Algo trading typically utilises technical analysis which is basically patterns proven to repeat in markets for a variety of fundamental reasons, or fundamental analysis (e.g. algorithmically valuing and pricing options based on underlying fundamental data, sentiment analysis, etc.), and buying/shorting as appropriate. It is based on scientific methods: empirical evidence being used to validate hypothesis that produce…

If this was the case...if there was way to make money off of scientifically proven, reliably reproducible 'stock market patterns' everyone would be a billionaire.