financial advice of smart refrigerator right before the dump?
We gave 5 LLMs $100K to trade stocks for 8 months
301–310 of 319 posts
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#302Earlier quoted context omitted.
XKCD calls it the "Lucky 10,000" [0] [0]: https://xkcd.com/1053/
That is referring to something completely else. This is referring to some common fact that the person didn't figure out by themself. OP is referring to something they came up with themselves in a field they have no experience with, realizing it is actually a thing in a way feeling validated and clever.
XKCD calls it "Engineering Syllogism" [0]
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#303Ok now do risk adjusted returns
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#304Earlier quoted context omitted.
>but for various reasons can end up flopping when actually executed in the real market. 1. Your order can legally be “front run” by the lead or designated market maker who receives priority trade matching, bypassing the normal FIFO queue. Not all exchanges do this. 2. Market impact. Other participants will cancel their order, or increase their order size, based on your new order. And yes, the algos do care about your…
>Your order can legally be “front run” by the lead or designated market maker who receives priority trade matching, bypassing the normal FIFO queue. Not all exchanges do this. Unless you're thinking of some obscure exchange in a tiny market, this is just untrue in the U.S., Europe, Canada, and APAC. There are no exchanges where market makers get any kind of priority to bypass the FIFO queue.
Anyone can be a market maker on a trade just take the other side of an offer. All they really do is make a market with you and then make a market with the other side and pocket the change. It's good for market liquidity.
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#305Earlier quoted context omitted.
With actual money? Or still fake money?
Fake money is better than nothing, but one hopes that at the very least they’re correctly managing prices with the bid-ask spread, although real money would tend to influence what the actual numbers would be (small dollar amounts likely getting worse pricing, large dollar amounts potentially impacting the movement of the market).
If they are not actually trading, they are almost certainly getting a lot wrong and I would not trust this one bit.
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#306Earlier quoted context omitted.
Yeah I mean if you generally believe the tech sector is going to do well because it has been doing well you will beat the overall market. The problem is that you don’t know if and when there might be a correction. But since there is this one segment of the overall market that has this steady upwards trend and it hasn’t had a large crash, then yeah any pattern seeking system will identify “hey this line keeps going up…
You believe in the tech sector because technology always goes well and it's what humans strive to achieve, not because it has done well recently. It has always.
Long term, yes. Short to medium term, we can get things like the 2001 crash.
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#307OP here. We realized there are a ton of limitations with backtest and paper money but still wanted to do this experiment and share the results. By no means is this statistically significant on whether or not these models can beat the market in the long term. But wanted to give everyone a way to see how these models think about and interact with the financial markets.
These are LLMs - next token guessers. They don't think at all and I suggest that you don't try to get rich quick with one! LLMs are handy tools but no more. Even Qwen3-30B heavily quantised will do a passable effort of translating some Latin to English. It can whip up small games in a single prompt and much more and with care can deliver seriously decent results but so can my drill driver! That model only needs a £50…
Transformers are general-purpose learning machines. Guessing the next token is what we initially train them to do, but then we add other training on things like giving answers that humans like, or doing math that's judged correct by automated systems. These days they're getting quite good at advanced mathematics.
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#308Earlier quoted context omitted.
Yeah I mean if you generally believe the tech sector is going to do well because it has been doing well you will beat the overall market. The problem is that you don’t know if and when there might be a correction. But since there is this one segment of the overall market that has this steady upwards trend and it hasn’t had a large crash, then yeah any pattern seeking system will identify “hey this line keeps going up…
> a hedge fund can beat the market for 2-4 years but at 10 years and up their chances of beating the market go to very close In that case the winning strategy would be to switch hedge funds every 3 years.
> In that case the winning strategy would be to switch hedge funds every 3 years.
When you flip a coin, you can easily get all heads for the first 2-4 flips, but over time it will average out to about 50% heads. It doesn’t follow from this that the winning strategy is to change the coin every 3 flips.
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#309When you've traded for many, many years, you realize just how little 8 months can mean. Especially during one of the most nonsensical bubble markets of all time.
Re: We gave 5 LLMs $100K to trade stocks for 8 months
#310Earlier quoted context omitted.
Yeah I mean if you generally believe the tech sector is going to do well because it has been doing well you will beat the overall market. The problem is that you don’t know if and when there might be a correction. But since there is this one segment of the overall market that has this steady upwards trend and it hasn’t had a large crash, then yeah any pattern seeking system will identify “hey this line keeps going up…
As an old friend investor I know always says: 'It is really easy to make money in the market when everyone is doing it, just try to not lose it when they lose it'.
Everyone's a genius in a bull market is the phrase.