Algorithmic Trading: The Play-at-Home Version
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Re: Algorithmic Trading: The Play-at-Home Version
#2I once used a Bitcoin trading bot with some luck- called 'Butter-Bot'. It had the ability to amplify gains vs. holding during the times of the upward market. Did quite well- it paid for itself in a month IIRC. Then the market started going sideways & its limitations began to show. It doesn't work at all anymore. I think the devs went out of business after pouring all their resources into a newer version which had better strategies for the evolving market. It's too bad, I was a big fan.
Re: Algorithmic Trading: The Play-at-Home Version
#3Whenever people tell me they're going to go into day trading, I usually say, "How many people do you know who've become wealthy day trading?" They say, "Zero." I also know zero people who got rich doing at-home algorithmic trading. But hey, there are probably some! That's the nature of randomness.
Re: Algorithmic Trading: The Play-at-Home Version
#4Whenever people tell me they're going to go into day trading, I usually say, "How many people do you know who've become wealthy day trading?" They say, "Zero." I also know zero people who got rich doing at-home algorithmic trading. But hey, there are probably some! That's the nature of randomness.
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Re: Algorithmic Trading: The Play-at-Home Version
#5So... anyone want to share some of these algorithms for predicting stock prices?
Re: Algorithmic Trading: The Play-at-Home Version
#6The latest craze? I guess WSJ has been out to lunch for the past decade.
Re: Algorithmic Trading: The Play-at-Home Version
#7So... anyone want to share some of these algorithms for predicting stock prices?
Search "trading algorithms" on Amazon. They're not secret.
Re: Algorithmic Trading: The Play-at-Home Version
#8Probably have better luck writing your own poker-bot.
Re: Algorithmic Trading: The Play-at-Home Version
#9Here's the problem with trying to create your own trading system.
How do you back test it to know that it works. If you back test over the past 5 years then you are only testing your model against a huge bull market.
If you back test over the past 20 years then I'm not sure it helps much as the market of 20 years ago didn't really have any of the major market drives of today's markets, HFT's, huge numbers of hedge funds and the money they bring, and huge passive investing via ETF's, all those factors were there 20 years ago, but they weren't the major market drivers that they are now.
So for back testing you are damned if you do and damned if you don't:(
I think I've said this before but in my experience, a decent trading system is 70%+ market insight. And there are only really 3 ways to get this insight, hard earned experience, applying new streams of data to the markets and applying math to existing streams of data to unlock new insights.
All 3 are being done every day by scores of MIT Phd's.
So if you are writing your own trading models you should start by answering the question of what's your alpha when compared to everyone else....
Re: Algorithmic Trading: The Play-at-Home Version
#10Here's the problem with trying to create your own trading system. How do you back test it to know that it works. If you back test over the past 5 years then you are only testing your model against a huge bull market. If you back test over the past 20 years then I'm not sure it helps much as the market of 20 years ago didn't really have any of the major market drives of today's markets, HFT's, huge numbers of hedge fu…
> How do you back test it to know that it works.
You don't. You turn it on and see if it works. Which does have a certain degree of intellectual rigor to it.
> So if you are writing your own trading models you should start by answering the question of what's your alpha when compared to everyone else....
Well right, that's the core question isn't it. But clearly the allure of wanting to test ones own set of biases and insights for alpha is fairly understandable and appealing.