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I've always been confused why so much of algorithmic trading centers on technical indicators. What about fundamentals? Wouldn't it be easier to cobble togethe
by tunesmith 11y ago
I've always been confused why so much of algorithmic trading centers on technical indicators. What about fundamentals? Wouldn't it be easier to cobble together a system that checks for healthy companies that are low in their PEG ratio historical range, and then buy-and-hold? There are super-boring companies with reliable earnings history out there, with stock prices that go up and down throughout the year. So you'd be trading a few times a month, not many times a day (or minute).
Then there are the simple algorithms like 'Just buy index funds', although I haven't found a good resource on how to sector-balance various index funds. Simplest I guess would be 'Just buy VFINX' but that can be volatile and scary sometimes.
- karmapolice 11y agoHow easy is for a bot to read fundamentals? I do not know if there is some place to gather this kind of data. I mean, in "The intelligent investor" the author points out that lots of companies bury important information in side notes in their annual reports, that can totally change their attractiveness. I wonder how easy is to check these things nowadays.
- tunesmith 11y agoThat data set is harder to come by, which really sucks... morningstar has something like that - historical fundamentals - and they charge a ton. But I think Quantopian gives access to it? Not sure if others do. And there might be ways for other services to bundle it somehow across many subscribers.
- lingben 11y agoThere are firms doing it but you need a lot more data inputs and they have to be sanitized (extremely high quality data): http://www.bloomberg.com/news/articles/2015-08-11/acadian-quant-shop-tops-indexes-with-factor-based-investing- http://www.bloomberg.com/news/articles/2015-08-11/acadian-qu...