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> The investment of as much as $250 million will go to a hedge fund launched by Boston investment firm Quantopian. That fund provides money to do-it-yourself tr

> The investment of as much as $250 million will go to a hedge fund launched by Boston investment firm Quantopian. That fund provides money to do-it-yourself traders who come up with the best computerized investing methods, giving a share of any profits to the creators. This seems like a pretty good idea. A billionaire who runs his own money and just spent a pile to build out his own quantitative team invests a "small amount" to see if there is something to the wisdom of the crowds there. The only point to note is that quantopian has 85,000 people trying 400,000 algos, something about monkeys and Shakespeare seems applicable. If my experience is any indications the funnel of ideas to profitable strategies gets very narrow very quickly. Something like for every 100 ideas, 40 get tested, 10 look profitable 5 make it into production and 2 actually work out. And then you have to factor in that the average life span for each algo can be measured in months. Actually that sounds some what depressing:( If you are an algo trader, then you are always running. Congratulations to the Quantopian team!! This is a big milestone and something you should be proud of!

throwaway1134 10y ago
> Actually that sounds some what depressing:( If you are an algo trader, then you are always running. This is so true and what eventually made me exit this line of work. In most other forms of human endeavor, time works in your favor. If you're a dentist or plumber for example, as time passes, you gain more experience, build a customer base, can charge more for your accumulated skills, etc. Not so in algorithmic trading. The things that work well today slowly stop working, and you have no recourse. Always on the treadmill. I eventually decided that I didn't want the sustained worry of "what new thing must I invent today so that I can pay rent next year?"
- runako 10y ago
  >> The things that work well today slowly stop working Isn't that more or less a property of the technology industry as well? You have to continually reinvent yourself to remain employable, etc. Perhaps it's more acute in trading, but then again so (often) are the spoils larger.
- vegabook 10y ago
  I buy like 5 books a month just to try to keep up. I've got math-overload not to mention latency-depression and algo-stress. I have cuda-mares at night. Trying to keep up is so personally costly that I sometimes wonder if I shouldn't just become a carpenter. Or a gardener. Bring on the Universal Basic Income! Free me from this accelerating treadmill to oblivion!
  - fapjacks 10y ago
    So it's one job you wouldn't mind the robots come for?
spitfire 10y ago
Monkeys on typewriters is right. Quantopian always had some major red flags with it. I always figured they were just a play to develop algorithms for someone else. They only focus on the trading algorithms with no support whatsoever for portfolio allocation, risk management, money management, etc. This appeals to random-joe gamblers, and is the ideal approach if you're a hedge fund looking to copy ideas. People develop algorithms for you, but are blind to all the missing pieces (risk, money mgmt, etc).
- mikkom 10y ago
  > They only focus on the trading algorithms with no support whatsoever for portfolio allocation, risk management, money management, etc. Sorry what? The algos are coded with python. How can you not include proper risk management, portfolio allocation etc with python?
  - spitfire 10y ago
    Because algorithms and risk/portfolio management are totally different spheres. You don't want to complect your trading algorithm with your risk management, portfolio allocation or order/execution management systems. And that is my point. Quantopian is aimed at inexperienced individuals who have never heard of Black-Litterman and won't notice what they're missing.
    - mikkom 10y ago
      > You don't want to complect Some people want full control of the pipeline. I'm one of them so this doesn't bother me personally. However I kind of agree with you as it's PITA sometimes that quantopian does not allow importing external or personal libraries so everything that is not included at the libraries they allow to import must be copy/pasted to each algorithm. I hope/think this will improve at some point though.. ps. https://www.quantopian.com/posts/black-litterman https://www.quantopian.com/posts/black-litterman
      - spitfire 10y ago

throwaway1134 10y ago

> Actually that sounds some what depressing:( If you are an algo trader, then you are always running. This is so true and what eventually made me exit this line of work. In most other forms of human endeavor, time works in your favor. If you're a dentist or plumber for example, as time passes, you gain more experience, build a customer base, can charge more for your accumulated skills, etc. Not so in algorithmic trading. The things that work well today slowly stop working, and you have no recourse. Always on the treadmill. I eventually decided that I didn't want the sustained worry of "what new thing must I invent today so that I can pay rent next year?"

runako 10y ago
>> The things that work well today slowly stop working Isn't that more or less a property of the technology industry as well? You have to continually reinvent yourself to remain employable, etc. Perhaps it's more acute in trading, but then again so (often) are the spoils larger.
vegabook 10y ago
I buy like 5 books a month just to try to keep up. I've got math-overload not to mention latency-depression and algo-stress. I have cuda-mares at night. Trying to keep up is so personally costly that I sometimes wonder if I shouldn't just become a carpenter. Or a gardener. Bring on the Universal Basic Income! Free me from this accelerating treadmill to oblivion!
- fapjacks 10y ago
  So it's one job you wouldn't mind the robots come for?

spitfire 10y ago

Monkeys on typewriters is right. Quantopian always had some major red flags with it. I always figured they were just a play to develop algorithms for someone else. They only focus on the trading algorithms with no support whatsoever for portfolio allocation, risk management, money management, etc. This appeals to random-joe gamblers, and is the ideal approach if you're a hedge fund looking to copy ideas. People develop algorithms for you, but are blind to all the missing pieces (risk, money mgmt, etc).

mikkom 10y ago
> They only focus on the trading algorithms with no support whatsoever for portfolio allocation, risk management, money management, etc. Sorry what? The algos are coded with python. How can you not include proper risk management, portfolio allocation etc with python?
- spitfire 10y ago
  Because algorithms and risk/portfolio management are totally different spheres. You don't want to complect your trading algorithm with your risk management, portfolio allocation or order/execution management systems. And that is my point. Quantopian is aimed at inexperienced individuals who have never heard of Black-Litterman and won't notice what they're missing.
  - mikkom 10y ago
    > You don't want to complect Some people want full control of the pipeline. I'm one of them so this doesn't bother me personally. However I kind of agree with you as it's PITA sometimes that quantopian does not allow importing external or personal libraries so everything that is not included at the libraries they allow to import must be copy/pasted to each algorithm. I hope/think this will improve at some point though.. ps. https://www.quantopian.com/posts/black-litterman https://www.quantopian.com/posts/black-litterman
    - spitfire 10y ago