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Neural Net Side Project Makes $3500/mo Trading Stocks
- sebyddd 10y agoHey! The maker here. Would be happy to answer your questions on my little side project.
- alva 10y agoWhat regulatory issues do you face trading with the Indian Stock Exchange when based in the US? Also you mention you had some concern that some of the stocks may crash. Have you worked in finance in the past to be familiar with the securities offered by the NSE, BSE and MCX?
- sebyddd 10y agoNo regulatory issues whatsover. Zerodha, the company behind Kite is SEBI registered, therefore standard regulations apply for NSE and the others. Have not worked directly in finance, but I always had an interest in it. However I accumulated most of my experience in the past year. My recent concerns concerns were based on previously observed patterns and analytical observation.
- raharley0 10y agoDo you think testing for 4 months proves your bot is better than the hundreds of serious players that spend millions on the smartest talent and the best tech tying to eek out an edge? How are you determining true alpha? We're in a bull market. Don't mean to sound harsh but this could be blind luck.
- sebyddd 10y agoAbsolutely not. As I mentioned in the interview, the progress so far is not by any means a reliable metric and there are many factors that affected it. 4 months is not nearly enough to prove that and so far the bot works well on a very specific niche market. While there may be infinite other better approaches, this is yet another working one, which doesn't necessarily yield the best possible result. I understand your point of view and I completely agree with it.
- alva 10y agoHow many trades have you executed?
- danjoc 10y agoCan you speak to how much up front capital is invested to produce $3500/mo? If you put in $1000 initial capital, that is super impressive. If you put in $50K up front, then still nice, but more modest.
- sebyddd 10y agoCan't disclose the exact capital, but the initial investment was less than the monthly profit.
- machbio 10y agonot to criticize you, but this seems to have no logic - "My bot holds a single position from seconds to minutes (sometimes even hours), which makes it more of an automated trader than a high frequency trader" - so your initial investment was less than 25K$,meaning you would be tagged has Pattern Daily Trader with account freeze for 90 days - how does your Algorithm even work with that kind of investment ? Definitely feeling like this is faux.. Edit: Some pointed it is an Indian Marketplace - but the article mentions that Initrinio provided real-time data but Initrinio only provide IEX (https://intrinio.com/marketplace/data/prices/realtime https://intrinio.com/marketplace/data/prices/realtime)
- Miner49er 10y agoOP is trading on Indian markets, so there is no pattern day trading rules. It's not made very clear in the article and I was confused for a bit as well.
- samfisher83 10y agoIf he invested less than the monthly profit he it means he making more than 100%. That is pretty insane.
- brianwawok 10y agoYou can make more than 100% going to the slot machine at the casino. The difference between gambling and trading is not that big. Trading has more ways where you can get an edge over the house, but it is not that different from poker or slot machines.
- billconan 10y agoWhat api is available to get realtime stock data? And what api can be used for trading? Are they expensive?
- sebyddd 10y agoI talked about it in the interview. For this first version I used Kite for trading and mostly Intrinio for financial data. Costs vary from provider to provider, but for testing this, I went with some of the least expensive ones.
- ddlutz 10y agoI'm fairly certain this is in the article: For trading I recommend Kite, mainly for their stable Connect APIs and the low bandwidth. Their limitation is 3 requests per second, and this was more than enough for my new strategy. Getting solid historical financial data isn't cheap, and with so many people hitting the providers to scrape and download data, I don't blame them for limiting the offered information. Intrinio is a good provider for real-time stock quotes at very inexpensive prices. However, getting access to more in-depth data would always yield better results.
- sputknick 10y agoHow much of motivation would you say is profit versus the challenge of the game?
- sebyddd 10y agoGreat question! To be honest, I had this idea in mind for a long time and I thought a lot about it before I actually built it. Therefore there is certainly motivation coming from the challenge of creating this and in some ways I think the profit and challenge factors are somehow correlated.
- raincom 10y agoDoes your bot day trade or swing/pattern trade?
- almoehi 10y agoCan you say something about the software stack you used to build this? Are you using any of the existing libs like zipline or completely from scratch !
- sebyddd 10y agoI do rely on Zipline heavily + other deep learning libraries. I see no point in reinventing the wheel. The stack is mainly Python and C++.
- zump 10y agoAlmost no details about the "neural net". This script kiddie has no idea.
- deleted 10y ago[deleted]
- hmate9 10y agoI do not wish to be negative, I just think it is very hard to really judge this system without knowing the technical details behind it. Since we are currently in a bull market it could just be a fluke. I did not read anything about backtesting. Have you done that? If so, I take it back :)
- sebyddd 10y agoCompletely agree with you. The amount of backtesting has been very limited and the time frame was pretty short, so there are definitely changes this is a fluke. Confirming this is my main goal at the moment and I don't take any credit for creating something revolutionary.
- hmate9 10y agoGood luck! I am rooting for you.
- brianwawok 10y agoBacktesting does not mean much. It's easy to make an algo do well yesterday. Very hard to make it do well tomorrow.
- Miner49er 10y agoTrue, but it would at least test OP's algo in some bearish market conditions. If no backtesting was done then it has only been tested in the current bull market.
- rtstreak 10y agoIndeed, backtesting wouldn't help much in stock prediction. It could work for static input data, but many other factors are involved here.
- hmate9 10y agoI completely disagree. Backtesting matters, especially in HFT. What would you rather have: an algorithm that has performed well on 5 years worth of historical data or one that has performed well in the past 2 weeks.
- canistr 10y agoIsn't it more customary in the financial world to put out your Sharpe Ratio or ROI as a percentage as opposed to your monthly profit? As others have said, the profit doesn't mean anything if your principal amount is high.
- rtstreak 10y agoNonetheless, for a side project this is pretty cool. Probably won't scale to crazy magnitudes, but for a one man project this is remarkable.
- kyleschiller 10y agoPublication bias is a gigantic problem for amateur FinTech. How many hundreds of engineers tried the same thing and won't get an article on the front page of HN because no one wants to read about mediocre performance? I don't want to sound too skeptical, quantitative HFT is absolutely the future, but if enough people try something that's effectively gambling, some of them are bound to succeed, and those people will get dramatically disproportionate exposure. EDIT: I do still like this post and the project, the infrastructure is great and it offers insight into something I'm sure many people are curious about.
- digler999 10y ago> How many hundreds of engineers tried the same thing And you bet your ass if I tried and succeeded I'm not going to come here and brag about it, risking whatever ephemeral edge I had. If I did this, I would do it for dollars, not karma points.
- kyleschiller 10y agoYeah, he references some good resources, but the post doesn't go into any technical detail. I don't think this article hurts him in any meaningful way. It's not like the basic idea of ML for trading is novel.
- ng12 10y agoI have a feeling the author is really much more interested in selling his tech than he lets on in the article. I can't imagine any other reason for going after the press.
- sebyddd 10y agoReally not. If that was my intention, I would went directly to the source. I was invited to share my story with the sole purpose of inspiring others. I have no plans of selling it whatsoever.
- sebyddd 10y agoWhile I do agree with you to some extent, as opposed to gambling, stock market requires technical knowledge. I strongly believe that individual traders stand no chance agains the big players and there may be a combination of luck + favorable stock picks in this case.
- omarforgotpwd 10y agoSure, easy to make $3500 / month when the market is on a crazy bull run. Let's see how it does when the market crashes!
- sebyddd 10y agoI am pretty sure that when that happens, the majority of stock players lose, not only my little side project.
- omarforgotpwd 10y agoExactly.
- dollar 10y agoI wonder how many engineers have replicated the payoff of a dynamically hedged short option without understanding that was what was happening.
- csallen 10y agoYou should explain for those of us who know little about finance but are curious!
- dollar 10y agoThere are volumes written on this subject, though Taleb's "Dynamic Hedging" is as good an introduction as any. The short explanation is that, in theory, the payoff of any vanilla option can be replicated by trading the underlying asset. For a while, quite a long while even, this kind of trading can look profitable. There are many variations on this, such as trade frequency and holding interval, but in the very end you realize you are being compensated for an asymmetric risk. That is the risk of sudden changes of price while you happen to have a position open, among many other risks. I would say that 99% of the "newly discovered" profitable systems I have seen over the last 20 years were unwittingly replicating a short vanilla or exotic option without understanding the risk.
- ucaetano 10y agoSorry, but the little content available on the page, the Amazon ads and the very short run time makes my BS detector sound like an air-raid alarm. Do you have anything beyond "I'm making $3.5k using methods I won't disclose on an initial investment that I won't disclose"? What's your return on your investment? Sharpe Ratio? If you apply your investment criteria in historical data, do you beat the market? How different is it from the guy who invested his tuition money on Tesla?
- perteraul 10y agoIf you had created something that works for you, would you sell out all the details by spreading it on a public blog?
- ucaetano 10y agoNone of the details I asked would give his strategy, would only prove his success. Hedge funds, for example, are largely black boxes, but the publish their returns.
- RomanPushkin 10y agoSounds like a fake story: not too much facts, no neural net details, no links to public profile where all the trading happens. I was trading stocks, it's really easy to fake even videos. You don't even need to fake it - just record everything and publish only successful deals. If this story is true, it should be confirmed. Otherwise, the article can't be considered as serious.
- alva 10y agoReposting my comment on the first HN submission of this page "The claims made in this interview are extremely suspect, it just not make sense. Absolutely no relevant details are included. The developer claims he was able to built an AI trading strategy that is profitable 95% of the time. No technical details about the strategy or platform for trading is provided. A few trading buzzwords thrown in a few places. The rest of the interview is platitudes and inspirational hacker talk I think IndieHackers needs to investigate the claims and be provided proof, otherwise this appears to be a fake project for the developer's own publicity. If IndieHackers are fine with that, I will stop visiting as I cannot trust that the content is not just shallow, exaggerated claims to raise peoples profiles." After expressing my concerns directly to IndieHackers, the interview was changed in multiple places to flesh out a number of the spurious claims which I had criticised. Without further details or some proof from the developer, this piece stinks. Taking into account the rest of the interview which contains stereotypical inspirational hacker talk, the whole thing feels like a badly done promotional bit for SV style status. If I am wrong, I will apologise and the developer is going to be a multimillionaire very, very quickly. Until there is more details, I am going to be totally sceptical of IndieHacker interviews going forward. Which is a shame as I think IndieHackers is a great site. How can I trust that the other submissions are not baseless, PR pieces?
- ucaetano 10y agoDo you have a link to the original version? It looks fake enough as it is, I wonder how much bad it could be. But hey, maybe this guy really cracked the market, and a Nobel prize and billions of USDs are on the way...
- deleted 10y ago[deleted]
- csallen 10y agoThe changes were to add details explaining the 95% "success rate", the sources of data, and the exchange that he was using. I think you guys are both creating a false dichotomy between "genius who cracked the market" and "liar who is fabricating data", when there is plenty of room in between, e.g. "someone who made a few lucky trades in a bull market over a short period of time," which would describe probably the vast majority of "winners" in the stock market. It's the equivalent of asserting that everyone who plays a slot machine must break even, when in reality some people win and some people lose.
- meow_mix 10y ago"Proprietary" technical details? He doesn't even cite the kind of network he's using. This is an ad for him as a freelancer (I doubt the ad revenue hurts him either).
- minimaxir 10y agoVotes on this submission may be manipulated with an attempt to bypass the voting ring detector via linking to /newest: http://i.imgur.com/08pAFOw.jpg http://i.imgur.com/08pAFOw.jpg And another one by Indiehackers founder csallen after it already hit the front page: http://i.imgur.com/rxWtsWJ.jpg http://i.imgur.com/rxWtsWJ.jpg
- csallen 10y agoAs far as I'm aware, it's perfectly fine to link to discussion on HN, but not okay to explicitly ask for upvotes: https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html
- minimaxir 10y agoThen why did you include a picture of the submission in that tweet? Also you ignored the first picture which clearly shows your account.
- csallen 10y agoCorrect, because the first picture is not explicitly asking upvotes either, but asking for comments. And I include pictures (or at least emojis) in as many tweets as I can.
- dang 10y agoWhy link to /newest rather than the actual discussion?
- csallen 10y agoBecause if someone decides to upvote of their own volition then I want it to count, and not be discounted because I linked them to it when they might have found it on their own. If that goes against the spirit of the rules then I can abstain in the future, but at the same time it's a disincentive to ever directly linking a thread.
- 10y ago
- svantana 10y agoI may be way to cynical for my own good, but there's no proof that this is actually real, right? Besides a couple of pretty bizarre screenshots [1]. I'm skeptical because a) these types of gains in public markets are pretty much unheard of, and b) faking a story like this would be a fairly easy way of getting lots of attention for your freelancer business (which this guy advertises right at the top of the article). [1] Running cat on a csv file would usually just print a list of numbers, yes? Instead he gets ascii art with months on the vertical axis, making it seem like time going back and forth, and some random commentary in the right margin. I dunno but something about it screams "mockup". As does the minimalist, ultra-stylish AWS window. Edit: also, if it were me who got incredible returns from trading at high speed on indian markets using only machine learning on historical data, I would definitely keep quiet about it. Just sayin'...
- joemi 10y agoNot arguing at all about being skeptical, but regarding 'cat' it's entirely possible they just had the wrong file extension on that ascii art chart. I've definitely given some plaintext files incorrect extensions if I knew I'd be wanting to open them (or quicklook them) in some program that usually ignores the correct extension. The general vagueness of the post is a much much much stronger reason to be skeptical, imo.
- svantana 10y agoYes that's entirely possible, but my main point was that the chart looks really hand-made (by someone who doesn't really know what they're doing). I don't really see how an ascii data visualization tool would spit out such an abomination...
- morgante 10y agoCan I do an Indie Hackers interview about how I went to Vegas a few times and made $10k? I even have some Python scripts modeling my "strategies!" This is almost certainly a fluke, if it's true at all. There aren't any valuable lessons here and such a story merits a high degree of skepticism. Algorithms which can successfully return 95% profits consistently are not wasted on freelance developers. I usually love Indie Hackers, but including this story really devalues the brand.
- csallen 10y agoI find these criticisms quite unfair, especially given that he admits in the article that (a) he is new to trading, (b) his results cover a short period of time in a bull market and could easily be 100% luck at this point, and (c) he's had to manually step in to avoid ruin. You're excoriating Sebastian for not hedging claims that he has repeatedly hedged. I also disagree that there aren't any valuable or inspiring lessons for indie hackers here. In fact, I enumerated some of them as asides in the interview itself, none of which would apply to your hypothetical trip to Vegas. You and others are hyper-focused on the irrelevant question of whether or not Sebastian's attempt to build an unparalleled money-making machine has succeeded (answer: obviously not), and ignoring the actual point of the interview. It's the equivalent of the guy who read the SubmitHub interview a few months back, ignored all the lessons within, and instead attempted to create an exact clone of the SubmitHub product.
- alva 10y agoYou are strongly defending him. What proof do you have of his claims? If this turns out to be a dodgy submission for self promotion it is mildly embarrassing for IndieHackers if they admit error in this instance. If it turns out you have seen no solid proof for these claims and amidst the heavy skepticism express by multiple people in this thread you do not investigate and demand proof, than that calls into question the rest of IndieHackers
- csallen 10y agoYou are consistently ignoring the logic and reasoning I provide in my responses, and I'm not sure why.
- brilliantcode 10y agoLet me tell you about the time I caught the "finance bug" after watching Wall Street film in 2007. I had a near 99% accurate scalping system. I could not believe it. Every trade I was making was profitable. How could this be? The system worked without a stop loss. Meaning 1% of the time the prices turned, it wiped out all the profits (limited reward) accumulated. I published all of these details on my university homepage which has since been deleted as they won't let alumni's keep one. But I was very careful that while 99% system accuracy is achievable, it's the downside risk that makes the system pretty fucking useless. Of course you can put a stop loss but the system ran on "limited rewards unlimited risk". There's just no holy grail out there. Even if you read Hull's options book, no matter how complex your option strategy gets, you always have to be right at the end of the day. It's pure speculation and we all know how casino's work. So knowing this, if it sounds too good to be true, there's a very strong reason for it. Retail trading is a zero sum game. Even more suspicious when the downsides are conveniently left to "if I gave it away system won't work". I was fully transparent about the downsides when I published my trading system. The last thing I wanted was to people without the financial literacy to naively believe that a holy grail trading system existed. They don't exist. History is filled with funds that blew up because they believed alpha generation would be a constant thing. Even quant trades I question their success. In the long run, all trades are speculative and carry risks (except arbitrages which are automated to oblivion). No matter how sophisticated you get the risks are always unknown.
- vorotato 10y agoIf it has overfitting problems it'll lose money even faster!