4 ms·
This is a pretty common response so I think its worth pointing out that there are a lot of reasons why you might have a model you think might be able to predict
by philipodonnell 8y ago
This is a pretty common response so I think its worth pointing out that there are a lot of reasons why you might have a model you think might be able to predict the stock market but are not actively using it to make money.
* You may not be eligible to trade that instrument because of where you live or who you are
* You may have found an edge based on historical data in one instrument and expect it could work for another but lack the data necessary to confirm
* You may not have the capital necessary to trade at sufficient scale
* You may not have the programming skills to turn a mathematical model into an build and maintain a high-frequency trading bot with adequate risk controls (waaaaaaaaaay different skillset)
* You may have found a prediction who's error rate is within the transaction costs and thus needs to be traded at higher volume (lower tx costs) to confirm
And before anyone thinks "why not just negotiate to sell it to someone who does" they get hundreds of random people doing that every day so your chances of getting noticed are between slim and none.
Now, what is an effective way to benefit from a market prediction model is to publish it. Those people may hire you to continue to develop it further or to refine it for other markets you didn't think of. No model lasts forever, so having demonstrated the ability to find one makes it more likely you will do so in the future, thus should attract big money salaries from people with the capital for your next one.
Not to say that these are legit, just pointing out its not hand-wavvy dismissive is all. I wish authors would start a paper with something like this just to address this inevitable comment. "We aren't trading this because we can't trade SLURM futures" would really help readers out if they also can't.