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Are you asking because you're doing market research? If so I would strongly urge you to reconsider. If you're not doing market research you can probably disrega
by throwawaymath 8y ago
Are you asking because you're doing market research? If so I would strongly urge you to reconsider. If you're not doing market research you can probably disregard most of this comment.
Here are the realities of trading algorithms and trading automation:
1. Approximately no one trades competently - let alone profitably - outside of a trading firm. With very few exceptions the process of designing, implementing, testing, deploying, monitoring and improving trading algorithms is not a feasible job for a single person. This is aside from the problem of data acquisition, engineering and processing. There are people who profitably trade on their own, but they're typically veterans of a trading firm looking to grab a larger piece of the PnL on their own book. I don't know why there is this persistent belief that a lone individual is going to be automating trading competently - in the past I've compared this to thinking you could singlehandedly develop and/or maintain half of DuckDuckGo.
2. The firms which automate most of their trading - and this is increasingly the default - know how to do it and know how to acquire the talent requisite for maintaining that core competency. They like to keep things in-house where possible. They are extraordinarily secretive and don't like depending on third party infrastructure or tooling unless it's absolutely necessary. You are probably not going to develop an ultra-sticky product like Bloomberg, Nanex or kdb. A third party dependency that inserts itself into the risk management, analysis or execution pipeline is a liability. Moreover the intense secrecy means you will have difficulty talking to, or hearing from, employees of actual firms.
3. This is an incredibly crowded space to try and enter. Many companies have popped up which market products to firms looking to automate some or all of their process. They're typically not very successful in this effort for two reasons. The first is what I already mentioned about secrecy among firms. But just as importantly it's very difficult to develop a reliable trading process by hand, let alone to automate it. The customers you want to work with are savvy and most of the existing products are crap, so you'd need to have a very strong product and a very compelling case for why yours is different and useful.
To put this all together for you: by asking this question on Hacker News you're strongly selecting for answers from people who almost certainly do not trade professionally. If they believe they are competently and effectively trading on their own without professional experience, it is most likely because they have vast unknown unknowns and a limited definition of what "automated trading" means (for example, they might think they're doing automated trading because they use the Interactive Brokers API instead of manually placing orders). You can target that kind of crowd, but if you do so you're entering the B2C cottage industry of (de facto) day trading education, not the B2B industry of trading itself. Unless you're attempting to build a fintech hypergrowth startup like Robinhood you really don't want to do this in a B2C capacity; then you're optimizing for customers who have both limited money and limited experience they could use to get any more money.
- marketgod 8y agoAnyone can make money in the market. I have 0 experience working at any financial firm, and I can beat any one of those systems. If you dedicate yourself to something you can do it.
- throwawaymath 8y agoOf course I wasn't talking about you. I'm sure you can singlehandedly beat RenTec, DE Shaw, Two Sigma, Citadel, Bridgewater, PDT, Tower, TGS, Headlands, AQR and DWR; all without any professional experience in finance. And naturally it makes more sense for you to work with a vastly smaller amount of capital, on your own, instead of simply joining one of those firms. After all you routinely beat their archaic and inefficient systems. You're a walking argument for active trading instead of index investing! Buffett should check in with you. But you have to admit your skill is extraordinary, and I'm not talking about people like you in my earlier comment. I'm talking about most people, who cannot do the things that you can do. They probably come easily to you but you're just gifted with exceptional talent and work ethic. Most people can't trade profitably even with all the resources of a firm behind them; that you can do it while making all those other firms look silly is astounding and remarkable. So please don't feel as though I was downplaying your impressive accomplishments.
- marketgod 8y agoOf course they should, tell them to contact me, I will teach them a thing or three. My info is in my profile. The issue is they wouldn't give me their capital because they are scared. I have come across people who are almost as good as me as well. They don't work in finance, have no finance experience, but they beat the most of those brokerages and are self sufficient, and work from home without a boss. Anyways, there are many people who are doing what I am doing, to think they are not is not well thought out. Everyone who claims only experts can win are just not doing themselves a favour and the person listening to them. I.e. Ignore the noise and get to work. There is money to be made. Just open your eyes, there is money to be had. Edit: deleted references to a throwaway account.