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>A large part of their moat is that mythology, most people would quit and do some other segment of finance like quant trading or stat arb rather than try to squ

>A large part of their moat is that mythology, most people would quit and do some other segment of finance like quant trading or stat arb rather than try to squeeze out some profit in HFT. I find it silly that math types gravitate so much towards HFT/quant trading when there's so much money to be made just by studying companies and becoming a traditional trader/investor. Why go to the bother going down the route of having to invest millions of funds to build an uncertain HFT business when there's no cost in opening a retail brokerage account. If one lucks into getting a high paid HFT/quant job straight out of university it's great to save some money but otherwise I wouldn't recommend it except for pure engineers.

fnordpiglet 3y ago
Well, most people don’t have much alpha as retail traders either. Technical trading is voodoo mumbo jumbo. HFT and quant trading actually produces reliable returns. But I agree don’t try to do it yourself unless you’ve been doing this a long time. Me and my partners each have 30 more years doing this and know the weaknesses and our strengths and basically what we need to do to get a toe in the game. The reason it’s worth it is generally there are no customers, no investors, nothing but you and your partners and you can make a lot of money and be independent, then grow that into a firm. That’s attractive, and frankly with my background I feel it’s easier than trying to make a tech/retail/b2b startup again.
- majikaja 3y ago
  Who said technical trading? If one reads the financial statements properly it will take less than 30 years to become profitable.
  - fnordpiglet 3y ago
    30 years - I want to be profitable now. :-) I got paid for the last 30 years. I didn’t do it as a way of investing. I did it because it’s some of the hardest technical challenges out there. I did a tour at FAANG, built my own startups, among other things. Now it’s my turn to do for myself. Value trading works but it’s a slow slog and returns are bounded and tight. In many ways stat arb and similar quant trading can be viewed as value trading with power tools. It’s good stuff. But I like to make things fast and powerful. For me it’s not about being profitable, although profit is the primary metric. It’s about doing awesome stuff with awesome stuff no one has ever seen before.

fnordpiglet 3y ago

Well, most people don’t have much alpha as retail traders either. Technical trading is voodoo mumbo jumbo. HFT and quant trading actually produces reliable returns. But I agree don’t try to do it yourself unless you’ve been doing this a long time. Me and my partners each have 30 more years doing this and know the weaknesses and our strengths and basically what we need to do to get a toe in the game. The reason it’s worth it is generally there are no customers, no investors, nothing but you and your partners and you can make a lot of money and be independent, then grow that into a firm. That’s attractive, and frankly with my background I feel it’s easier than trying to make a tech/retail/b2b startup again.

majikaja 3y ago
Who said technical trading? If one reads the financial statements properly it will take less than 30 years to become profitable.
- fnordpiglet 3y ago
  30 years - I want to be profitable now. :-) I got paid for the last 30 years. I didn’t do it as a way of investing. I did it because it’s some of the hardest technical challenges out there. I did a tour at FAANG, built my own startups, among other things. Now it’s my turn to do for myself. Value trading works but it’s a slow slog and returns are bounded and tight. In many ways stat arb and similar quant trading can be viewed as value trading with power tools. It’s good stuff. But I like to make things fast and powerful. For me it’s not about being profitable, although profit is the primary metric. It’s about doing awesome stuff with awesome stuff no one has ever seen before.