3 ms·

> but most "trading" isn't as complex as they'd like you/us to believe I know nothing about this world, but with things like "doctor rediscovers integration" I

by Izkata 2y ago

> but most "trading" isn't as complex as they'd like you/us to believe I know nothing about this world, but with things like "doctor rediscovers integration" I can't help but wonder if it's not deception but ignorance - that they think it really is where math complexity tops out at.

posting_mess 2y ago
They hire people who know that maths doesn't "top out here", so they can point to them and say "look at that mathematicians/physicists/engineers/PHD's we employ - your $20Bn is safe here". Hedge funds aren't run by idiots, just a different kind of "smart" to an engineer. The engineers are are incredibly smart people, and so the bots are "incredibly smart" but "finance" is criticised by "true academics" because finance is where brains go to die. To use popular science "the three body problem" is much harder than "arb trade $10M profitably for a nice life in NYC", you just get paid less for solving the former.
- flourpower471 2y ago
  It is just a different (applied) discipline. It's like math v engineering - you can come up with some beautiful pde theory to describe this column in a building will bend under dynamic load and use it to figure out exactly the proportions. But engineering is about figuring out "just make its ratio of width to height greater than x" Because the goal is different - it's not about coming up with the most pleasing description or finding the most accurate model of something. It's about making stuff in the real world in a practical, reliable way. The three body problem is also harder than running experiments in the LHC or analysing Hubble data or treating sick kids or building roads or running a business. Anybody who says that finance is where brains go to die might do well to look in the mirror at their own brain. There are difficult challenges for smart people in basically every industry - anybody suggesting that people not working in academia are in some way stupider should probably reconsider the quality of their own brain. There are many many reasons to dislike finance. That it is somehow pedestrian or for the less clever people is not true. Nobody who espouses the points you've made has ever put their money where there mouth is. Why not start a firm, making a billion dollars a year because you're so smart and fund fusion research with it? Because it's obviously way more difficult than they make out.
  - aniviacat 2y ago
    Claiming that being smart isn't required for trading is not the same as claiming that people doing trading aren't smart. (Note that I personally have no opinion on this topic, as I'm not sufficiently informed to have one.)
    - flourpower471 2y ago
      I was specifically addressing the "being smart isn't necessary for trading". The op is making some implication across numerous posts that it's all basically a big con and it's all very simple. It is like claiming you don't need to be rocket scientist to go to the moon because they just use metal and screws. The individual parts might be simple in isolation. But it is the complexity of conducting large scale, large scope research in an environment that gives you limited feedback and will adapt to your own behaviour changes that is where the smarts are needed. OP seems to not understand the inherent difficult of doing any research. Almost anybody could be taught to make a simple circuit and battery from some basic raw materials. The fact it is simple and easy now we know the answer does not mean it was simple or easy to discover. Some of the greatest minds dedicated their entire lives to discovering things that now most 10 years olds understand. That doesn't imply you only need to have the intellect of a 10 year old to make fundamental breakthroughs in science. Working in quant trading is almost pure research - and so it requires a certain level of intellect - probably at least the intellect required to pursue a quantitative PhD successfully (not that they need the PhD but they need the capacity to be able to do one).
  - staunton 2y ago
    > The three body problem is also harder than running experiments in the LHC or analysing Hubble data or treating sick kids or building roads or running a business Not that it's particularly relevant to this discussion but the three body problem is easy. You can solve it numerically on a laptop with insane precision (much more precisely than would be useful for anything) or also write down an analytic solution (which is ugly and useless because it converge s extremely slowly, but still. See wikipedia.org/wiki/Three-body_problem).
    - 2y ago
flourpower471 2y ago
Drs rediscover integration is about people stepping far outside their field of expertise. It is neither deception or ignorance. It's the same reason some of the best physics students get PhD studentships where they are basically doing linear regression on some data. Being very good at most disciplines is about having the fundamentals absolutely nailed. In chess for example, you will probably need to get to a reasonably high level before you will be sure to see players not making obvious blunders. Why do tech firms want developers who can write bubble sort backward in assembly when they'll never do anything that fundamental in their career? Because to get to that level you have to (usually) build solid mastery of the stuff you will use. Trading is truly a complex endeavour - anybody who says it isn't has never tried to do it from scratch. Id say the industry average for somebody moving to a new firm and trying to replicate what they did at their old firm is about 5%. Im not sure what you'd call a problem where somebody has seen an existing solution, worked for years on it and in the general domain, and still would only have a 5% chance of reproducing that solution.
- chronic7202h 2y ago
  > Id say the industry average for somebody moving to a new firm and trying to replicate what they did at their old firm is about 5%. Because 95% of experienced candidates in trading were fired or are trying to scam their next employer. “Oh, yeah, my <insert HFT pipeline or statarb model> can do sharpe <random int 1 to 10> for <random int 10 to 100> million pnl per year. Trust me bro”. Fucking annoying
  - flourpower471 2y ago
    Obviously not true. The deals for most of these set ups are team founders/pms are paid mostly by profit share. So the only scam is scamming yourself into a low salary position for a couple years till they fire you. Orders of magnitude more leave their jobs of their choosing than are fired.
    - chronic94057 2y ago
      > The deals for most of these set ups are team founders/pms are paid mostly by profit share. These PMs are not the ones job hopping every year. And 95% of interview candidates are not PMs. > So the only scam is scamming yourself into a low salary position for a couple years till they fire you. 200k-300k USD salary is not low. And 1 year garden leave / non compete? That’s literally 0.5M over 2 years for doing jack shit. This is very appealing for tech SWEs or MBA product managers who are all talk and no walk. But even with profit share / pnl cut, many firms pay you a salary, even before you turn a profit. It eventually gets deducted when you turn a profit. > Orders of magnitude more leave their jobs of their choosing than are fired. Hedge fund, maybe. Prop trading, no.
next_xibalba 2y ago
Please cite your references, lest you run afoul of the lulgodz: https://diabetesjournals.org/care/article/17/2/152/17985/A-Mathematical-Model-for-the-Determination-of https://diabetesjournals.org/care/article/17/2/152/17985/A-M...
- deleted 2y ago
  [deleted]

by Izkata 2y ago

posting_mess 2y ago

They hire people who know that maths doesn't "top out here", so they can point to them and say "look at that mathematicians/physicists/engineers/PHD's we employ - your $20Bn is safe here". Hedge funds aren't run by idiots, just a different kind of "smart" to an engineer. The engineers are are incredibly smart people, and so the bots are "incredibly smart" but "finance" is criticised by "true academics" because finance is where brains go to die. To use popular science "the three body problem" is much harder than "arb trade $10M profitably for a nice life in NYC", you just get paid less for solving the former.

flourpower471 2y ago
It is just a different (applied) discipline. It's like math v engineering - you can come up with some beautiful pde theory to describe this column in a building will bend under dynamic load and use it to figure out exactly the proportions. But engineering is about figuring out "just make its ratio of width to height greater than x" Because the goal is different - it's not about coming up with the most pleasing description or finding the most accurate model of something. It's about making stuff in the real world in a practical, reliable way. The three body problem is also harder than running experiments in the LHC or analysing Hubble data or treating sick kids or building roads or running a business. Anybody who says that finance is where brains go to die might do well to look in the mirror at their own brain. There are difficult challenges for smart people in basically every industry - anybody suggesting that people not working in academia are in some way stupider should probably reconsider the quality of their own brain. There are many many reasons to dislike finance. That it is somehow pedestrian or for the less clever people is not true. Nobody who espouses the points you've made has ever put their money where there mouth is. Why not start a firm, making a billion dollars a year because you're so smart and fund fusion research with it? Because it's obviously way more difficult than they make out.
- aniviacat 2y ago
  Claiming that being smart isn't required for trading is not the same as claiming that people doing trading aren't smart. (Note that I personally have no opinion on this topic, as I'm not sufficiently informed to have one.)
  - flourpower471 2y ago
    I was specifically addressing the "being smart isn't necessary for trading". The op is making some implication across numerous posts that it's all basically a big con and it's all very simple. It is like claiming you don't need to be rocket scientist to go to the moon because they just use metal and screws. The individual parts might be simple in isolation. But it is the complexity of conducting large scale, large scope research in an environment that gives you limited feedback and will adapt to your own behaviour changes that is where the smarts are needed. OP seems to not understand the inherent difficult of doing any research. Almost anybody could be taught to make a simple circuit and battery from some basic raw materials. The fact it is simple and easy now we know the answer does not mean it was simple or easy to discover. Some of the greatest minds dedicated their entire lives to discovering things that now most 10 years olds understand. That doesn't imply you only need to have the intellect of a 10 year old to make fundamental breakthroughs in science. Working in quant trading is almost pure research - and so it requires a certain level of intellect - probably at least the intellect required to pursue a quantitative PhD successfully (not that they need the PhD but they need the capacity to be able to do one).
- staunton 2y ago
  > The three body problem is also harder than running experiments in the LHC or analysing Hubble data or treating sick kids or building roads or running a business Not that it's particularly relevant to this discussion but the three body problem is easy. You can solve it numerically on a laptop with insane precision (much more precisely than would be useful for anything) or also write down an analytic solution (which is ugly and useless because it converge s extremely slowly, but still. See wikipedia.org/wiki/Three-body_problem).
  - 2y ago

flourpower471 2y ago

Drs rediscover integration is about people stepping far outside their field of expertise. It is neither deception or ignorance. It's the same reason some of the best physics students get PhD studentships where they are basically doing linear regression on some data. Being very good at most disciplines is about having the fundamentals absolutely nailed. In chess for example, you will probably need to get to a reasonably high level before you will be sure to see players not making obvious blunders. Why do tech firms want developers who can write bubble sort backward in assembly when they'll never do anything that fundamental in their career? Because to get to that level you have to (usually) build solid mastery of the stuff you will use. Trading is truly a complex endeavour - anybody who says it isn't has never tried to do it from scratch. Id say the industry average for somebody moving to a new firm and trying to replicate what they did at their old firm is about 5%. Im not sure what you'd call a problem where somebody has seen an existing solution, worked for years on it and in the general domain, and still would only have a 5% chance of reproducing that solution.

chronic7202h 2y ago
> Id say the industry average for somebody moving to a new firm and trying to replicate what they did at their old firm is about 5%. Because 95% of experienced candidates in trading were fired or are trying to scam their next employer. “Oh, yeah, my <insert HFT pipeline or statarb model> can do sharpe <random int 1 to 10> for <random int 10 to 100> million pnl per year. Trust me bro”. Fucking annoying
- flourpower471 2y ago
  Obviously not true. The deals for most of these set ups are team founders/pms are paid mostly by profit share. So the only scam is scamming yourself into a low salary position for a couple years till they fire you. Orders of magnitude more leave their jobs of their choosing than are fired.
  - chronic94057 2y ago
    > The deals for most of these set ups are team founders/pms are paid mostly by profit share. These PMs are not the ones job hopping every year. And 95% of interview candidates are not PMs. > So the only scam is scamming yourself into a low salary position for a couple years till they fire you. 200k-300k USD salary is not low. And 1 year garden leave / non compete? That’s literally 0.5M over 2 years for doing jack shit. This is very appealing for tech SWEs or MBA product managers who are all talk and no walk. But even with profit share / pnl cut, many firms pay you a salary, even before you turn a profit. It eventually gets deducted when you turn a profit. > Orders of magnitude more leave their jobs of their choosing than are fired. Hedge fund, maybe. Prop trading, no.

next_xibalba 2y ago

Please cite your references, lest you run afoul of the lulgodz: https://diabetesjournals.org/care/article/17/2/152/17985/A-Mathematical-Model-for-the-Determination-of https://diabetesjournals.org/care/article/17/2/152/17985/A-M...

deleted 2y ago
[deleted]