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Show HN: TrendFi – I built AI trading signals that self-optimize

35 points by wolfman1 1y ago

Hey HN, For the past few years, I've been obsessed with trying to get AI to produce accurate trading signals. The main challenges I found with AI trading models are lack of consistency, context window bottlenecks, hard to backtest, and high cost. Asking ChatGPT "Should I buy Bitcoin today?" doesn't work well because the LLM doesnt have a set trading strategy to opperate from. In addition, the small context window makes it challenging to fit enough historical data into. Not to mention it gets very expensive as well. My solution is a hybrid approach. Instead of having the LLM make direct predictions, I use AI as the "conductor" in the system that has the ability to run a series of backtesting simulations on high thread count AMD EPYC servers. The AI then processes the results, identifies optimal parameter changes, and can self-optimize after every trade (as needed) to adapt to changing market conditions. This setup uses LLMs for high-level reasoning and CPU cores for what they do best. I should mention that TrendFi is designed as a trend based model. It's not for day trading or catching every small market fluctuation. Its goal is to accurately identify major trend changes and provide clear alerts for those key moments. Check it out: https://trend.fi https://trend.fi – Michael

henning 1y ago
The usual response applies: if you have profitable trading signals, why would you sell it? Every time you sell a copy, that makes it less effective.
- cortesoft 1y ago
  Usually, the reason is you lack capital to trade on your signals yourself.
  - Vaslo 1y ago
    Seems like you could build the capital fairly quickly if your system works. And you should be able to have people invest in you if you show results.
    - deadbabe 1y ago
      Money now is better than money later. If you have a secret that is guaranteed to make money, but only over the course of several years, you could just sell it now and get that profit today instead of waiting. The person buying the secret will pay less than the long term profit as a fee for them giving you the money upfront now. But if you have rights to resell the secret multiple times you will earn money far quicker, perhaps more than the secret’s long term value.
    - runako 1y ago
      200%/yr starting from $10,000 => still needs a day job for a number of years. This is why Wall Street is able to hire talented young traders, some of whom will develop profitable systems. Over time, some of them are able to amass enough savings and the track record necessary to get investors. But at t=0, somebody has to pay the rent.
      - gaadd33 1y ago
        If you can reliably generate 200% a year after fees/taxes/etc, you could just get a bunch of credit cards and use broker margin on top of that. It wouldn't surprise me if you could easily start with 200k at that point. Sure the first year would be rough, like grad student living but you would quickly be in the six figures.
        HenryBemis 1y ago
        Yes, _but_ (and that is a huge but), I remember some summers ago Erdogan was giving a speech in a village and instead of saying "we have faith in the markets" he said "we have faith in Allah" (not judging, just observing)(it was a time that Turkish Lira was doing very bad, inflation was ruining the country, Erdogan hired his son-in-law to be central banker (or something like that) and that very day Euro took a big dive because of the exposure of Turkish debt, etc etc. Trump (again, not judging, just observing) said "tariffs all around" and markets and currencies crashed a couple of months ago, then recovered, then dropped again, etc. So, "big bets", especially wig margin, require small movements (or small bets with big movements). And getting in debt is never a good idea, because a tweet by Jerom, Kristine, Vladimir, Xi, Putin, Macron, can send you packing and with an extra $200k debt at 20% interest rate, from which th average person will never recover.
  - cheald 1y ago
    If you have genuine reliable alpha, leverage exists. But you'd better make damn sure your edge is as good as you think it is.
- wolfman1 1y ago
  Most trading signals aim to exploit a secret edge. A temporary market inefficiency. The value is in the secret itself. Once you sell the secret, the small window of opportunity is competed away almost instantly. Trend based models are different. The "secret" isn't a secret at all. Think of a trend based trading strategy more as a disciplined methodology. Trend based models follow price and attempt to identify as early as possible when an asset flips from bearish to bullish. Therefore, selling our model wont destroy the underlying trend, especially in highly liquid assets, such as: SPX, BTC, etc.
  - bcyn 1y ago
    This doesn't make as much sense as you think it does. If you could predictably trade a flip from bearish to bullish (for example, of course there are other trend-based signals), you would not share that signal because others would overcrowd your trade (by buying/shorting and moving the price more quickly towards the trending direction than you). A potential argument is that these signals are only applicable to a certain bracket of portfolio sizes (e.g. larger AUM funds would not be able to trade this strategy) -- but you are sharing this with folks presumably in your range of portfolio size.
    - wolfman1 1y ago
      Overcrowding an entry on highly liquid assets is something that is so far from reality for our service.
      - henning 1y ago
        The more highly liquid an asset, the more efficient it is and the fewer trading opportunities after accounting for transaction costs. In something like the S&P 500, everything is already priced in. Meme stocks and shitcoins being manipulated by whales are not efficient and also not as liquid. The larger point remains that none of the above considerations are discussed on this product's page.
        wolfman1 1y ago
- mempko 1y ago
  The market goes up exponentially over time. It's a mathematical certainty. The reason giving away trading signals is even possible is because the market isn't efficient. But not only that, there are forces behind prices beyond just speculation where signals can be correct over the long term. Also it takes a while to understand if particular signals are good outside of backtesting so there is no definitive 'these signals are perfect and everyone will use them' In other words, markets have varying scales of information and are certaintly not efficient despite what academia has you believe. Trend following works precisely because there can be underlying reasons for the trend, and traders piling on just reinforces that trend. Where profitability of the signal depends finding robust trend changes as early as possible.
dzink 1y ago
The market is a battlefield of adversaries. For someone to cash out on a signal profitably, the others have to get less. A signal system is then easily abused by the signal maker who takes a position before hustling a bunch of people to take it. Or it is abused by a hedge fund or market maker who does the same and raises spreads on you when you are trying to make trades, etc.
- wolfman1 1y ago
  That's a fair concern. Because TrendFi is a trend based model, the signals are not for HFT or day trading. Instead, we identify major market shifts that play out over weeks or months. This long timeframe means the signals are less vulnerable to the immediate front running or spread manipulation that plagues short-term signals. Also, the AI's ability to self optimize after trades means the underlying parameters are not static. If external players were to try and consistently game the signals, the system is designed to adapt to those new dynamics.
waynenilsen 1y ago
perhaps team up with https://www.getquantbase.com/ https://www.getquantbase.com/ that is how i invest in https://www.quiverquant.com/strategies/s/Congress%20Buys/ https://www.quiverquant.com/strategies/s/Congress%20Buys/ its a decent platform designed for rebalancing / taxes etc
- downrightmike 1y ago
  Serious question: What good are reported trades delayed by months?
  - waynenilsen 1y ago
    The S&P 500 historically returns about 10% annually with a Sharpe ratio around 0.5-0.6. This fund's metrics show it outperforming on both absolute and risk-adjusted bases. The 36.35% CAGR is excellent. Now, imagine if you could trade on the information when they do.
    - malshe 1y ago
      I checked this fund's performance going to the first link you shared. In the last about 3 years it underperformed S&P 500 by 2.5%
      - waynenilsen 1y ago
        I think you're looking at the wrong strategy. The first link is quantbase which has their own strategies which are not good. Quiver creates strategies you can subscribe to which have excellent performance
bko 1y ago
I'm very skeptical of systems that claim to help with trading signals. Primarily because if you had a system, then you would use it yourself. Trading is pretty much a zero sum game especially when it comes to signals. If you had a profitable signal and you publicized it, it would disappear almost immediately. If your performance is correct and you're getting 200% per year, why sell the sauce for $20 a month? I would just post the historical and open trades. Charge a subscription if you want to get exactly when you're selling them, otherwise release them on a few week lag to incentivize subscription. But give the rest away for free as you want others to pile in to your trade.
- wolfman1 1y ago
  This is typically true for day trading signal services. I'm very skeptical of them too. I've tried many of them and none worked for me. There are a lot of scams. The best model I tried was from The Technical Traders. They offer a trend based model for SPX/QQQ and they consistently outperform buy and hold for 10+ years now. We were inspired by their service and wanted to take a modern spin on trend based models with a more affordable price point (they charge $2500yr). Trend changes don't happen all that frequently. Therefore, they wont disappear immediately either. Timing trend changes correctly can make a huge difference.
  - ImPostingOnHN 1y ago
    > The best model I tried was from The Technical Traders. They offer a trend based model for SPX/QQQ and they consistently outperform buy and hold for 10+ years now. - Has that been independently verified? - Have they only been trading for 10 years? - How do we make sure this isn't a case of chance + survivorship bias?
    - wolfman1 1y ago
      Not sure, but I personally used their service for 2y and they're the real deal. Looks like they've been around since 2008. So almost 20y now. The main guy that runs it (Chris V) is top notch. I'm not affiliate with them in anyway but I would highly recommend their service to anyone.
mdorazio 1y ago
Looking at the Performance page, this doesn’t seem that impressive to me. The profits are primarily driven by going long on coins during a crypto boom, plus some favorable Rivian and Nvidia trades. If you exclude all the crypto related stuff (a lot of people here don’t want to touch that) the 2024 average individual trade return was a bit over 7%, strongly boosted by 3 outlier trades. Hard to calculate the fund performance for that subset though. Meanwhile if you bought and held MAGS over the same time period you would have gotten about a 1.67x return with long term cap gains tax benefit - probably a better total play than this model even with the crypto trades (especially if accounting for crypto trade fees). Also there is no indication of YTD 2025 performance, which would be more indicative of model strength due to the March-April dip and slowdown in crypto + AI bull markets. I’ve been burned before by services like this and am not in a hurry to do so again.
4b11b4 1y ago
What major trends are being identified and how? Does this use standard indicators that already exist?
helsinki 1y ago
If you’re making real money trading, you’re not telling people about it.
- wolfman1 1y ago
  What about Hedge funds?
  - HenryBemis 1y ago
    They want _your_ money as well as their profits, because they will charge you some nice fees irrespective if 'this year' was profitable or not.
    - wolfman1 1y ago
      The fees are no joke
- dataviz1000 1y ago
  I set out on a journey to learn quantitative trading based on signals. The first thing I did was study linear algebra, calculus, statistics, probability, and deep learning. Four months in, I’m on chapter 11 of a deep-learning time-series forecasting book, working through the problems when the author mentions that, to date (it has changed since), there hasn’t been a published paper proving deep learning works better than traditional statistical analysis—i.e., everything in scikit-learn. That sucked. So I moved on to the next step. There’s an industry that generates hundreds of millions of dollars in ad revenue from blogs and videos on how to trade. For several months, I tested each of these strategies using a backtesting library, vectorbt. People had blogs and videos about using XGBoost and LSTM with other deep-learning libraries—every single one failed. There’s so much BS in the industry, and I got sucked into the rabbit hole. At least I’m honest enough not to take advantage of other people. Maybe I’ll start a YouTube channel where I backtest every strategy to show everyone that they all fail—and explain why.
  - wolfman1 1y ago

35 points by wolfman1 1y ago

henning 1y ago

The usual response applies: if you have profitable trading signals, why would you sell it? Every time you sell a copy, that makes it less effective.

cortesoft 1y ago
Usually, the reason is you lack capital to trade on your signals yourself.
- Vaslo 1y ago
  Seems like you could build the capital fairly quickly if your system works. And you should be able to have people invest in you if you show results.
  - deadbabe 1y ago
    Money now is better than money later. If you have a secret that is guaranteed to make money, but only over the course of several years, you could just sell it now and get that profit today instead of waiting. The person buying the secret will pay less than the long term profit as a fee for them giving you the money upfront now. But if you have rights to resell the secret multiple times you will earn money far quicker, perhaps more than the secret’s long term value.
  - runako 1y ago
    200%/yr starting from $10,000 => still needs a day job for a number of years. This is why Wall Street is able to hire talented young traders, some of whom will develop profitable systems. Over time, some of them are able to amass enough savings and the track record necessary to get investors. But at t=0, somebody has to pay the rent.
    - gaadd33 1y ago
      If you can reliably generate 200% a year after fees/taxes/etc, you could just get a bunch of credit cards and use broker margin on top of that. It wouldn't surprise me if you could easily start with 200k at that point. Sure the first year would be rough, like grad student living but you would quickly be in the six figures.
      - HenryBemis 1y ago
        Yes, _but_ (and that is a huge but), I remember some summers ago Erdogan was giving a speech in a village and instead of saying "we have faith in the markets" he said "we have faith in Allah" (not judging, just observing)(it was a time that Turkish Lira was doing very bad, inflation was ruining the country, Erdogan hired his son-in-law to be central banker (or something like that) and that very day Euro took a big dive because of the exposure of Turkish debt, etc etc. Trump (again, not judging, just observing) said "tariffs all around" and markets and currencies crashed a couple of months ago, then recovered, then dropped again, etc. So, "big bets", especially wig margin, require small movements (or small bets with big movements). And getting in debt is never a good idea, because a tweet by Jerom, Kristine, Vladimir, Xi, Putin, Macron, can send you packing and with an extra $200k debt at 20% interest rate, from which th average person will never recover.
- cheald 1y ago
  If you have genuine reliable alpha, leverage exists. But you'd better make damn sure your edge is as good as you think it is.
wolfman1 1y ago
Most trading signals aim to exploit a secret edge. A temporary market inefficiency. The value is in the secret itself. Once you sell the secret, the small window of opportunity is competed away almost instantly. Trend based models are different. The "secret" isn't a secret at all. Think of a trend based trading strategy more as a disciplined methodology. Trend based models follow price and attempt to identify as early as possible when an asset flips from bearish to bullish. Therefore, selling our model wont destroy the underlying trend, especially in highly liquid assets, such as: SPX, BTC, etc.
- bcyn 1y ago
  This doesn't make as much sense as you think it does. If you could predictably trade a flip from bearish to bullish (for example, of course there are other trend-based signals), you would not share that signal because others would overcrowd your trade (by buying/shorting and moving the price more quickly towards the trending direction than you). A potential argument is that these signals are only applicable to a certain bracket of portfolio sizes (e.g. larger AUM funds would not be able to trade this strategy) -- but you are sharing this with folks presumably in your range of portfolio size.
  - wolfman1 1y ago
    Overcrowding an entry on highly liquid assets is something that is so far from reality for our service.
    - henning 1y ago
      The more highly liquid an asset, the more efficient it is and the fewer trading opportunities after accounting for transaction costs. In something like the S&P 500, everything is already priced in. Meme stocks and shitcoins being manipulated by whales are not efficient and also not as liquid. The larger point remains that none of the above considerations are discussed on this product's page.
      - wolfman1 1y ago
mempko 1y ago
The market goes up exponentially over time. It's a mathematical certainty. The reason giving away trading signals is even possible is because the market isn't efficient. But not only that, there are forces behind prices beyond just speculation where signals can be correct over the long term. Also it takes a while to understand if particular signals are good outside of backtesting so there is no definitive 'these signals are perfect and everyone will use them' In other words, markets have varying scales of information and are certaintly not efficient despite what academia has you believe. Trend following works precisely because there can be underlying reasons for the trend, and traders piling on just reinforces that trend. Where profitability of the signal depends finding robust trend changes as early as possible.

dzink 1y ago

The market is a battlefield of adversaries. For someone to cash out on a signal profitably, the others have to get less. A signal system is then easily abused by the signal maker who takes a position before hustling a bunch of people to take it. Or it is abused by a hedge fund or market maker who does the same and raises spreads on you when you are trying to make trades, etc.

wolfman1 1y ago
That's a fair concern. Because TrendFi is a trend based model, the signals are not for HFT or day trading. Instead, we identify major market shifts that play out over weeks or months. This long timeframe means the signals are less vulnerable to the immediate front running or spread manipulation that plagues short-term signals. Also, the AI's ability to self optimize after trades means the underlying parameters are not static. If external players were to try and consistently game the signals, the system is designed to adapt to those new dynamics.

waynenilsen 1y ago

perhaps team up with https://www.getquantbase.com/ https://www.getquantbase.com/ that is how i invest in https://www.quiverquant.com/strategies/s/Congress%20Buys/ https://www.quiverquant.com/strategies/s/Congress%20Buys/ its a decent platform designed for rebalancing / taxes etc

downrightmike 1y ago
Serious question: What good are reported trades delayed by months?
- waynenilsen 1y ago
  The S&P 500 historically returns about 10% annually with a Sharpe ratio around 0.5-0.6. This fund's metrics show it outperforming on both absolute and risk-adjusted bases. The 36.35% CAGR is excellent. Now, imagine if you could trade on the information when they do.
  - malshe 1y ago
    I checked this fund's performance going to the first link you shared. In the last about 3 years it underperformed S&P 500 by 2.5%
    - waynenilsen 1y ago
      I think you're looking at the wrong strategy. The first link is quantbase which has their own strategies which are not good. Quiver creates strategies you can subscribe to which have excellent performance

bko 1y ago

I'm very skeptical of systems that claim to help with trading signals. Primarily because if you had a system, then you would use it yourself. Trading is pretty much a zero sum game especially when it comes to signals. If you had a profitable signal and you publicized it, it would disappear almost immediately. If your performance is correct and you're getting 200% per year, why sell the sauce for $20 a month? I would just post the historical and open trades. Charge a subscription if you want to get exactly when you're selling them, otherwise release them on a few week lag to incentivize subscription. But give the rest away for free as you want others to pile in to your trade.

wolfman1 1y ago
This is typically true for day trading signal services. I'm very skeptical of them too. I've tried many of them and none worked for me. There are a lot of scams. The best model I tried was from The Technical Traders. They offer a trend based model for SPX/QQQ and they consistently outperform buy and hold for 10+ years now. We were inspired by their service and wanted to take a modern spin on trend based models with a more affordable price point (they charge $2500yr). Trend changes don't happen all that frequently. Therefore, they wont disappear immediately either. Timing trend changes correctly can make a huge difference.
- ImPostingOnHN 1y ago
  > The best model I tried was from The Technical Traders. They offer a trend based model for SPX/QQQ and they consistently outperform buy and hold for 10+ years now. - Has that been independently verified? - Have they only been trading for 10 years? - How do we make sure this isn't a case of chance + survivorship bias?
  - wolfman1 1y ago
    Not sure, but I personally used their service for 2y and they're the real deal. Looks like they've been around since 2008. So almost 20y now. The main guy that runs it (Chris V) is top notch. I'm not affiliate with them in anyway but I would highly recommend their service to anyone.

mdorazio 1y ago

Looking at the Performance page, this doesn’t seem that impressive to me. The profits are primarily driven by going long on coins during a crypto boom, plus some favorable Rivian and Nvidia trades. If you exclude all the crypto related stuff (a lot of people here don’t want to touch that) the 2024 average individual trade return was a bit over 7%, strongly boosted by 3 outlier trades. Hard to calculate the fund performance for that subset though. Meanwhile if you bought and held MAGS over the same time period you would have gotten about a 1.67x return with long term cap gains tax benefit - probably a better total play than this model even with the crypto trades (especially if accounting for crypto trade fees). Also there is no indication of YTD 2025 performance, which would be more indicative of model strength due to the March-April dip and slowdown in crypto + AI bull markets. I’ve been burned before by services like this and am not in a hurry to do so again.

4b11b4 1y ago

What major trends are being identified and how? Does this use standard indicators that already exist?

helsinki 1y ago

If you’re making real money trading, you’re not telling people about it.

wolfman1 1y ago
What about Hedge funds?
- HenryBemis 1y ago
  They want _your_ money as well as their profits, because they will charge you some nice fees irrespective if 'this year' was profitable or not.
  - wolfman1 1y ago
    The fees are no joke
dataviz1000 1y ago
I set out on a journey to learn quantitative trading based on signals. The first thing I did was study linear algebra, calculus, statistics, probability, and deep learning. Four months in, I’m on chapter 11 of a deep-learning time-series forecasting book, working through the problems when the author mentions that, to date (it has changed since), there hasn’t been a published paper proving deep learning works better than traditional statistical analysis—i.e., everything in scikit-learn. That sucked. So I moved on to the next step. There’s an industry that generates hundreds of millions of dollars in ad revenue from blogs and videos on how to trade. For several months, I tested each of these strategies using a backtesting library, vectorbt. People had blogs and videos about using XGBoost and LSTM with other deep-learning libraries—every single one failed. There’s so much BS in the industry, and I got sucked into the rabbit hole. At least I’m honest enough not to take advantage of other people. Maybe I’ll start a YouTube channel where I backtest every strategy to show everyone that they all fail—and explain why.
- wolfman1 1y ago