3 ms·

I think the key thing that this piece sort of hints at is that there is money out there, but there isn't free money out there. If you want to make money tradin

I think the key thing that this piece sort of hints at is that there is money out there, but there isn't free money out there. If you want to make money trading on the stock market (with algorithms or otherwise), you're directed to devote time, effort, skill, and a large quantity of start-up funds to the effort. Of course, you could also devote time, effort, skill and capital towards starting your own business (based around algorithms or otherwise) or you could devote time, effort, and skill towards just getting a job (programming algorithms or otherwise). Likewise, as there are big players in the stock market, there are big players in any market, and smaller, more nimble businesses can try and maneuver around them (or get crushed trying). The stock market: just a part of real life. Neither a mystical land of fantastic riches, nor a freakish unholy pit of dishonest vipers and shattered dreams.

ScottBurson 14y ago
Neither a mystical land of fantastic riches, nor a freakish unholy pit of dishonest vipers and shattered dreams. Personally I think it's both of those things :-) Trading is perhaps the ultimate convex work, to borrow Michael O. Church's term. A few extremely skilled people can pull money out of the market like magic. But the average trader's performance is worse than just buying a major index fund. And those of us below average (I am still in this group, alas) can pretty much count on losing money. Your point that trading takes effort and capital that could be directed in other ways is well stated.
shogunmike 14y ago
The trick is to treat quant trading AS a business. You are essentially running a capitalised startup when you begin quant trading. There is a period of R&D, building the product (execution system), and then iterating - just like creating a mobile/web app. The main difference is that if you're not interested in raising external capital, then you don't need to do any marketing - all of your focus can be on the product. I have made it clear in the article that it is NOT easy, nor a get-rich-quick scheme which many seem to think it is. It takes a significant amount of work to generate consistently profitable strategies.

ScottBurson 14y ago

Neither a mystical land of fantastic riches, nor a freakish unholy pit of dishonest vipers and shattered dreams. Personally I think it's both of those things :-) Trading is perhaps the ultimate convex work, to borrow Michael O. Church's term. A few extremely skilled people can pull money out of the market like magic. But the average trader's performance is worse than just buying a major index fund. And those of us below average (I am still in this group, alas) can pretty much count on losing money. Your point that trading takes effort and capital that could be directed in other ways is well stated.

shogunmike 14y ago

The trick is to treat quant trading AS a business. You are essentially running a capitalised startup when you begin quant trading. There is a period of R&D, building the product (execution system), and then iterating - just like creating a mobile/web app. The main difference is that if you're not interested in raising external capital, then you don't need to do any marketing - all of your focus can be on the product. I have made it clear in the article that it is NOT easy, nor a get-rich-quick scheme which many seem to think it is. It takes a significant amount of work to generate consistently profitable strategies.