Attention Programmers

[ElectricSavant]

Congrats...

I cracked the code and it's automated. Roughly around 30% annual return with drawdowns less than 10-15%. The only problem I am facing now is capital. Trying to set up a fund a few years down the road while building my track record now.

 

[ElectricSavant]

Thanks for the info...

I think spending on tech should be proportional to the account size you are trading. If you have $30,000, spending $3000 a year on tech is way too much. I would think spending 2% to 5% of account value would be appropriate. There are some products out there that can find strategies based on performance metrics and then generate code that can be run in an auto trading platform. They range from $1500 to $20,000 per year.

 

[ElectricSavant]

You know...Wifey said that I should get on the Board of Directors of our Homeowners Association if I want to affect change.

I kinda' feel the same way about trading.

ES

Just an idea, maybe you'd like to take a look at Collective2. I haven't looked at them in a year+, but in the past seen some investors claiming that they subscribe to multiple strategies there, which gives them uncorrelated profits/results.
I'd also recommend learning how to trade options, as they'd allow you to develop strategies "by hand" that have defined risk and somewhat predictable returns, at least to a level that you can control.

Personally, I had an edge in options but lost it, so not sure if it could be called an edge. While now I'm working on new ones and I think/hope I have something again. So an "edge" seems to be a fluid substance. In trading stocks & futures directly, the most powerful edge is to have thousands of strategies, which is one reason that so many individual strategies just don't have sufficient pull, while getting thousands of strategies to work in real-time requires larger infrastructure. (this is what I'm currently working on)

 

[d08]

No, because this would mean that the person/company selling such software is a failure and was unable to use their own product. While at the same time no real traders give away, share or sell their edge because they’d instantly lose it.
And do you really think that RenTec would simply say “ah, making $100 billion was too much, so let’s fire everyone and sell our tech for a $million, while we can binge watch Star Wars” ?

On another hand, there are plenty of decent strategy development and automation products offered, from free to costing $millions. Some will actually instantly start auto-trading great strategies on your computer and put money into your account, with some risk but their strats will self-adjust and rebalance every few months. Others are services that will connect you to their own or 3rd party trading bots and allow you to duplicate their trades. Yet others will install TradeStarion with strategies on your own server and charge you x% of profit. Others are hedge funds that run advanced strategies and also charge you %fee. Others are consultants to hedge funds that provide tech to them.
So there is a huge ecosystem of trading software and services. Yet, anyone who actually has a strong edge where they can make $millions of $billions without working, wouldn’t sell it for any price, unless using your money as a leverage and charging you % (hedge funds). Actually selling and supporting such technology would be too much work since they could simply watch tv instead.

Though there are plenty of binary options websites that promise you wealth just by making a few clicks before you go to bed.

It's not quite as straightforward, I would sell everything I have but it all comes down to the number. I doubt there are any serious buyers for the amount I'm thinking about and in the process of verifying what they are buying, they'd learn too much about the product. I can't visualize how selling something like this would go.

There are real scenarios where traders want to get out of the profession, either due to losing interest, stress or health reasons. This applies even to funds which are also bought and sold.
Living comfortably, stress free, off the interest sounds good right about now, to me anyway.

 

[d08]

I cracked the code and it's automated. Roughly around 30% annual return with drawdowns less than 10-15%. The only problem I am facing now is capital. Trying to set up a fund a few years down the road while building my track record now.

Not to antagonize but 30% APR with 15% DD is not cracking the market. Decent but not drinking-pina-coladas-on-the-beach nice.

 

[Palindrome]

d08,
What is cracking the code in your opinion?

What about 70% per year with a max draw down of 15%?

Curious what others opinions are.

 

[d08]

d08,
What is cracking the code in your opinion?

What about 70% per year with a max draw down of 15%?

Curious what others opinions are.

Hard to say only based on two metrics but 70/15 would probably qualify. If it's just one strategy for one market, I wouldn't pay too much attention to it because things do stop working or change due to crowding - you're not the only one looking at that edge. You haven't cracked anything yet...
Then there's consistency - are the monthly returns fairly consistent? How many losing quarters if any? What about the distribution of annual returns, many strategies made huge returns in 2008 or 2009 but wouldn't produce much of anything in normal volatility.
Also how diversified is everything, how many markets? countries? timeframes? directional, non-directional?
Those are my standards for "cracking it".

 

[brucelevy]

I'm at the point now where I can leave things running and often have, however I prefer to keep an eye on it. I absolutely hated organizing my life around market hours, it gets even worse when trading multiple timezones - manually it would be impossible.

I have some strategies I'd like to get out of Ninja and into Python. Are there any book you'd recommend on the subject? I was looking into doing automated trading with R as well. I have basic R and Python skills so I need to find some guidance where I can learn from.

 

[brucelevy]

Well? Have you done it? Did you crack the code? There are many engineers fascinated with this quest.

Do you just watch re-runs of Star Wars all day? What...yeAH?

CAN YOU TURN YOUR AUTOMATED TRADER ON AND IN TEN YEARS PICK UP YOUR PROFIT?

ES

ElectricSavant, it depends on your risk tolerance and preference. I have been trading with automated systems for a few years now.

I sell my systems not because they don't work, but because there is risk involved with trading. If I can collect risk-free returns outside the market I will take it all day.

I created a thread on developing your own automated system: https://www.elitetrader.com/et/thre...m-strategy-for-ninjatrader7-with-code.325077/

 

[d08]

I have some strategies I'd like to get out of Ninja and into Python. Are there any book you'd recommend on the subject? I was looking into doing automated trading with R as well. I have basic R and Python skills so I need to find some guidance where I can learn from.

Not much of a book learner. Stackoverflow is a goldmine for me but you probably are well aware of it. It's not the ideal way to do things but learning as you go along works for me, incremental improvement.