I figured you couldn't do it. Did you make 59% last year?
Is Reverse Engineering Real?
- Thread starter Illini Trader
- Start date
I figured you couldn't do it. Did you make 59% last year?
I know about something like this. But, I also know that it's already widely known among sophisticated algorithmic and HFT arbitrage trading groups, latency arbitrageurs, and exchange member firms. They have advantages and use them in innovative ways.
Also, there's a huge amount of information arbitrage based on darkpool, equity derivative, and lit exchange price differentials. If you are smart enough you can sneak a peak into this information flow and pull some edge out (albeit with comparatively much less advantage).
Nevertheless, there is so much dumb money spec in the markets and algo's that lose 49% of trades (and still maintain profitability) that there's plenty of room for front running.
Also, there's a huge amount of information arbitrage based on darkpool, equity derivative, and lit exchange price differentials. If you are smart enough you can sneak a peak into this information flow and pull some edge out (albeit with comparatively much less advantage).
Nevertheless, there is so much dumb money spec in the markets and algo's that lose 49% of trades (and still maintain profitability) that there's plenty of room for front running.
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its tremendously difficult to make billions like an old nasdaq swap dealer in this fashion. for example in the uk microwaves are considered unreliable at best, to compete you need your own super conducting cables between slough and basildon which dont bend so you have to go directly down the mall and under the queens house . this is not some new broadband cable either it needs to be as wide as the channel tunnel.
Hell no, LOL, like ten years ago, I sent you a chart I was trading and you figured it out in twenty minutes including the delays, now much more price and physics, but you too smart not to eventually get it.
I like reverse engineering methods as well now, adds some trill as the norm gets so boring.
Finally figured out a momentum entry I can withstand, risks too often too great on "Mom" entries.
Not possible if the trader is using multiple strategies and is not specific for each trade which strategy was used. Also not possible if the strategy has discretionary variables.
Thus, maybe possible if its a single automated strategy and you have enough sample size timestamps of trade fills.
Also, another issue, if you do not know what timeframe was used or if the person uses multiple different timeframes...the timestamps will be useless. For example, if the person uses the 3min chart on one trade and then uses the 5min chart on the next trade and then uses the 1min chart on another trade...later posting trades at a forum with verification statement (not a blotter) to get the real timestamp and not the forum timestamp...reverse engineering the trades not possible.
Another thing, most forums have their own clock. For example, many members here at ET has complained about ET's clock (timestamp) with the post are not accurate. I wouldn't want to waste time trying to reverse engineer someones signal calls posted here at ET because of the clock issue unless the trader posted screenshots of timestamp trades in their trade execution platform.
Thus, if you notice someone contacting you to know what timeframe you used for your trades after you posted your trades in a timestamp environment or showed verification statements with timestamps...the person is trying to learn and figure out how you're trading.
I can tell some members are aware of the above which is why they will not disclose their charts used for their trades and/or they'll ignore questions when someone asks about the timeframe being used after a trade has been posted at the forum.
In fact, I've seen many traders post statements here at ET and show timestamps in their statements (e.g. Overnight) but they do not show their charts they used with those trades nor do they talk about their timeframes used for the trades.
Seriously, if you truly believe you can reverse engineer someone's trades...knock yourself out on these timestamps of trades from someone's broker trade execution platform @ https://www.elitetrader.com/et/threads/the-bs-sim-journal-add-your-own-bs.327728/
Now come back at a later date to reveal the details of the trade method being used (entry signal, exit signal, profit targets, stop/loss management) or post backtest results for the duration of his trades to show that your backtest results correlate with his trades with timestamps in those statements.
wrbtrader
If that is the case, why are the billionaire hedge fund managers so secretive? Rentech etc. never disclosed or discussed their methods, showed their trades or have employees signed strong non competes?Not possible if the trader is using multiple strategies and is not specific for each trade which strategy was used. Also not possible if the strategy has discretionary variables.
Thus, maybe possible if its a single automated strategy and you have enough sample size timestamps of trade fills.
Also, another issue, if you do not know what timeframe was used or if the person uses multiple different timeframes...the timestamps will be useless. For example, if the person uses the 3min chart on one trade and then uses the 5min chart on the next trade and then uses the 1min chart on another trade...later posting trades at a forum with verification statement (not a blotter) to get the real timestamp and not the forum timestamp...reverse engineering the trades not possible.
Another thing, most forums have their own clock. For example, many members here at ET has complained about ET's clock (timestamp) with the post are not accurate. I wouldn't want to waste time trying to reverse engineer someones signal calls posted here at ET because of the clock issue unless the trader posted screenshots of timestamp trades in their trade execution platform.
Thus, if you notice someone contacting you to know what timeframe you used for your trades after you posted your trades in a timestamp environment or showed verification statements with timestamps...the person is trying to learn and figure out how you're trading.
I can tell some members are aware of the above which is why they will not disclose their charts used for their trades and/or they'll ignore questions when someone asks about the timeframe being used after a trade has been posted at the forum.
In fact, I've seen many traders post statements here at ET and show timestamps in their statements (e.g. Overnight) but they do not show their charts they used with those trades nor do they talk about their timeframes used for the trades.
Seriously, if you truly believe you can reverse engineer someone's trades...knock yourself out on these timestamps of trades from someone's broker trade execution platform @ https://www.elitetrader.com/et/threads/the-bs-sim-journal-add-your-own-bs.327728/
Now come back at a later date to reveal the details of the trade method being used (entry signal, exit signal, profit targets, stop/loss management) or post backtest results for the duration of his trades to show that your backtest results correlate with his trades with timestamps in those statements.
wrbtrader
I remembered for years Bill Gross refused to discuss his methodology or approaches, not until after his method was widely copied and not working that well did he discussed them.
1. Why should they give ideas to the competition?
2. There is such a thing as a crowded trade. If the underlying is not liquid enough, they don't want a bunch of others pile on. This is how short squeezes happen.
3. It took probably time and effort for them to come up with a good system, again, why should they let others copy it for free?
On the other hand after they took a position specially if it is a long one, they don't mind advertising it because it is good for the stock when other buyers are coming in and pushing it up.
When the question about reverse engineering is posted at a retail discussion forum like Elitetrader.com, its usually involves talking about strategies based upon technical analysis, chart analysis or whatever.
In comparison or not comparable, trade methods by Hedge Funds aren't talking about the same nor those signing non disclosure statements it involves much more that gets more into the business aspect...
product specifications, data, know-how, formulas, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, apparatus, inventions and ideas, past, current and planned research and development, current and planned manufacturing or distribution methods and processes, specifications, materials, source of supply, customer identities or lists, current and anticipated customer requirements, contracts, price lists, market studies, business plans, marketing plans, expansion plans, potential sites, building models (including drawings and specifications thereof), registered and unregistered trade names, policies, and intentions, demographic studies, potential site locations, historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, personnel, their duties and capabilities, the names and backgrounds of key personnel, personnel training techniques and material...
I've heard of confidentiality & non-disclosure statements much more than the above involving locations of employment. I've heard of things like if a manager leaves a firm...he's not allowed to bring key employees with him / her. Also, most are time based.
Professional & college sports teams do the same too in some situations.
Simply, I think Hedge Funds are using a lot more info than retail traders to make their investment or long term trade decisions.
wrbtrader
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I am a bit skeptical because you sell at the first reversal candle and reverse the trade exactly at the next reversal candle.
This could only be achieved by running a backtest with knowing the next candle OHLC. It could not be replicated in live trading.