The Quants Run Wall Street Now
- Thread starter ajacobson
- Start date
Bemoaning algorithms seems to be a common theme on ET. I must say, I like working against algorithms. Given the same inputs, you never come across a surprise against an algorithm--you might call the surprise the gambler's bluff...or gambler's fallacy. The behavior modeling still works, the difference is, you have less noise of the irrational decision maker because an algorithm never deviates from its pre-programmed decisions (in aggregate). The behavior is still there, but you don't have a stupid (and allegedly "rational") actor distorting the markets (as much) with panic and self doubt.
Dinosaurs die...or they adapt. The story of "the ways we was" has changed only in its details, but not in its lesson.
Dinosaurs die...or they adapt. The story of "the ways we was" has changed only in its details, but not in its lesson.
The Quants Run Wall Street Now
But as always
But as always
The Quants Run Wall Street Now
Those with big bankrolls run Wall Street. Quants are a dime a dozen. Beside the edge that enables them to dominate the spreads is from the corruption on the exchange - being able to pay up for faster data feeds and colo their servers to front run order flow and slam a massive load of spoofed quotes in the order book. Takes a huge bankroll to do this.
"If your not cheating you're not trying hard enough"
Those with big bankrolls run Wall Street. Quants are a dime a dozen. Beside the edge that enables them to dominate the spreads is from the corruption on the exchange - being able to pay up for faster data feeds and colo their servers to front run order flow and slam a massive load of spoofed quotes in the order book. Takes a huge bankroll to do this.
"If your not cheating you're not trying hard enough"
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My takeaway from this is that there are a lot of very, very smart people looking at the same datasets trying to extract alpha. Any meaningful edge will be quickly discovered and arbed out.
Markets are always changing. There is still a place for nimble old school discretionary traders who can identify what is working right now and exploit it.
Markets are always changing. There is still a place for nimble old school discretionary traders who can identify what is working right now and exploit it.
No, that is not so much Quant. Quant trading is mostly about longer term strategies, multi-day swing, multi-week and multi-month is not uncommon.
HFT, intraday trading and market making may count as a small subset of Quant. Not the majority.
Until the quants can effectively program 'the character of the price action' and if/when it changes, a good human trader will always be able to beat them. And no, I mean far more than some dumb volatility level going up or down re the character.
Computers don't understand subtlety, character, nuance, perversity, when right is right and when right is wrong, the list is endless what they cannot do so again, until they can do all of this and much more, a good human will always be able to out-perform them.
Computers are of course great for number crunching and speed but one can be weak on those but still clean up.
Computers don't understand subtlety, character, nuance, perversity, when right is right and when right is wrong, the list is endless what they cannot do so again, until they can do all of this and much more, a good human will always be able to out-perform them.
Computers are of course great for number crunching and speed but one can be weak on those but still clean up.
In this thread and in similar ones I have never read an explanation of how all the quants, algos, AI and the like can do any better than simply going with the trend. If QA and AI are nothing more than forms of analysis, it's only the trend that will take them to their objective.
Yet, while humans have have been reading trends for over 100 years, there are those who don't believe that trends can be read. So, understandably, they try to reach the same objective through FA, QA etc. However that doesn't mean that they run the show. Only the trend does that.
Yet, while humans have have been reading trends for over 100 years, there are those who don't believe that trends can be read. So, understandably, they try to reach the same objective through FA, QA etc. However that doesn't mean that they run the show. Only the trend does that.