Using a advisory service for high frequency trading?

H

HockeyPlayer

I'm considering investing some money in one of the strategies run by http://www.marketsci.com These are fairly high frequency strategies (~50 trades/year) that show good returns over the past couple years of live trading. Fees are 2.5%/year.

Most of my money is in index funds, this would be a speculative portion of my portfolio.

I'd be very interested in any comments about using a high frequency advisor in general, or this particular group in particular.
 
I'm not looking to learn to be a trader. I have an enjoyable and profitable day job.

I'm looking to improve the returns of my portfolio.
 
fwiw, 50 trades/yr isn't considered "high frequency". the indsutry uses that term when referencing much higher turnover, ie usually multiples of that per day.
 
Quote from HockeyPlayer:

I'm not looking to learn to be a trader. I have an enjoyable and profitable day job.
More...

90% of traders are believed to lose their money.

Your response seems like a poster child statement for "Gee, how did I lose all my trading account so quickly?" And before you complain, you should realize that this type of response will be the response from almost everyone on this board who really knows what they are doing.

You don't learn to trade, you will not know how to evaluate a service. You will be ignorant of things like overleverage, money/trade/portfolio management, Drawdowns, Risk of Ruin, etc.

It is hard enough for people who know what they are doing. Your response, is similar to that of a bug who is about a mile away from the windshield that has his number on it...
 
Quote from HockeyPlayer:

I'm considering investing some money in one of the strategies run by http://www.marketsci.com These are fairly high frequency strategies (~50 trades/year) that show good returns over the past couple years of live trading. Fees are 2.5%/year.

Most of my money is in index funds, this would be a speculative portion of my portfolio.

I'd be very interested in any comments about using a high frequency advisor in general, or this particular group in particular.
More...

A table of results as presented on their strategy page makes me very suspicious in that they ALL show positive annual returns. I would be certain that those are ALL their strategies, and not just their survivors.

While it is possible that all their strategies have been winners, it isn't likely. I'd do a LOT more research before investing. And if one their their reps tries to confuse the issue or present any information that you can't clearly understand, that's a danger signal.

One other thing to consider is that IMO the market is right now undergoing a change in 'personality', from one that strongly favored short strategies the past 2 years to one that is mixed and starting to move to the long side. It may be confusing for a while, and may cause problems with some of the traders/advisors who have been running those accounts. IMHO, I'd hold onto my cash for a few more months until we see how things are going to settle, then check their returns again.

There are so many games being played now by advisory services that it can't hurt to be doubly cautious.

Good luck.
 
90% of traders are believed to lose their money.
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What does that have to do with evaluating a service?

Ideally, I'd like to hear from people who have experience with MarketSci. Failing that, suggestions on how best to evaluate a service would be great.
 
Quote from HockeyPlayer:

What does that have to do with evaluating a service?

Ideally, I'd like to hear from people who have experience with MarketSci. Failing that, suggestions on how best to evaluate a service would be great.
More...

Try reading what followed the first line of the post. If you don't grasp it, then your plan is definitely very risky. You are trying to do something without the knowledge of what it entails.

Do you want brain surgery from a nurse? You cannot outsource something as risky as trading. If you don't know what you are doing, than you should not be asking anonymous forum posters about how to have someone else trade for you.

Again, 90% lose their money. For someone like you, it is likely more than 99%.
 
Quote from John Paterson:

High frequency stat arb is the way to go
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I'm wondering what the information value of this post is.

Do you propose that he himself should do "high frequency stat arb" -- and if so, how exactly will he compete against the top shops, with their hundreds of quants, while still keeping his day job?
 
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