Comment by smcn | Hacker News Reader

Comment by smcn | Hacker News Reader

High level: finding the next big meme stocks (which morphed into finding any stock that could increase a lot)

I was pretty late to GME, despite having been on Reddit for a good few years. I started researching what had happened, and where the conversations were taking place just trying to understand where to place myself to be a part of the next one. I ended up checking out the typical r/WallStreeBets and the other big trading subreddits but I always felt that I'd need to devote 100% of my time to Reddit in order to capitalise on any of the information. So I built a scraper to do the heavy lifting for me. That worked well. Then I started trying to find ways to identify the good stocks from the bad. That worked even better. So I turned it loose onto many different social media platforms where people discuss trading.

It worked well enough that I ended up quitting my job to develop it and trade full time. There are still improvements that I'm working on but I think that'll always be the case.

A great proof of concept of this is BBBY last month. Out of nowhere it went from ~$5 to $30. There was no real business reason for this, just rumour and speculation. It won't be the last.

I don't know if links are allowed but if you want to follow along, it's https://feetr.io (unfortunately not accepting any more beta users currently, but all data is posted to Twitter until we launch). There's also a leaderboard at https://feetr.io/leaderboard if you're only interested in the big numbers.

The tech stack is 100% lisp. I use CCL locally, SBCL on AWS. Also, hunchentoot will power the backend when it launches. I mention that because a lot of people have this fear that hunchentoot is slow or something but in my case it's pretty rapid. Of course, make sure you're writing fast code, but it's not the bottleneck that I think people think it is.

How are you finding communities to track? Are you crawling and flowing links to shitty subteddits? Creating honeypot accounts to try and get spammed invites to telegram/discord groups? Are you following the different *Chan's? IRC?

I had a friend that did something for crypto. He would try to map pump and dump efforts to crypto projects. Gave them codenames and followed which ones had the most successful pump and dumps and then get in on them and sell early. It was a lot of work getting the spam early and being involved in all the places. I don't think he ever managed to fully automate it.

Good question!

It's a manual process of discovery. As in, I actually go out and hunt down groups talking about stocks and if it looks interesting, I'll add it into the algorithm. I'll then analyse the data over a period of a week or two and determine whether it's worth continuing. If it is, I move it to production and it'll perform as the rest do.

If a community is not publicly visible (discord, telegram, etc) I'll ask an admin if they're okay with what I'm trying to do. If it's a no, it's a no.

There are those groups that do try and force a pump and dump but I'm against using them. That's ultimately not what I'm after as I prefer organic conversation with genuine reasons to buy. Maybe the reason doesn't turn out to be true (BBBY) but that's the case with a lot of stock analysis anyway. Sometimes the reason a stock makes it to me is due to a pump and dump but there are measures taken to make sure that we're not acting on artificial metrics.

There is also a period of premarket validation which tries to measure the stocks that are deemed interesting each day, so people are (hopefully) not getting sent duds. It can happen, yesterday ADTX only managed 0.58% but moments like that help us fine tune the algo and those happen fewer and fewer.

Wait, I thought the whole point was to find pump and dumps early.

I'm not sure what you're trying to do now. The most interesting (for me anyway) would be to figure out what is going to be on Reddit before it appears by analyzing spam/pump and dump groups etc. If you're analyzing Reddit after the fact, isn't that kinda late?

No, not pump and dumps. Just stocks that a large amount of people are about to buy into. A pump and dump is a coordinated effort, whereas I'm looking for something more organic.

It might be late in that you might make less money than you would if you were in those groups but I can't say that I'm unhappy with what the algorithm is currently finding. It's primarily built for day trading, so you're in and out of trades that same day. There are times you're out within 30 minutes. The goal is near daily compounding, which leads to higher gains than holding for X number of days.

It has been recording data since 9th of August 2021 and is averaging 4.5648% across 340 stocks. Since Jan 1st this year, it's averaging 5.1779%, and I would like to think that I can get that number higher.

Note that these are perfect values, using the open price and the highest price of the day, they're unachievable consistently, I use them to understand how much potential for profit we could've had.

> No, not pump and dumps. Just stocks that a large amount of people are about to buy into. A pump and dump is a coordinated effort, whereas I'm looking for something more organic.

I guess what you call "organic", I call the very end of the tail of a "pump". I believe that Reddit sentiment is largely manipulated. When GME was going crazy, there was definitely a coordinated effort to pump AMC, BB and some other garbage that I forget.

I don't believe that suddenly a group of people will all randomly pick the same tickers to start hyping up. I'm not saying everyone involved is trying to pump/dump those stocks, I think it's a small group of people posting bullshit analysis in random places trying to get other people to buy + hype up the stock to create that "organic" interest that you are capturing.

I reckon BBBY was definitely an organized pump and dump for example, but only a small amount of threads/comments were organized. A lot of people buy into the hype and continue to hype it up themselves.

The most interesting part is identifying which stocks will end up "going" viral, by analyzing who/when/how the first mention of these tickers starts up. Maybe a certain writing style works really well, maybe if some ticker gets mentioned at the same time in 3 specific discord channels then that stock goes on to do well. Maybe if a certain reddit account posts it first it goes well, etc.

Using PRAW to get counts of ticker mentions in some subreddits isn't super interesting, at least in my eyes.

> Using PRAW to get counts of ticker mentions in some subreddits isn't super interesting, at least in my eyes.

Just to clarify, this isn't what is happening. And I agree that's not interesting. It's measuring the response to mentions and that's the score we save (we call them impressions). It's like that saying "if a tree falls in the forest, does it make a noise?", if a post goes unseen, will people still buy the stock?

We also don't just release the top X number of stocks that we recorded per day, we're looking for patterns in the data and this becomes the interesting stocks of each day, which then go on to be validated.

> that suddenly a group of people will all randomly pick the same tickers to start hyping up

Of course not, like you said: it's memetic. Sure it can start off coordinated but when it goes viral its self-perpetuating. Those are the kinds of patterns I mention in the last paragraph. You can see these upticks, the strength of them, and try to gauge how sustainable they are.

Here's me semi freaking out about BBBY just before it really ran:

https://twitter.com/0xsmcn/status/1558770400095502336

What do you mean when you say 3.5648% profit over 340 stocks?

Is it weekly/monthly/yearly? Are you tracking buy-sell for each stock daily? Are you taking into consideration loss potential? One loss could wipe multiple days gain.

> Note that these are perfect values, using the open price and the highest price of the day, they're unachievable consistently, I use them to understand how much potential for profit we could've had.

The stocks increase by that daily. You will not reach that value consistently, I urge everyone to take a conservative approach when investing, and to take profit whenever they can.

We don't (currently) invest peoples money for them, so we need a benchmark to understand how well the algorithm performed, and that was deemed the fairest.

Why does this feel like a good use of skills and time to you? I ask because to my mind it feels like a value scraper rather than a value maker, so I'm genuinely curious.

It was earning me a lot more money than a salaried position.

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