I started my first algo trading course. And gave up after 15 mins | Hacker News Reader

I started my first algo trading course. And gave up after 15 mins

learningquant.com

2 pointsmmarian13 comments

Technical indicators work because they work.

Really - it works because other traders decided there are price points of significance based on mathematical equations and act on it. Traditional technical analysis could be seen as looking for a set of technical indicators that optimally describe the amalgamation of TA and the capital it controls on the market at the moment.

But nowadays it's very hard to make it work.

Right, that makes sense from a logical standpoint. Do you know of any empirical research around this? From what I can tell the evidence seems against it, eg see this paper https://link.springer.com/article/10.1007/s11408-023-00433-2

As I said, nowadays it's not working so well. I wouldn't do it - saying this as a former trader that used it successfully (15-20% returns p.a.) for more than a decade, but 20 years ago. Today I don't daytrade at all, just some stock picking based on my knowledge of the tech industry.

Fair enough. How come you didn't look into other strategies? And what did you switch your focus to?

Asking because I want to keep my options open for now, while I figure out if this will work for me.

I started to make much more money by just spending the same amount of time writing enterprise software. HFTs made it very hard to find a moat in technical trading, I don't believe you can beat them at their own game today; I especially don't think you can just make something and get passive income from it - that was never the case, it was always a job, though very flexible one.

I switched to stock picking based on the premise that the market at large might be momentarily irrational because it doesn't have the same insight into the tech industry as I do - e.g. I made good profits on AMD between $30 and $150, Nvidia $100 to $400, some medium term trades on Supermicro and TSMC.

> I started to make much more money by just spending the same amount of time writing enterprise software

As in a day job in enterprise software? How come you didn't consider joining an asset management firm as a quant dev? I heard they're very lucrative.

> I switched to stock picking based on the premise that the market at large might be momentarily irrational

I see, sounds like a momentum strat.

Yeah, a day job. I'm not in the US and there are no such quant positions that would accept me remotely and/or pay more than the remote-only US corporate job I have. But I'd probably avoid it even if I was in the US, I don't like long hours and stress.

Makes sense. Appreciate the conversation! Don't have people to talk to in my personal network about this topic.

Cheers and best of luck

Ofcourse they don't work. If they did work why would anybody tell you about them?. The fact that they use thier time to tell you about them rather than trading and making money means that they do not work.

I share your skepticism. But I'm trying (forcing) myself to keep an open mind so I don't want to completely dismiss the strategy. I listened on a podcast where a crypto algo trader said he's been using it successfully in his fund: https://bettersystemtrader.com/algorithmic-crypto-trading/

I've also heard on that podcast a good explanation for why traders bother selling courses even if they're good at their jobs. Trading is volatile, so you want to acquire alternative income streams. I think that's a point that any entrepreneur would find reasonable.

If technical analysis worked, the conundrum is that revealing the secret would result in the world following the chart, which would have the effect of changing the indicator so it no longer worked.

Presumably anyone who ever found a technical indicator that worked would: 1. Currently be wealthier than Elon Musk; and 2. Never tell anyone the secret.

Not necessarily. It's well known that strategies only work under certain conditions (scale, market dynamics, etc). And there's a lot of noise these days, so even if you're right it's very hard for people to catch on. I find it similar to other business advice.

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