Financial topics

[Higgenbotham]

Here's the 3 weeks since this was posted May 15.



Quite a bit of similarity between the two time periods.

[Higgenbotham]

I'm not too keen on that June 6 top I forecasted, as the broad market looks strong.

[John]

I'm not too keen on that June 6 top I forecasted, as the broad market looks strong.

I was gonna remind you tomorrow morning.

[Higgenbotham]

I'm not too keen on that June 6 top I forecasted, as the broad market looks strong.

I was gonna remind you tomorrow morning.

Things looked promising for a brief time yesterday but then the market got a second wind. I'm watching carefully though. Haven't wired in to go short.

[aeden]

book1 not tallied
book 2 -- 30 day $70850.60 -30day $54488.78 30day +$16361.82
closed book 3
Book 4 Net credit/debit = +30day $8,819.16
b2&b3 $25180.98 30day

zero leverage

[Higgenbotham]

The numbers are sufficient to show that I'm putting hundreds of trades averaging about 20K per trade through my accounts and netting an average 0.2% per transaction. This is being done manually entering orders by hand using only my brain to process the information (no computer) while having none of the inherent advantages HFT has (front running/proximity to the exchange, faster processing times, market making).

There's been a lot written about the advances in AI and often the first example pointed to is that computers can trade better than humans. I can affirmatively state that I am smashing the shit out of these computers daily. I can see what they do and they are about as smart as cockroaches.

[John]

> The numbers are sufficient to show that I'm putting hundreds of
> trades averaging about 20K per trade through my accounts and
> netting an average 0.2% per transaction. This is being done
> manually entering orders by hand using only my brain to process
> the information (no computer) while having none of the inherent
> advantages HFT has (front running/proximity to the exchange,
> faster processing times, market making).

> There's been a lot written about the advances in AI and often the
> first example pointed to is that computers can trade better than
> humans. I can affirmatively state that I am smashing the shit out
> of these computers daily. I can see what they do and they are
> about as smart as cockroaches.

Think of how good the computers were ten years ago, and how much
better they are today. Extrapolate that line forward. How long
before it surpasses you?

[Higgenbotham]

> The numbers are sufficient to show that I'm putting hundreds of
> trades averaging about 20K per trade through my accounts and
> netting an average 0.2% per transaction. This is being done
> manually entering orders by hand using only my brain to process
> the information (no computer) while having none of the inherent
> advantages HFT has (front running/proximity to the exchange,
> faster processing times, market making).

> There's been a lot written about the advances in AI and often the
> first example pointed to is that computers can trade better than
> humans. I can affirmatively state that I am smashing the shit out
> of these computers daily. I can see what they do and they are
> about as smart as cockroaches.

Think of how good the computers were ten years ago, and how much
better they are today. Extrapolate that line forward. How long
before it surpasses you?

If you take away all their advantages and put them on a level playing field in the sense that they have to sit in the same location and are constrained by the same rules I am constrained by, it's going to take a step function change. I'm losing a lot to them by virtue of what they've bought to get inherent advantages I can't use. There isn't much skill involved in that.

Another thing that comes to mind is that I don't normally operate as a high frequency trader (in individual stocks), so how much better would I be if I spent more time at it?

[Higgenbotham]

Side note, I've discovered a way to become like HFT and get the advantages they get (I think) though I haven't spent much time at it. It's to trade a high priced stock like Amazon that has good liquidity and a wide bid ask spread. You need to trade few enough shares that your order doesn't show up in the quotes (I think less than 50). When I don't see anything else and have unused cash, I've done that to make grocery money and it seems to work well.

[Higgenbotham]

Consider the real world situation I encountered in the past few weeks.

I wanted to buy a stock trading around 12. Put in an order and got an error message back saying the stock only trades in 5 cent increments. 5 cents on 12 dollars is 0.4%. So let's say the bid is 12.00 and the ask is 12.05. I put in an order to buy at 12.05. The party who has the shares offered at 12.05 likely won't get filled on my order because HFT is allowed to come in and sell them at any price they want, say 12.045. You are completely at their mercy. If HFT needs the shares for their inventory they may come in at 12.025, but you don't know. You (and everyone else) pretty much have to go to the market and take whatever they give you in that 5 cent range. The computers weigh the odds and determine what they are willing to give you.