Associate
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Interesting article on computerised trading from over at Reddit. Covers basic techniques and also explains the weirdness back in 2010 when US shares dropped 6% in just five minutes. Good read. 
How to Make Money in Microseconds
- Thread starter philip2009
- Start date
programming error = your bankrupt
or worse
several common trading programs have the same bug and share prices are destroyed in seconds, one min you are a millionair, 1 second later you have nothing.
They do most of the trading now.
One of the main cause of the 1987 crash was program trading.
Soldato
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and I thought lag in Starcraft 2 was annoying....Its all fine until the machines become self aware!
And siphens your cash away to save up to build itself a bionic body with nuclear missile launchers for arms.
Yikes!
What you are referring to is algorithmic trading, something that is not done with "basic techniques" at all. All the algo-funds employ phds as code-monkeys to develop their algos, backtest them and apply them to the market. This way they can make, and lose, money in microseconds.
Essentially they are looking at market mispricing/arbirtragde opportunities (to name a one) where time and volume matters.
Essentially they are looking at market mispricing/arbirtragde opportunities (to name a one) where time and volume matters.
Soldato
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One of my Uni mates was telling me of this money making scheme he'd heard of....
The short story is that it's distributed computing like folding@home or SETI, but instead of proving that we're forever alone or curing cancer, you get paid for how much data your computer processes.
I questioned him on it as surely if it's legit everyone's gonna quit SETI and folding@home and jump on this, but he swears it's legit (apparently the earlier you get in on it the more moneys you make) and he's about to buy a server to run it on.
Anyone know what he's on about? Sounds like BS to me!
The short story is that it's distributed computing like folding@home or SETI, but instead of proving that we're forever alone or curing cancer, you get paid for how much data your computer processes.
I questioned him on it as surely if it's legit everyone's gonna quit SETI and folding@home and jump on this, but he swears it's legit (apparently the earlier you get in on it the more moneys you make) and he's about to buy a server to run it on.
Anyone know what he's on about? Sounds like BS to me!
Deleted member 651465
Deleted member 651465
I'm thinking we should form a team and share the profits
Soldato
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http://www.bitcoin.org/
There was a few posts about this a while back, lot of effort for little return
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Sounds like Bitcoin ... and he's late to the party.
Soldato
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I'm thinking we should form a team and share the profits
He wanted to borrow the money from me so he could buy a server. Said it was a great investment opportunity.
I declined!
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I declined!
As I understand it as more computation power is added to the Bitcoin system the problem solving difficulty is increased to keep the total Bitcoin generation rate roughly static. So great if you were an early adopter(easier to generate), not so much as the popularity of mining increases.
It's a big problem with our current financial markets, and reveals the fundamental sham that it is. Money made on a microsecond fluctuations in prices doesn't reflect anything worthwhile, and serves no useful purpose for the wider economy, all it does is make "money" for bankers.
The world's economy needs a Tobin Tax.
The world's economy needs a Tobin Tax.
Of course it serves a purpose, that of aligning the prices instead of allowing misprices to occur in the market (inefficiencies)..
It also loses money the same way it makes money.
Of course it adds to the wider economy. These funds make money, they're taxed. Quite simple really. I also know of a couple of systematic funds in London that give very generously to various charities.
There's absolutely no evidence that rapid trading has made markets more efficient. If anything the opposite has occurred. In fact, efficient markets seem very much to be a fantasy of economists, just like rational agents. Real markets just don't work like that.