Ask HN: What Algorithms are you using to make money? | Hacker News Reader

Ask HN: What Algorithms are you using to make money?

52 pointshoerzu21 comments

I’m thinking about algorithms that generate money. First one comes to my is the Bellman Ford algorithm. It can be used to find the shortest path in arbitrage cycles.

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    while (alive) {
        hussle()
    }

Hustle?

Hussle still means making money in slang apparently: https://www.urbandictionary.com/define.php?term=hussle

They are trade secret, so can't describe them here, but currently using algorithms created by my skip level manager [1] to make actual physical money.

[1]: https://www.cranecurrency.com/rnd-banknote-security-thread-f...

GEM - a dual momentum trading strategy that requires a couple of minutes work each month and almost never makes a trade. Highly recommend the book.

https://www.optimalmomentum.com/gem_trackrecord.html

What do you have to do each month exactly?

Once a month look at year-over-year total returns for VOO, VXUS, and BIL

keep 100% of your portfolio in one of 3 funds: VXUS, VOO, BND

use chrome, not firefox which is broken http://stockcharts.com/freecharts/perf.php?VOO,BIL,VXUS&n=25...

VOO Highest? buy or continue to hold VOO

VXUS Highest? buy or continue to hold VXUS

BIL highest? buy or continue to hold BND

I'm writing a swarm-based system that's experimenting on a bunch of different algorithms for trading. However, I'm currently building upon a modified [Quadratic Voting][1] mechanism as a means of communicating success/fitness and influencing other peers beyond pure algorithmic trading.

[1]: https://www.sss.ias.edu/files/pdfs/Rodrik/workshop%2014-15/W...

I use multi-armed bandit algorithms to optimize things. It acts as a self-healing algorithm to minimize opportunity cost / "loss" as it searches the space.

I am using Hamming distance to create money.

for me it's mostly SHA256 and Backpropagation

For what exactly?

My own, incorpated into my cloud based trading robots...

Just read your profile, sounds really interesting! Can you talk about it? I would love to hear more!

Unfortunately, the details are my trade secret, but I can answer some general questions, so fire away...

I was afraid so, no problem!

How did you start?

How much user intervention does the system require? It buys/sells shares by itself?

How diverse is your portfolio?

would you mind recommending some material?

Thanks for your time!

Hey, basically I was always fascinated in the business/stock market even as a kid, so when I grew up and started working (Sysadmin/Security space) I started investing in whatever mutual funds my bank would recommend and it took me few years to realize how bad this investment was with the front/back loads, too many fees, etc... After that I decided to invest myself, so I took the path of reading a lot of useless books on value investing, technical analysis, etc and was sill losing money until I realized, that nobody in tier right mind would publish their trading secrets and even if someone does, all the money pouring into the system will arbitrage it away rather quickly, so all those people are basically making money not from trading, but from selling the dream...

Eventually, I bought data, learned myself how to program with Python (I am not a developer, so my programs are quite rude you might say) and started back testing any trading system I can find, all were losing the the long run, but I got the feeling for the market and started testing my own ideas until I found my edge... Automating it was easy afterwards using the API from discount broker... Hosted in the cloud with redundant servers around the world, and still testing new ideas...

My system does not require daily intervention and does everything (buy, sell, sizing, stops, adjustments, exists) by itself, but I would check the logs once a week to make sure everything is working properly, I do also have monitoring in place to monitor my servers, my API providers, also I sent myself notification after buy, sell and other statistics - maybe a bit overkill, but I am a sysadmin by heart and the email and SMS are free :-)

I would recommend buying some data: the far back you can get, the better, rent small linux VPS, learn some python and start testing, it won't be easy, but if you have interest, it makes a great hobby, and who knows, you might find your edge, sooner than later and it is well worth it, the compounding will generate your FU money, and something you can leave to your kids to run after...

The books I would recommend are more for motivation and inspiration:

The Asian Saga by James Clavell, reading as a kid on how to rule your life, business and create a dynasty...

https://en.wikipedia.org/wiki/The_Asian_Saga

More Money Than God: Hedge Funds and the Making of a New Elite by Sebastian Mallaby - on how to rule the world :-)

https://en.wikipedia.org/wiki/More_Money_Than_God

A Man For All Markets by Edward O. Thorp - basically the father of quant/systematic trading and one of the greatest minds of our time...

http://www.edwardothorp.com/books/a-man-for-all-markets/

Eventually, I bought data

Hi, interested in trying this as a hobby, what kind of data did you buy? from where?

I am talking about historical stock market data and right now, the cheapest, I can personally find, is on eBay for less than $100 for 20 years...

As a sysadmin interested in the stock market myself this is really inspiring. Thanks for sharing!

Sounds fun, I will definitely research/try it!

Also, thank you for the book recommendations, already on my list!

Great! one more important advice: focus on risk management, even with mediocre trading system, if you have iron clad risk management, you will make money in the stock market...

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