Common questions about the strategy and how to participate
I don't have a single formula. Trading decisions come from a lot of code, using statistical analysis and machine learning, and each stock is different — I sometimes don't even know why an order was placed.
If I gave it to you, what would you say when your friends ask you the same question?
If you don't follow my approach but tweak the parameters and place orders ahead of mine, it becomes very hard for me to keep trading. Losing my own money is one thing, but that would be very unfair to my investors and put them at risk — I can't do that.
If I had something that could end world hunger, I would share it right away. The problem with a trading strategy is that it took me a decade to develop, and if I shared it, the trading opportunity would disappear almost immediately. It is morally and legally impossible for me to share it.
Everyone has a different research direction. My suggestion: pick up some finance knowledge about stocks, statistics, programming, AI, databases, network security, and so on.
Thanks, but I don't borrow money to invest in stocks. Besides, I can borrow from my broker at only 8% interest — I don't see why I'd pay 20%.
My friends fall into two camps. The first, when I tell them, clutch their wallets, eyes wide, asking "what are you trying to pull?" The second ask me why I didn't tell them. You're in the second camp.
Because of legal restrictions, I haven't completed all the paperwork yet, so I can only take small amounts from a very limited number of people. I also need to do my own due diligence to make sure I can manage things responsibly. If you're interested, get in touch and I'll start preparing.
Long only, no shorts. The money normally sits in SPY ETF; when an opportunity arises, I sell SPY and buy stocks. When a sell signal hits, I sell the stocks and buy back SPY. In backtesting, the strategy beats SPY by about 8% per year on average. Past performance does not predict future returns.
Backtesting has been successful. I'm currently building the program for automated trading.
Completely agree. The trading API has a free-text field on each order — you can put your university's name there.
It is possible, but incredibly difficult. The reason is that other market participants are not grass eaters. Firms like Akuna Capital, Citadel Securities, Jane Street, Renaissance Technologies, and Two Sigma would erase an opportunity even if it were worth less than a penny. Competing against them is like bringing a knife to a nuclear war.
I never read one. I started after seeing "experts" on TV say stocks tend to keep rising after breaking the 52-week high and keep falling after breaking the 52-week low. So I wrote a program to test it — turned out to be groundless. Then experts said stocks would be cheaper before April 15 because everyone has to sell to pay taxes. I wrote a program to short stocks on April 1 and cover on April 15 — and it didn't make money either.
I don't really recommend it. Secrets shouldn't be shared. Besides, there's a good chance I can point out a flaw in your model within five minutes, or disprove it with data within two hours.
I think the stock market is the fairest, but probably not the easiest.
For now it's in your own account. The brokerage is Charles Schwab.
There's no advantage to trading first, and which account goes first is random.