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Let's create a Stock Market prediction algorithm...
- Thread starter wonder
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Well, never the less, it's something really fascinating, predicting human and machine (high-frequency trading) behavior through algorithms.
It would be fun to write an auto-trader just to see how it performs.
It would be fun to write an auto-trader just to see how it performs.
This is a good idea.. I am not very good at math, but a friend of mine is a professor of statistics at CU who can easily draw the algorithms. I
think this is a stat problem.. also it needs data collection from different sources over a period of time.. typically 3 to 6 months (for each stock)
think this is a stat problem.. also it needs data collection from different sources over a period of time.. typically 3 to 6 months (for each stock)
the problem is that you will not find easily a source that will allow you to monitor the trades in realtime.
I already tried and the brokers won't give you access to that. You will also need to have a very fast internet connection, because if you have a bit of lag, the stock price will already have changed when you submit your order.
I think the only thing you can do, is to poll a page every second and extract the price from the HTML.
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What you could do is an app that monitors a stock price, then warns you when it drops / rises so you can buy or sell manually.
I already tried and the brokers won't give you access to that. You will also need to have a very fast internet connection, because if you have a bit of lag, the stock price will already have changed when you submit your order.
I think the only thing you can do, is to poll a page every second and extract the price from the HTML.
[edit]
What you could do is an app that monitors a stock price, then warns you when it drops / rises so you can buy or sell manually.
???
During years, I wrote robots and used them on several markets with different brokers (FXCM, BestCFD, IG Markets, etc.). My robots were able to pass orders with a reasonable delay (one second at worst). I had my own cluster of servers in a datacenter (to avoid a failure of hardware, internet connection or electric circuit) and I used softwares like MultiCharts, ProRealtime, MetaTrader or AmiBroker to create my robots. My method was all about statistics analysis and I was very successful. BUT according to one of my brokers, I was an exception. Most of his clients were losing money, and it was not uncommon to see people lose everything in a short span of time because of the leverage effect. In 2014, the AMF (the french market authority) published a survey on the results of individual investors on CFD and Forex markets from 2009 to 2012: 89% lost their money, with an average loss of 10887 euros/investor.
You have to know that some brokers are pure swindlers. Some others have very unfair practices and play clearly against you. On Wikipedia, you can read this about one of my former brokers: "The following year, in February and March 2011, a number of class actions lawsuits were filed against FXCM, alleging fraud and racketeering from deceptive and unfair trade practices, and misleading shareholders during the 2010 IPO. [...] In August 2011, the NFA fined FXCM $2M for slippage malpractices." FXCM at this time was one of the biggest and well-known brokers. It had a good reputation.
So, unless you have a deep knowledge of how work the financial markets and how to trade on them, STAY AWAY FROM THEM!!! Or just buy and sell stocks as our grandfathers did, on the long term...
Personaly, I stopped all my financial activities in 2010 because they caused me too much stress, I had more and more difficulties to be profitable, and above all I wanted to spend my time with my new born boy.
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Fred, you never cease to amaze me...
You should be working on top-secret Artificial Intelligence projects for DARPA or something...
Among the "quants" (the little name of these developpers that create algorithms based on maths for trading, the "quantitative analysts"), I was a very small and insignificant fish. Thanks to the indiscretion of one of my brokers, I was able to see the account and history of his two best clients and what I discovered was REALLY AMAZING (imagine that your account is increased by more than 50% every year!!!). In comparison, my account and my skills looked like a joke. So I don't think I'm of great interest for an agency recruiting the best brains...Fred, you never cease to amaze me...
You should be working on top-secret Artificial Intelligence projects for DARPA or something...
I used to trade, just before the turn of the millennium. I was trading manually mind you and doing quite well until I got burnt by a fraudster. I bought a substantial amount of shares in a company listed on the London Stock Exchange 250 share index: Versailles Group Limited. On paper I made a huge profit.
What looked like a great investment turned to a debacle when the CEO was found guilty of fraud (fictional accounting) and the company was found to have nonexistent assets (as they were all pocketed by the CEO etc..)
Short Story
Long Story
I lost all my money and stopped trading altogether. Probably a very wise decision as I would probably not have a shirt on my back by now!
What looked like a great investment turned to a debacle when the CEO was found guilty of fraud (fictional accounting) and the company was found to have nonexistent assets (as they were all pocketed by the CEO etc..)
Short Story
Long Story
I lost all my money and stopped trading altogether. Probably a very wise decision as I would probably not have a shirt on my back by now!
Last evening, I saw on TV a reportage about people trying to make money in addition to their job and, without surprise, they talked of the financial markets where expectations are usually unrealistic. To warn about possible dangers, they focused on a few israelian brokers that steal the money of their clients. All deposits that the clients make on their account go directly in the pocket of the company founders and, of course, everything that the clients do on markets is entirely fictitious. It's not an isolated case and not the only place in the world where imaginative people abuse of your appetite for easy money. The current swindle trend is the trading of binary options. The french market authority maintains a list of the websites to avoid for binary options. Look here. It's not a short list, alas.
Frightening indeed!
Most people I know who have savings invested in the stock market often do it by sheer necessity. In the UK the state pensions are very small, actually pitiful, therefore when you retire, if you have not paid into a private pension because you could not afford sparing the cash, you end up living as a pauper (I am not kidding). One way that many have tried is to invest some of their savings and pension monies into the Stock Exchange to get paid regular dividends. I must admit that it’s been a very tough ride these last few years, especially since the American subprime mortgage crisis that brought worldwide markets crashing down.
I suppose that many people also invested in bonds as bonds have the reputation to be safe, especially the bonds emitted by countries. A lot of insurance or pension funds favor this investment because of the minimal risk. The problem is that the next financial crisis could be a crisis on this market because of the lack of liquidity (the major banks are no longer interested by this market). So investing nowadays is really complicated.