brokerage firms earn more money than most successful traders

So your advise is for all of us to either open brokerage firms or quit trading and starve the brokerage firms into insolvency

@@nwoksh It's an insight, not a call to action

KZfaq has always lost money actually.

How The Bible led me to Islam kzfaq.info/get/bejne/l6x9e6tqrdaRf4E.html

So is it not that impossible to make money algo trading as this guy has us believe.

@@omairtech6711 its 100% possible. Banks dont trade manually. they trade our money with bots.

That’s why he gave you the warning why KZfaqr Traders are fakes.

Bad info, bad analogy. Maybe learn more about both before you make a video giving bad info on stuff like this. It almost amounts to a red herring.

His secret Alpha was to entice us to see the video from start to finish to avail KZfaq monitization.

I agree with you on everything, these days finding a financial mentor is a tough challenge which is why I am happy and grateful to have been introduced to my mentor Larry Kent Burton by a friend i made a lot of money in just two months working with him for just a small investment

Who exactly is this Mr. Larry? what does he do?And how can I take advantage of him

Sorry for interrupting your conversation. I just wanted to add to everything, Mr. Robert is a miracle trader. He helped me grow my trading account from just $ 1000 to over $ 11000, I can confidently say anyone who invests with him, you are guaranteed to make profits

He is a financial advisor and investor. He helps people to better understand the financial markets, and he also does trading and investing on his or her behalf

Getting in touch with him is very simple. Just follow him on Instagram

Thats a pretty good fucking question. After watching half-way through this video I realised that I shouldn't be listening to people talks so much. I should spend more time working on my trading. Only experience and time will tell you what is the reality of trading algos. I will continue to develop my algo no matter what shit head on youtube says and see what happens for myself. I'm taking this video with a single grain of salt.

@@buyhighselllow8398 Seems like you're taking it with a whole mouthful of salt lol. Why so mad?

@@RyeBreadSucks I'm not mad, just frustrated that I haven't progressed with my trading because I'm always in the search for answers on KZfaq and end up wasting my time watching videos like these that discourage me to do my own due diligence. The main message I got from this video is that algo trading is extremely hard and that there is almost zero chance of making a decent algo that gives you consistent returns unless you're an institution with big pockets.

I hear you it takes alot of time trying to figure out and decide what to do and what to believe is a true way to make money and not a scam kind of scheme to get money from you

Yes, I’ll make a video on all things market markers at some point

you are the product being sold

Thank you you're giving me hope I'm currently looking forward to learn python probabilities and finance to get an algorithm working. Can I ask about your studies or how much time did it took to be successful ?

​@@C-ly-demathematical when person claims he is profitable in reality means he is not.

@@paulnyagini yeah ig sooo...

API programming calls? First time I hear someone talk like that lol

@@dima6488what surprises you about him saying that, I guess it is not technically correct?

@@dataanalystbynight4375 Because no one who actually works "in the sector" (i.e developer) talks like this, since "Application Programming Interface Programming" doesn't make the slightest of sense

How The Bible led me to Islam kzfaq.info/get/bejne/l6x9e6tqrdaRf4E.html

How do you get initial liquidity for the AMM and compete against other big players such as uniswap?

@Xunning Liu I was talking about market making in centralized exchanges like binance. Making AMMs are not retail friendly.

If you’re paying ‘gas’, you’re not market making😂

Great suggestion, I will try and work this in soon!

@@QuantPy thanks you for your great work 🙏

@@QuantPywhere is the video? Have you made it?

Very much agreed! So many algo-Tubers never show the MAE of their trades, nor show e.g. Sharpe Ratios.

Estimating Alpha is an ML problem.

Significantly in trading = ££££. 30 years , wow. You should be in millions , at least.Or managing tenth of millions.Yes , the 200 is a known thing and actually 300 seems to be more accurate. But there is also let's say market structure, that can offer you opportunities. Trading is a complex thing and people are different so there's no universal solutin .As about algo trading , I think a statistic several years ago showed how ''human'' traders had better results. Also saw a docu about an algo firm with some very bright guys that somehow went bust .

That's funny because I'd say buying below the 200 day moving average means that you're buying at a fire sale.

Traded for couple of decades - 10K transactions/yr; Liquid markets are mostly random/efficient, so you can buy or sell above or below any moving average... It's still a 50/50 bet; You may win, but it's not a viable business model. Best wishes in trading and investing!

@@cooltrades7469 A couple different studies I've seen found that most technical indicators slightly improve performance when using longer period inputs. Market regime changes are what mess up most traders when they try to apply a single tool or toolkit to all situations. Re: algo firms going bust, there are plenty of them in the past two decades b/c most of them create and test a methodology that works at inception, but that market edge is perishable and erodes over time if they cannot sufficiently adapt and update their methodology to follow market conditions over longer timeframes. It's the same tool limitation problem, writ large with hundreds of millions of dollars on the line.

​@@bubbleboy821 Depends on whether the slope and concavity of the MA are positive or negative. If your MA is sloping upward, and especially if concavity is positive (showing upward acceleration), then yes, buying the dip is great. Downward slope and especially negative concavity would mean buying below the MA into an accelerating downtrend -- better to sell. John Maynard Keynes himself said the markets can remain irrational longer than you can remain solvent. :P (I take issue with that quote though, since the main part of the fault lies with us for irrationally pitting our ego against the market's direction in the first place)

Yes but not as a retail trader. You'll need to be a price maker/taker across multiple institutional venues and exchanges, operating under institutional execution terms. Most retail accounts for example won't let you bid or offer inside the prevailing spread. And most retailers won't be setup to buy in Venue A and sell in Venue B. Institutional price aggregators offering Prime Execution Services open up such opportunities to professional market participants.

This video was 20 minutes of self evident stuff that everybody should know already: a) making profit is hard b) brokers and institutions make money from other things like commissions. If someone didn't know all this before watching this video, they should not be trading anyway.

To be fair, following the S&P 500 or buying ETFs are the best method at reducing beta. They're simply the easiest and less risky methods, but of course this will reduce your potential income. There is no such a thing as low-risk high reward investment, especially not in the short term. Long term investments are an another good example of reducing average volatility. But of course if you're not careful long term investments can be even riskier. Most big corporation's price will go up eventually... but there are a lot that may never go up, especially if they the corp uses the wrong strategy.

19:44 he says it’s not impossible to find alpha.

as jack boogle phrased it: the only free lunch in the stock market is diversification

Dont be a beta, be a omega chad

What's the basis for your opinion?

@@incremental_failureThis video (he says he agrees with the video). 😉

For less than 1% of retail traders - yes. The issue is 99% do not have the patience, skill, discipline or knowledge to research and develop good quant strategies. Most professional quants themselves are not profitable and many funds on balance underperform a naked bet on the S&P 500. To get rich trading you need long term consistency and a massive fee-earning bank roll. Without a bankroll the vast majority remain over exposed (over leveraged and over trading) leading to guaranteed account blowout. Long term consistency is very difficult if you're doing it manually - it's orders of magnitude tougher programming a computer to do it. These are the simple facts. The biggest issue with most quants is lack of creativity. You can't learn algorithmic trading from a book or course. You research and develop these things through methodical experimentation and trial/error. Even then, most strategies do not stand still - they're revised and evolved to address constantly changing market regimes and sentiments.

Ah the bid ask spread can be an issue, I've learned something thanks.

you are 100% correct I am a small retail trader and I only trade alpha, this guy doesn't understand direct access brokerages as well it seems, I have only watched a few minutes but its enough, changing the channel after this post

So, in other words, if you go into business for yourself and learn the business, to use the analogy from the book this person references, you can metaphorically mine a small portion of gold dust but, for a one person shop, that profit is worth it? (That is a genuine question, not a back-handed rebuttal)

@@jerryc5743 Exactly. Not everyone in the marketplace is in direct competition with everyone else.

@@incremental_failure thanks 😀

Are you speaking from personal experience?

So you should identify the trend: long/short/flat and use the corresponding bots. For example, for a flat trend you can use a grid bot between resistance and support. For trending bots there are plenty of strategies using moving averages, lucid SAR, DCA etc. Once you identify the trend it's easy to make steady money just don't be scared to use stop losses: The trend is your friend until the end of the trend 😉

I would say no. I know plenty financial math from college and it doesnt help much for trading.

@@JuanDeDios24 thanks

@@seadotocancerdoto1565 the education that they give us is just for working for them.Nothing more or less. So you have to educate yourself by practicing.That knowledge is priceless and can't be found in any book.

SO you can make 8X every year? I will wait until your Net worth be a Million dollar & you open A Hedge Fund Firm. Iff you can do that I will give you 1 grand for your Bullshit 😂😂😂

Hey I'm happy to hear that for you I want to get into algorithm trading and wanted to know what study did you do and how long did it took you to get where you are

800% ROI with consistent win rates each month? what's your sharpe ratio? 8? lol of course it is massively overfit.

no...

True, Interactive Brokers will let you as a retail trader use about six different ‘algo’ methods to buy/sell, but they really have nothing to do with alpha, only with different ways to enter/exit the market, e.g. not showing your full order size (‘iceberg’), attempting to buy below VWAP, etc.

@@ScottHz How would IB limit the kind of algos a trader uses? You are confusing some entry methods IB calls algo and not understanding what the word means in the context of typical algo trading.

@@cyberfunk3793who said anything about 'limit'? By 'let you', I mean IB provides them as part of their trading platform. That's why I put 'algo' in quotes, I know they're not the same ;)

So basically your bot is an algo that works.

can you share with us your pattern

@@chillbackground4935😂😂 I’m sure everyone has the same thought as you… and I’m sure he won’t. Reason one, he spent all the time and money to test the algos, he deserves to be rich. Reason two, once it’s public it won’t work any more. But he already gave you plenty of information, right? From his brief description, you can reduce your search for a working algo by almost a HUNDRED fold. All we need to do is to figure out his hidden message and do one-tenth of his work.

Hey I won't obviously ask you for the algorithm but I'm looking to use python for trading and wanted to know how much time and/or what study did you do to get where you are. Have a great day

@@dawei6697 what I will say is that you have to check out the failures to see why they fail. And always always always use a benchmark. It’s near impossible to develop a working boy without a benchmark.

Don't you like the KZfaq crypto or investments scam bot thread? Oh the markets are really hard and growth but I'm really glad I'm still able to make $xxxx a week. Then some one asks how and they name drop some unicorn guru with an email id or Whatsapp number in a funny format.

Exactly... this guy doesn't know how far off the mark he is. There is huge alpha to be found via algo trading (for the small scale retail trader). I personally have found it... and it is vast.

People are dumb. They don’t ask big questions. These programs are to make herds of dumb investors for the financial companies to use to move markets.

Would it become beta then?

@@don_huzan It becomes Pi. Pi for the financial companies to eat.

@@tvviewer4500 haha good one

This is exactly true…..I find it funny that people want to open trading academies to “teach everyone” thinking their edge will still maintain. The painful truth is not everyone CAN be successful….there needs to be losers for there to be winners.

And they are all Quant based on massive super computers.

@@HermanWillems not all, there are many 'stupid' hedge funds too ;)

Only one way to find out I guess, try putting small amounts at first (I never did algorithm trading but I know sometimes you need to take a leap forward)

If your algo works (10 years or more) backtesing , you need to try it first on demo accounts live. If win in demo account then try with small amount real account. If it wins again its up to you :) I dont think algo will not work , when writing it you need to calculate all risks not profit. And it need be SIMPLE. Not complex , to work in different conditions. Algos in videos definetely not work even with backtesting ones :D Not copy paste them. But big benefit of algo is you can test your startegy.

Definitely, this has become the most well known simplistic model used for European option pricing.

@@QuantPy "simplistic" lol

@@albertociampini6473 I can't tell if you're agreeing or disagreeing. :D "simplistic" is a pretty nice euphemism for a formula that assumes and requires a constant value that can't be known in advance.

@Starvling k TLDR Blaming Black-Scholes as being "scary" is a scapegoat for human primal stupidity. I liken Black-Scholes to learning high school physics -- you're taught to calculate examples like the acceleration of a frictionless, spherical chicken with a uniformly distributed mass of 2 kg, sliding down a ramp in a vacuum. You're taught this grossly simplified abstraction b/c you don't yet have the capacity to factor real-life variables into the equation: air resistance, flapping wings, shedding feathers, chicken pooping, running around headless, etc. If you use that level of physics to build a rocket that subsequently blows up during launch, then out of ignorance blamed physics for being "scary", it'd be equivalent. The limitations of both Black-Scholes and that simplistic physics model were known and criticized by experts for decades prior, but you as the aspiring rocket scientist and hedge fund manager were too busy to listen. And then, what a terrible, tragic surprise. I think the news media latched onto Black-Scholes as "scary" because some academic sound bites pointed to it as the cause of the 1987 crash and the 2008 GFC. Or it may be a case of upset people looking for a causal factor to blame after the fact of the crisis event. TLDR they blame the use of Black-Scholes for contributing to systemic financial industry shortsightedness in not detecting and robustly protecting/hedging against outlier long tail risk. This is partly true -- Black-Scholes doesn't account well for long tail statistical outliers. Black-Scholes assumes constant volatility known in advance, which is not realistic. The volatility smile of options pricing shows that actual options pricing fudges the process with variable volatility -- implying high volatility for farther OTM options. The "smile" can also be skewed depending on situational bias to the upside or downside. A long tail event (market crash, whatever) is that one-in-a-million time when you pull that extremely high volatility lottery number. More crudely and regardless of whether the Black-Scholes equation was directly responsible, I think the majority of finance types are possessed by basic human risk-aversion and the impacts of risk/uncertainty on their paychecks, to the point of blindness. Most people pursue the holy grail of eliminating or fully knowing all risk. If they can quantify it, they can price it into their revenue models. But they get sloppy and conflate 98%, 99.9%, etc known risk with "effectively 100% known risk". And that works for a few years at a time, until a 0.01% outlier event number gets rolled on the dice of fate, and then everyone panics b/c their revenue models failed to account for it. Increasingly interconnected electronic global markets since the 90s have made it more likely for local outliers to be felt on a global level b/c someone somewhere decided at some point it was a good idea to chuck some investment funds into a high-risk developing market to chase lesser known, marginally higher returns. Thus during those years where the outlier event hasn't happened YET, week by week and quarter by quarter, every market participant is chasing down tiny percentage gains over their competitors, wherever an advantage can be found. That's what led banks to take on increasingly worse credit risks, then packaging those hot potato toxic assets up and shoveling them out the door for resale before the music stopped, leaving them holding the hot potato. "Everyone else is doing it profitably too, and the house of cards seems to be holding up just fine so far..." Because everyone thought their models effectively accounted for ALL risk, they pushed and abused the limits of the system, repealed various market safety mechanisms that were originally established after the Great Depression, and ultimately volunteered to become an industry case study in the Peltzmann effect (people are demonstrated to take on greater risks when they perceive they are protected adequately by safety equipment like seatbelts. Tragedies ensue when their PERCEPTION of safety overestimates the ACTUAL effectiveness of the safety equipment.).

@@dakaodo If the equation wasn't scary then everyone will be solving it. The only reliable solutions are stochastic (or monte carloish) based at best; those methods then end up proprietary.