Oh wow how interesting!

@@TheMathSorcerer I was told the full work is taking the VaR and TVaR of portfolios at different weights using past performances or Monte Carlo modeling using geometric Brownian motion.

So you did a whole four years of mind bending physics just to do computational work that barely covers a fraction of all that? Wow lol...well, I guess as long as they’re paying you it’s all good.

@@_SeaH0rse physics wasn't fun anymore. It also ended up being just computational work that didn't pay as much. Hoping I get through the interviews tho

@@Nchinnam I’ve heard that from a couple of physics majors. Physics was a high school girlfriend that was just too pretty for my brain, so I envy any physics person I run into 😊. If I had a handful, and given the startup ideas I have, I don’t see why we couldn’t hit the big time (I like to think of myself as an aspiring marketing engineer).

awesome!

awesome!

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I'll add to this: for every additional variable your financial strategy has, the probability of a false positive from a backtest dramatically increases. The same holds if your dataset used in training a model doesn't account for survivorship bias, has too few data points, or the model goes beyond the optimal stopping point in selection processes

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No, it's the other way around. Why would you want to buy when the 5 day SMA (which gives greater weight to recent prices) drops below the 20 day SMA? If recent prices are strong, the 5 day SMA should be above the 20 day.

@@avilash2546 this is a simple moving average so the trend would "pull" the average back up toward the 20 day.

@@NeutrinoParty Yes, that is what I said. The 5 day SMA crossing above the 20 day SMA would yield a buy signal, which is what he said in the video.

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Good luck with that....there a many huge corporations who would have already used various similar techniques if they worked....given the vast sums of money involved!

Look up his video titled "Mathematical Finance Wizardry".

The most successful hedge fund in the world based on performance is renaissance technologies, it employs high frequency trading strategies based purely on mathematical models. Please do not mislead people.

@@arthurmorgan2961 Read about survivorship bias

@@keithphw Read about Optiver

@@keithphw There are lots of quants and hedge funds that consistently make money from short-term price behavior, not just RenTech. If you believe the efficient market hypothesis, buy-and-hold investing is just not worth it given how accessible information and data is.

@@keithphw Also, because so many traders use technical analysis strategies when trading, it becomes a self-fulfilling prophecy.

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i think you can run a software with massive amounts of data (like all markets along all history) and backtest multiple strategies millions of times each to pickup just the best of them. i think it will not be perfect, but its very likely that you'll make some money in the long run. also, you can develop a portfolio distribution strategy with the same technique, that, even if your strategy didnt work on a prolonged bear market, you can rebalance it to buy low.

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Look up his video titled "Mathematical Finance Wizardry".

I think they can be very effective!

You are wrong. For example if you know your reward/risk ratio and multiply that by the win rate, then that will allow you to calculate the the average return per trade if you have properly backtested the strategy (whole subject within itself) and have an accurate win rate and reward/risk ratio. Math Sorcerer is absolutely correct. I too am a professional mathematician and make my living from what he just taught.

​​@@jodyclabornYou are wrong. You can't backtest for future win ratio / avg returns. This only tells you what would happen if you did follow your strategy in calculated period. For large numbers law to apply you must have accurate probabilities but market is not solved environment like some casino games.

⁠​⁠@@MrHardzio4Fun I am a professional mathematician as well. The Math Sorcerer and @jodyclaborn is absolutely correct. I recommend you read up on Jim Simons, a mathematician that ran the most successful hedge fund of all time. There is an entire field of professional mathematics that focuses on trading. I promise, everyone of them calculate the win rate and reward to risk ratio for every strategy they trade. Of course there is a lot more analysis that goes into building successful trading strategies, but you must calculate and ensure it has a profitable historical win rate and reward to risk ratio. To not do this in developing a trading strategy would just be foolish. Also, if mathematicians didn’t use historical/experimental/empirical probability and only relied on theoretical probability to construct models or make predictions about the future, we would still be in the Stone Age.

Yes!!

Casinos and bookies set the odds so that no matter which horse wins the the house makes money.....never lose site of that fact and you won't get caught up in a money-losing "greatest strategy in the world" scenario whereby the adherent thinks that they will break the bank at Monte Carlo!

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Everything in life runs on fear and greed

The stock market became such a casino, it’s ridiculous. It has always been like that but since 2020, my god.

Ahh Zelda!!❤️

You will have to backtest the strategy on years of historical data. I personally code it to be backtested to get these numbers.

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Oh wow awesome

What module was this under?

Definitely a good idea IMO.

@@TheMathSorcerer thanks for this!

Bonds are very dumb these days in the macroeconomic environment. Stocks should go up in the long run though. Start learning about bitcoin.

With this math you need to keep trying until it works out.

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@@ProxyAuthenticationRequired what math would you recommend?

It is a made up example 😅

Beware of "simple examples" of how to easily make money when investing!.....An unsophisticated person who follows such examples ends up broke! Economics is a social science and the models and results generated are only as reliable as the assumptions and approximations which underpin those models......unfortunately those assumptions are often very heroic (I.e unrealistic) and the models are not at all robust (I.e. If the assumptions are relaxed the models fall apart).... So, if you do not want to lose your shirt, then be careful blindly following "formulas".

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The market always change so having a static strategy will not be efficient, so you should implement new strategies and used past strategies depending on the market.

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The only way to actually profit is to learn how they cheat and that takes year of study. They use AI that tracks their losses and gains and they get all the data while feeding you fake data. They know exactly how much money is flowing in and how much has flowed out and set the price and it's direction based on that. They don't care if you get lucky and buy the dip and the sell at a peak before they dip it because they got 100 other people buying in that they just dipped on and who will paper hand. The other way to get rich in the stock market is buy GME and BBBY. Why? Because these are the only two stocks that have investors who are not selling and who are buying and DRSing. Why? Because supply and demand does not exist in the fraud market due to counterfeiting and shorting. GME investors are buying up shares and DRSing them as to take away the shares from the manipulators and GS/RC is helping them know how many they have. Once the float is locked this means there technically can be no shares trading unless the price rises(technically we need to lock the entire outstanding but there is some wiggle room). This means if there is trading that the stock is being manipulated. There are actually many people who have experienced this such as Eagletech when one guy bought the entire outstanding and the next day still had the entire stock trading like nothing happened and the price was still tanking(how when he owns all the shares? this was due to counterfeiting). The market is a fraud. There is no mathematical strategy that can let you win. Maybe AI can figure out their schemes and learn too profit off them but all they have to do is switch them. Since they have all the info(such as when they will manipulate), are protected by the government(who is part of it), and have all the money(backed by the FEDs) they can do what they want. The stock marketed is a rigged casino and, by extension, so is the entire world economy. BBBY, about a week ago, was 5$... it hit 13$ yesterday, they tanked it today to 9. If you bought in BBBY knowing that it could not go much lower due to fundamentals and that they've been shorting it since 16$ you could have profited off it like I did. Also if you know that RC bought in at 15$ and bought calls at 80 for jan23 you would know that it is likely, if you trust RC, going to go past 80$ by jan23. There is far more going on in the fraud market than just buying low and selling high. You could invest in a good company and in a day see your investment tank 50% for absolutely no reason and if you sell you lose out... else you have to wait months and hope they don't cellar box or infiltrate the company and steal your $$$. Criminals run the fraud market. Virtually all the billionaires involved have some type of record of doing crime but are never punished. E.g., Ken Griffin who runs the market and steals trillions(he's the money man for the largest billionaires) was kicked out of China for manipulation and has been caught many times in the US but he's still allowed to process 90% of retail's orders and to do PFOF along with running hedge funds and other stuff. GME has a tone of DD(research) on what is going on if you know where to look(I can't give a link since the comment will be deleted).

It's not lagging. It is what it is. Peoples assumptions about its meaning is 'lagging'.

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