I'm not sure if this fits more in the niche of "the ultimate active trader" or "the ultimate passive investor". Perhaps you've already thought about it, but how do you plan to handle a strategy's deteriorating effectiveness as more people use it?
I personally maintain and use this library for both, with most of my investing being passive, but using the more aggressive algorithms with a smaller part of my portfolio. At the least, on either side, it serves to remove the busy work for me (like rebalancing, tracking indicators, etc) and cut out the emotion.
Part of me thinks that's a bridge faced when crossed (if plug-and-play strategies don't get much interest, no problem to solve), but my initial thoughts are limiting capital and preventing further investing in a strategy at a certain point. On the other hand "buy and hold top 500 stocks weighted by market cap" is a very common strategy that "still works", it just became the benchmark strategy (and so never beats the market by definition).
I have spent the last year building an algorithm for more efficiently trading using Interactive Brokers API. My algorithm is not a stock picker... I think this is best done using human judgement. I pick stocks based on business fundamentals, and while this strategy has underperformed during this bubble market, I think I have much lower downside risk than the people with fear of missing out.
I think retail investors like me just need a more efficient algo for getting in and out of stocks... Currently the big players can game the market far more effectively than a single trader just putting in a limit order here and there that gets quickly filled.
The main reason we started maintaining this library of models is to capture that human judgement in a box easily accessed by others without the time or resources to develop it on their own. Some of them are goofy (like choosing stocks based on what r/wallstreetsbets likes), but most of them just seek to remove the need to rebalance, check indicators constantly, or code your own human judgement into an algorithm.
The value here we think is mainly the transferability of others skills and strategies, and removing the grunt work.
By getting in and out, do you mean in a physical sense (as in large institutions front-running sell orders, beating retail), or in a technical sense (identifying the ideal time to enter or exit a position)?
Are there plans to make these "trading capable"? Would be interesting to be able to track their live performance, compare strategies, and even add some of these to my portfolio
This is a library of "investment modules" (as I prefer to call them) that I've accumulated and coded over the last several years, automated investment strategies from simple 3 portfolio rebalancing, crypto indices, trend followers, reddit sentiment analysis traders, and more.
I don't like the term algo-trader so much, because these aren't all speculative nor do any of them day or swing trade (like the name may imply or connote). They're more like investment strategies packaged in a box ready to run. They're years of my experience in quantitative finance condensed into runnable models, easily investable and distributable by anyone with or without the specialized financial knowledge or coding experience to do so on their own.
From what I understand, this is not the goal of this tool.
Their goal is to smooth out volatility, at the cost of performance. Instead of "100% VOO", they invest in a more balanced portfolio like 80% stocks/20% bonds. This means at any given point your portfolio will not have big swings in value, in case you need to withdraw money (like to buy a house) at a sub-optimal time.
Different modules have different goals. Some, like the crypto ones, have easily crushed the strategy of "buy and hold an index of the total market", the hedge fund strategy and the leveraged strategy have done so as well over their existence, and even have better "risk-adjusted returns" as represented in the Sharpe ratio.
Some, like the pair trading models or the classic section don't seek to beat the market, but try to minimized volatility regardless of market or provide an easy "all weather portfolio" one can save their emotions by happily holding regardless of the market direction.
In the future I want to add more that index FAANG companies, that hedge against inflation, that take advantage of binary outcomes or that focus on income instead of appreciation. In short, many of them beat the market and do so with less risk (look at their Sharpe ratio), many don't because they aren't seeking to.
Is it a fair assumption that the charts are from your backtesting of your algorithms? If so, I'd be hesitant to invest without seeing their performance before '08. Because aside from the dip earlier this year, the last truly large market-wide loss was '08, so starting the charts at the low point communicates nothing about what they will do when the next recession hits.
On the marketing side... you should let us know how using your service better than just calling up traditional wealth management services who have their own trading systems one can participate in.
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[ 3.1 ms ] story [ 53.2 ms ] threadPart of me thinks that's a bridge faced when crossed (if plug-and-play strategies don't get much interest, no problem to solve), but my initial thoughts are limiting capital and preventing further investing in a strategy at a certain point. On the other hand "buy and hold top 500 stocks weighted by market cap" is a very common strategy that "still works", it just became the benchmark strategy (and so never beats the market by definition).
I think retail investors like me just need a more efficient algo for getting in and out of stocks... Currently the big players can game the market far more effectively than a single trader just putting in a limit order here and there that gets quickly filled.
The value here we think is mainly the transferability of others skills and strategies, and removing the grunt work.
By getting in and out, do you mean in a physical sense (as in large institutions front-running sell orders, beating retail), or in a technical sense (identifying the ideal time to enter or exit a position)?
I don't like the term algo-trader so much, because these aren't all speculative nor do any of them day or swing trade (like the name may imply or connote). They're more like investment strategies packaged in a box ready to run. They're years of my experience in quantitative finance condensed into runnable models, easily investable and distributable by anyone with or without the specialized financial knowledge or coding experience to do so on their own.
Their goal is to smooth out volatility, at the cost of performance. Instead of "100% VOO", they invest in a more balanced portfolio like 80% stocks/20% bonds. This means at any given point your portfolio will not have big swings in value, in case you need to withdraw money (like to buy a house) at a sub-optimal time.
Some, like the pair trading models or the classic section don't seek to beat the market, but try to minimized volatility regardless of market or provide an easy "all weather portfolio" one can save their emotions by happily holding regardless of the market direction.
In the future I want to add more that index FAANG companies, that hedge against inflation, that take advantage of binary outcomes or that focus on income instead of appreciation. In short, many of them beat the market and do so with less risk (look at their Sharpe ratio), many don't because they aren't seeking to.
[1] https://beta.optionalpha.com
On the marketing side... you should let us know how using your service better than just calling up traditional wealth management services who have their own trading systems one can participate in.