TradeBot - can they be challenged ?

Discussion in 'Automated Trading' started by syswizard, Jan 6, 2007.

  1. nkhoi

    nkhoi Moderator

    -The software never went through a simulation with fake money. Cummings used his $25,000 and traded small to start, building off his incremental profits.

    -"There's no resting," said Joe Ratterman, Tradebot's vice president of business development. "The algorithms that work today may not work tomorrow."

    extreme high pressure life style.
  2. The interesting thing is the fact their strats keep changing....I wonder if that is a sign of things to come in the markets. Bots trading against bots with artificial intelligence and exploited inefficiencies evaporating quickly, forcing the maker to modify or create a new one.
  3. I think thats exactly whats happening. As soon as an edge is there it doesnt take long before it is gone.
  4. Exactly.

    Staying ahead of a curve that changes faster and faster.
    All the Algo Players are watching each other very closely.

    Note the Computer Science degree... which is what I have.

    But forget about the AI...
    These systems are not very "intelligent" at all...
    Just very well designed where every millisecond counts...
    In order to grind out profits on a one cent flip.

    If these systems were so "intelligent"...
    They would "learn" and "adapt" and "replace" genius level Quants like Mr. Cummings...
    But, of course, today's AI systems ** cannot even replace a bank teller **.

  5. There are edges that have worked....and still work...and have done so for years.
  6. Yes they CAN be challenged. They're nothing but a scalping robot who probably pays no commissions except for the exchange and regulatory fees. I've tried doing this in the past. Just churn and churn for a penny or two with lightning speed and you can make 2000 a day but you would only be covering commissions and other fees. And I didn't try this with bots. I did it on my own and I was making 1500-2000 a day when I was trading nasdaq a couple of years ago with tradestation. Unfortunately, I had no programming skills and even if I did, I think it would be impossible to program a bot based on my gut feeling. If I could some how do that, I could probably make 10,000 a day. But what good would it be if the fees are more than that?

    I believe Swift trade teaches all their traders this type of hyper trading. Because when you take a look at their p&l's you always see them making around $2000 gross on like 500,000 shares and their net comes out to about $1500... With that many shares to make 2000 gross, it's obvious that their trading similar to tradebot. Their commissions are dirt cheap like .15 a trade and they get ecn rebates and their biggest cost is only sec fees. But their payout is permanently around 50%.

    So hyper trading can only be accomplished profitably if you become the brokerage yourself or you find a broker in the u.s. similar to swift trade which is impossible as far as I know. Oh, and also, albeit the low risk, there's nothing more stressful than this type of trading, since your constantly in the market digging for pennies...
  7. 4_Q


    Cummings' applies a mean-reversion engine which scalps for pennies based upon a beta-adjusted index/component fair value figure. There is no L2 input, AFAIK. It's a MacGuffin to throw off the competition.
  8. VT96


  9. Interesting read

    "It's a great lifestyle," he said. "But it doesn't need to be as big as Goldman Sachs." You might wonder why Goldman Sachs isn't doing what Tradebot does -- or Merrill Lynch or Citigroup or JP Morgan.

    The answer lies in Tradebot's secret weapon: Cummings' brain.

    #10     Jan 7, 2007