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Stock bots

T

The Pentium Guy

Diamond Member
So say you made a program that would analyze all the stocks every 5 minutes, studied their trend, and decided to buy/sell a certain amount of stocks.

And you unleashed about 1000 of these bots.

Is that illegal?
 
I think the real question would be.... would it work?

You'd need a big enough bankroll to start with, and if the bots got too trade happy you'd spend more money in transaction costs then you'd make...
 
Originally posted by: The Pentium Guy
Why would it be? Low risk, high mass investing.
Click to expand...
Do you have any idea how hard it is to program a learning AI to pick meaningful information out of what is basically chaos and noise?
 
nothing illegal about it....youd need to be an amazing programmer to make that work though, and some kind of API to plug into a trading service
 
Originally posted by: tweakmm
Originally posted by: The Pentium Guy
Why would it be? Low risk, high mass investing.
Click to expand...
Do you have any idea how hard it is to program a learning AI to pick meaningful information out of what is basically chaos and noise?
Click to expand...

No doubt.

If you can create it, all the more power to you. But by the time you got done with it (assuming you are doing it yourself or with minimal help) it would be obsolete. Meaning that the way it performs its function may no longer be as relevant to online trading and the way its conducted.
 
Originally posted by: AMDZen
Originally posted by: tweakmm
Originally posted by: The Pentium Guy
Why would it be? Low risk, high mass investing.
Click to expand...
Do you have any idea how hard it is to program a learning AI to pick meaningful information out of what is basically chaos and noise?
Click to expand...

No doubt.

If you can create it, all the more power to you. But by the time you got done with it (assuming you are doing it yourself or with minimal help) it would be obsolete. Meaning that the way it performs its function may no longer be as relevant to online trading and the way its conducted.
Click to expand...

I agree but...Worth the practice. Great for studying marketing trends. Start with some 'virtual money' and see how it goes. What better way is there to spend the summer than some good ol programming?
 
Using programs to trade is not illegal. But if for some reason your programs execute trades which are illegal, you would be responsible. For example, if you worked for XYZ Company in a position where you had insider knowledge, better make sure your program doesn't get you into trouble by trading in XYZ stock.
 
Originally posted by: kranky
Using programs to trade is not illegal. But if for some reason your programs execute trades which are illegal, you would be responsible. For example, if you worked for XYZ Company in a position where you had insider knowledge, better make sure your program doesn't get you into trouble by trading in XYZ stock.
Click to expand...

That's the answer I was looking for.
 
welcome to the world of electronic trading...

building it to find market opportunities is one thing, building it so that it can execute the trades at the right time with the right prices is another thing, and managing the risk of said conglomerated position is yet another thing. Throw in the fact that it would take a boatload of money deposited into your brokerage to hold such positions is yet another thing...

A firm that I worked for did this exact thing...on average 12,000 trades of about 1k shares each day, however their level of sophistication, expertise, and financial resources would blow your mind.


 
Originally posted by: The Pentium Guy
Originally posted by: AMDZen
Originally posted by: tweakmm
Originally posted by: The Pentium Guy
Why would it be? Low risk, high mass investing.
Click to expand...
Do you have any idea how hard it is to program a learning AI to pick meaningful information out of what is basically chaos and noise?
Click to expand...

No doubt.

If you can create it, all the more power to you. But by the time you got done with it (assuming you are doing it yourself or with minimal help) it would be obsolete. Meaning that the way it performs its function may no longer be as relevant to online trading and the way its conducted.
Click to expand...

I agree but...Worth the practice. Great for studying marketing trends. Start with some 'virtual money' and see how it goes. What better way is there to spend the summer than some good ol programming?
Click to expand...
What exactly are you suggesting?
A bot to trade when a set of preprogramed circumstances occur together? Or are you talking about a program that would be programed to learn from the market while making predictions about market direction all while constantly updating itself with what it's learned?

Because the former is relatively simple and the latter is well, relatively not.
 
Originally posted by: The Pentium Guy
Originally posted by: AMDZen
Originally posted by: JS80
It's called "Program Trading." All the big banks do it. Helps make the market and create liquidity.
Click to expand...

What program does this?
Click to expand...

And do they make direct profit from the stock, or from the boosted market
Click to expand...

I'm sure each bank has their own proprietary program with sophisticated algorythms.

From a macro perspective yes they make a profit from being market makers and taking advantage of the spread between the bid and ask.
 
Originally posted by: jjsole
welcome to the world of electronic trading...

building it to find market opportunities is one thing, building it so that it can execute the trades at the right time with the right prices is another thing, and managing the risk of said conglomerated position is yet another thing. Throw in the fact that it would take a boatload of money deposited into your brokerage to hold such positions is yet another thing...

A firm that I worked for did this exact thing...on average 12,000 trades of about 1k shares each day, however their level of sophistication, expertise, and financial resources would blow your mind.
Click to expand...

lol i can always count on jjsole to answer Qs like this.

/thread
 
Originally posted by: tweakmm
Originally posted by: The Pentium Guy
Originally posted by: AMDZen
Originally posted by: tweakmm
Originally posted by: The Pentium Guy
Why would it be? Low risk, high mass investing.
Click to expand...
Do you have any idea how hard it is to program a learning AI to pick meaningful information out of what is basically chaos and noise?
Click to expand...

No doubt.

If you can create it, all the more power to you. But by the time you got done with it (assuming you are doing it yourself or with minimal help) it would be obsolete. Meaning that the way it performs its function may no longer be as relevant to online trading and the way its conducted.
Click to expand...

I agree but...Worth the practice. Great for studying marketing trends. Start with some 'virtual money' and see how it goes. What better way is there to spend the summer than some good ol programming?
Click to expand...
What exactly are you suggesting?
A bot to trade when a set of preprogramed circumstances occur together? Or are you talking about a program that would be programed to learn from the market while making predictions about market direction all while constantly updating itself with what it's learned?

Because the former is relatively simple and the latter is well, relatively not.
Click to expand...
The former. From a learning perspective it's a great way to bring in statistical analysis and programming together.
 
You would need a couple of things to do this effectively:

a). a way to make transactions at a VERY reduced rate. In terms of cents, not dollars.

b). Big ass bank roll to give you sufficient spread.

c). lots of programming hours to iron out problems.


Banks have all three of these, so they do it.
 
A and C I agree with. Choose stocks low-risk, low-profit margin.With B, my suggestion: start low, work your way up. More money = Increase risk, increase chance of higher profit.
 
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