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Automated Algorithm Trading

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Super Contributor
I wanted to discuss this topic... Its been something I wanted to build for ages now. Is there any service from a stockbroker in SA that would allow one to access a webservice where one can place trades on?
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Super Contributor
Are you not a long, really long term investor?
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Super Contributor
Rams, yes I am. I don't think I would ever focus on really short term trading, but I do find writing software that analyses the market quite interesting and thought it would be cool having a system that just does everything by itself. Its quite an interesting subject actually...
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Super Contributor
okay, there are lots of these systems out there that makes money only for the software company...good luck.
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Not applicable
Terminal Velocity and IG Markets.
IG doesnt trade SAFEX and Terminal doesnt have consistent data.

Stay away from SA...omo
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Super Contributor
exactly... thats the problem. but the big investment banks run these things too, probably with success otherwise they wouldnt be doing it. but my idea isnt really this high-frequency trading.. it will be identifying stocks that have certain fundamentals and technicals and acquiring them for long term using an automated system. but i dont think i would make it automated, firstly i dont know where to get access to such a service and secondly it will be too risky (unless proven).
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Frequent Contributor
Hi Werner, you are not wrong with your thinking. A week ago I posted something regarding a gentleman called JAmes Simons and a hedge fund which he owns called Renaissance Technology. This guy as been in the top 4 hedge fund fees earner for the past ten or so years. He repeatedly stated in his interview that they consistently delivered good results when they used computer models to determine their trades. He's a mathematician himself and only employs scientists and mathematics. Go for it my man, you are on the right track with your thinking
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Super Contributor
Yes, I remember and it's nothing new....any fund manager will be using computer models ...the point is, he makes his money, as you pointed out , from FEES. The edge with these systems is possibly that it takes out human emotion from the trade....maths, science , or computer models is not the edge...if that were the case, we would all be rich
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Frequent Contributor
You are correct in that he makes money from fees, but why should he not? I had a look at his fee structure, its very high. He takes 5% of assets under management and then 36% of the upside. With all this high structure, he must be returning well for his investors to still have approximately $25b under management. Is it not that what this game is all about i.e large compensations for a management team who produces large investor returns?
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Super Contributor
So are you're saying that James Simons didn't make any gains in the stockmarket? So based on that logic if he is now a billionaire it's because of fees, so his investors all didn't make any money? I disagree with the logic that computer models don't add an edge, if you have logic that you trade with, this logic can be computerized and will create an edge for you, otherwise it just takes longer for you to manually do the calculations? not?
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Frequent Contributor
Rams, please also remember that not everyone has the brainpower to develop these algorithms and models, even to apply statistical analysis to the data. It's the same like Google, why did only two guys in the world invent the search engine??
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Super Contributor
Parttimer, I agree with your views on the subject! Oh, and another thing, from what I understand fees on a hedge fund can vary in origin, but normally its a percentage of the gains the fund made, so if this is the case, James Simmons fund must have made money using the mathematical model?
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Frequent Contributor
more likely, perfected the search engine. Lots of other people also developed some sort of search but these two guys made a bucket full of money out of it.
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Super Contributor
And along the way made sites like AltaVista etc redundent... because they had a much better system! Did anyone of you read that book on HFT - Flashboys? is it any good? And I think mathematical algorithms are not only used for HFT or short term stuff, it can be applied to long term investing too...
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Frequent Contributor
Hi Werner, he must have. Google the top hedge fund earners and you'll see his name consistently there. So it tells me he is doing something right unless he is another Bernie Madoff??
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Super Contributor
Remember, one wants to buy high-quality companies, with great management and a great future at a DISCOUNT price... the algorithm is used to find this DISCOUNT price...
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Frequent Contributor
Hi Werner, he must have. Google the top hedge fund earners and you'll see his name consistently there. So it tells me he is doing something right unless he is another Bernie Madoff??
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Super Contributor
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Super Contributor
Read my post again.......I gave a reason why he is making money( for himself and his clients)...it's not about the mathematical system but more about the discipline....
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Super Contributor
So analysis of the numbers of stocks and shares isnt important? isnt that all mathematics? all technical indicators use maths, not? I will always believe that maths plays a huge role in systems and making money on the stockmarket for short term trading. but i dont need to argue about it.
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