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You are currently reading a thread in /sci/ - Science & Math

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Greetings from /biz/

Trying to into financial modeling

Has anyone heard of monte carlo models and does it really work?
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>>7771098
>Has anyone heard of monte carlo models
Yes.

>and does it really work?
Yes.

Any more stupid questions?
>>
What the fuck do you mean "does it work"
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Monte Carlo always works but is so slow that it usually seen as a "last resort" when faster algorithms can't be used.
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>>7771098

Yup, they work.

And no, I am not for hire. Besides, I'm already under contract with a prime dealer making good money in Manhattan.

>$$$$$$$$$
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>>7771105

Some say the price of a stock is impossible to predict and models are bullshit, like the Black Scholes model
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>>7771122
The price of stock is impossible to predict, but that doesn't mean you can't be right more than you're wrong.
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>>7771139

>The price of stock is impossible to predict
>Literally hundreds of businesses and thousands of entrepreneurs turning a profit with microtrading using TA algos
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>>7771098

>Has anyone heard of monte carlo models and does it really work?

Out, brainlet, out!
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>>7771358
>microtrading counts as predictions
got news for you, bud. the actual traders don't have a clue what their models predict, if anything.
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>>7771107
Although it's very parallellizable.
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>>7771109
> has well paid job
> New York

Dude you gonna need to hire people to help you scrub up all that jelly.
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>>7771098
lol saw that in first year of undergrad in a goof-off-class. Now I understand why we can easily end up in banking.
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>>7771358
Of course you can turn a profit, but you have to look at performances compared to the market, you mong
However it is possible to beat the market but you have to be really good. I doubt that OP can compete against multi billion dollar companies with state of the art computers and software.
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>>7771098
Ask away anon. I will tell you everything you want to know

...for a price
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>>7771419
You don't need to beat everyone to make a profit. Even ordinary people can make money on stock exchanges without much knowledge of economics and without knowledge of mathematics and computers.

Money is not everything, they also need to attract the right people. Having lots of money sometimes attract more of the wrong people than the right people.
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>>7771434
>You don't need to beat everyone to make a profit.
I think his point is that simulations can't be tested by whether they're profitable if picking stocks at random might also be profitable.
You'd want a test that showed their superiority to other techniques.
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>>7771434
I said beat the market, not beat everyone
>Even ordinary people can make money on stock exchanges without much knowledge of economics and without knowledge of mathematics and computers.
As long as the economy grows
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>>7771374
>the actual traders don't have a clue what their models predict,

So the actual traders don't have a clue what their models predict yet the output from their models results in consistant profit day after day, month after month and year after year just based on math and statistics alone?

Yeah, so actually they do have an idea. They know the probability by a consistant percentage or two whether or not a stock is going up or down. They know. That is still prediction or they would break even before expenses.

Yet they make a proft even after expenses.

>>7771419

>he thinks speculative trades have any goddamn thing to do with the snails pace of the general stock market rising or sinking
>he assumes that because the general market grows at an average percent per decade and per year that daytraders are skimming surplus capital through micro transactions
>he believes that if a stock is riding a 3 day dip or surge that none of that can be linked to the historical price over the last week/month/year and it all has to be attached to the vaccillation of the dow and other indexes
>he doesn't comprehend that the faster and smaller the trades are, the more they rely on pure TA and the closer it gets to a zero sum game

Confirmed for not having a PhD in Math.
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>>7771439
>he assumes that because the general market grows at an average percent per decade and per year that daytraders are skimming surplus capital through micro transactions
You do realise that there is such a thing as transaction costs, don't you?
>>he believes that if a stock is riding a 3 day dip or surge that none of that can be linked to the historical price over the last week/month/year
Momentum is there but it's not enough to consistently make profits off
>he doesn't comprehend that the faster and smaller the trades are, the more they rely on pure TA and the closer it gets to a zero sum game
Again, transaction costs and competition against big firms make it impossible to profit from that
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>>7771446
>You do realise that there is such a thing as transaction costs, don't you?

Yes I do realize that. If you had actually read my post attentively you'd see that I made a reference to it twice, once where I mentioned profit after expenses and once where I mentioned breaking absolutely even before expenses. Expenses are transaction costs, opportunity costs of ongoing labour and equipment cost/depreciation; not just transaction fees.

>Momentum is there but it's not enough to consistently make profits off
Wrong. Without going into details, other people are making profits consistently. Both individuals as well as groups.
>Again, transaction costs and competition against big firms make it impossible to profit from that
There's barriers to entry but these can and have been breached by solo operators. An random example from another thread is a slightly above average IQ'd serial killer. https://en.wikipedia.org/wiki/Gary_M._Heidnik
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>>7771452
Oh well you sure showed me, I guess my professor of finance and all those papers he showed us were wrong
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>>7771439
>So the actual traders don't have a clue what their models predict yet the output from their models results in consistant profit day after day, month after month and year after year just based on math and statistics alone?
>Yeah, so actually they do have an idea. They know the probability by a consistant percentage or two whether or not a stock is going up or down. They know. That is still prediction or they would break even before expenses.
>Yet they make a proft even after expenses.
Did I stutter? Yes, they don't have a clue what their models predict.

All they know, in a nutshell, is it's good to short when one moving average crosses the other, and to long when the opposite happens. Or using stuff like autoregression or correlation between different stocks. They basically only know how to make money off the system.
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>>7771489
>autoregression between different stocks.
m8...
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>>7771494
>autoregression
>and
>correlation between different stocks
Separate things, sorry for confus.
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>>7771107
my experience is that mcmc isnt a last resort, its a method you use first until you understand the problem enough to have a real solution

like its a first resort
Thread replies: 26
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