I've been wading into algo-trading for a little while now. I've read a few books, set up a few strategies on paper trading platforms.

Right now I'm trying to figure out how to consistently make $1/day as a POC exercise. That's it. I did ask the various advanced LLMs the path to earning/clearing $200K/year as an algo-trader.

Fun & sobering responses. I'll give the LLMs this -- no uplift in these conversations.

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bwfan123 6 days ago | parent | next [-]

Consistently making $1 a day may be difficult for retail trading. Rather, you could attempt to be right 51% of the time gathering a 1% edge. This is not easy for us because, it randomizes profits and losses, and we like to not lose money (make a $1 a day), and this could expose you to streaks of losses.

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nemomarx 6 days ago | parent | prev | next [-]

if you could make that much money day trading wouldn't it be scale able and someone else would already make those trades?

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browningstreet 6 days ago | parent [-]

My operating presumption is that there's runoff underneath market makers for small (on this scale) scalping. I also hope that those who need to return to investors or generate millions/year aren't trading the way I'd be trading to generate $200K/year.

	▲	csomar 6 days ago \| parent [-]
		I wouldn't count on it, especially for crypto. The market is brutal. I was playing around the other day with liquidity pools and some bot executed an arbitrage for a total gain of $0.1. That's how efficient the market is.

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antognini 6 days ago | parent | prev | next [-]

> Right now I'm trying to figure out how to consistently make $1/day as a POC exercise.

You can do this with the following strategy:

1. Buy $10,000 of Treasury bonds.

It might be more interesting to target a particular Sharpe ratio rather than an absolute dollar amount since that will be proportional to the amount you invest.

	▲	tmountain 6 days ago \| parent [-]
		~$1.28/day if you just buy SGOV with that 10k.

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IshKebab 6 days ago | parent | prev | next [-]

Surely you can't? You don't have the latency advantages of big trading firms, nor the gazillion PhDs they employ. There's absolutely no way you are going to consistently make money, let alone $200k/year. At best you'll get lucky and think it's skill.

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achierius 6 days ago | parent | next [-]

It's possible: note that each one of those quants is going to be making $400k at minimum, plausibly significantly more. So any high-maintenance strategy (eg. in some niche market) that makes less than that is just not going to be worth the time it takes to find, implement, maintain, etc.

Still not easy but it's not impossible.

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joshcsimmons 6 days ago | parent | prev | next [-]

Of course you can. If you have $17M invested in $VOO you'll make about 200k every year in dividends.

What's difficult is getting a higher rate of return.

$200k is totally doable with $2M investment capital and a bit of disciplined options trading.

	▲	TuringNYC 6 days ago \| parent \| next [-]
		>> $200k is totally doable with $2M investment capital and a bit of disciplined options trading. 10% probably. Though with the higher-than-market rate, there would also be dispersion in the consistency of the return. I could see some lean years where no money is made. I could also see a decade where you are buying at ever-higher valuations rather than dollar-cost averaging -- thus you could see a lean decade following. It all depends on how much consistency you want.
	▲	palantird 6 days ago \| parent \| prev \| next [-]
		Finally some advice for the common man.
	▲	IshKebab 6 days ago \| parent \| prev [-]
		Obviously we're talking about returns above the market. You don't need an algorithmic trading platform to invest in index funds.

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cosmicgadget 6 days ago | parent | prev | next [-]

Can you talk about maximum upside without discussing capital?

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auc 6 days ago | parent | prev [-]

You definitely can, I know single people or small teams running strategies with 2+ sharpe making millions a year.

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energy123 6 days ago | parent | prev [-]

If you can make $1/day you're already 95% of the way there.