Algorithmic stock trading
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>buy some shares worth $100
>as soon as it's worth $101 (possibly a few seconds later), sell and win $1
>if it becomes worth less than $99.90, sell and only lose $0.10
>do this 10,000 times
Tell me why this wouldn't work
>>8005323
>stock goes less than $99.90
>doesn't go back up
>NET PROFIT: - $0.10
>>8005323
> assuming that stock price will increase to $101
>doesnt know anything about exchanges
>doesnt know anything about economy
>doesnt know anything about laws
>doesnt know anything about rates
>doesnt know anything about anything
BUY LOW SELL HIGH AMIRIGHT GUYS?
>>8005323
Stocks fluctuate, and your stock will go -$0.10 from your starting value about 10x more than it will go up $1.00. This results in a net gain of $0 on average (although realistically you'd probably make some money, as stocks slowly go up in general, if I'm not mistaken).
>>8005325
It either goes down or up and stays in that direction for several minutes.
I think there exist two increments—X and Y, Y < 0 and X > Y, X being $1 from the analogy and Y being $0.10—where the total gain from X is greater than the total loss from Y over all the trades.
>>8005346
forgot pic
>>8005344
Yeah but fees would eat up your profit
>>8005355
But how would you know when there is something to take advantage of? Also note that the points where its increasing are just it increasing on average over the interval, not for every point.
>>8005360
in general it's increasing on average on the interval*, not always. But even then, you can't know, or can you?
>>8005360
>But how would you know when there is something to take advantage of?
When the price goes from N to N + Increment1, that's when you sell. When the price goes from N to N - Increment2, that's also when you sell. The key is finding out what the value of I1 and I2 are.
>Also note that the points where its increasing are just it increasing on average over the interval, not for every point.
That's a matter of the scale of the graph. I couldn't find a chart for stocks that are detailed to the millisecond.
