I've been building a bot with Typescript because it is what I know and Python because of the tools available.
It is an overwhelming lonely endeavor. With all my other projects, I've always worked on teams, although they have always been very small teams and most of my work was autonomous -- still there was the occasional meeting and stand-ups. I've been working on this for six months and thought about bringing a friend onboard for no other reason than to not be alone.
Myself included. One issue I've run into with the public Discords is there are just too many people and therefore too much noise. A smaller non-public group would be ideal.
This article is well-timed as I was about to use options monitoring as an excuse to get into some other technologies. Probably not going to make a ton of progress as a side project, but I'm always up for a chat!
How can you hope to compete with the pros? You're not going to be faster than them and unless you have several PhDs in maths it's unlikely you'll come up with a better algorithm.
The only way I can think of is to get data that they can't.
Not everything has to be super fast. I was using quantopian to trade based mostly off fundamentals data on a monthly rebalance basis successfully. At least enough to beat the sp500 for a few years- I stopped because I went to a hedge fund that prevented me from trading that frequently and in most small caps. If you want an idea take a look at the piotroski f score and factor based investing. Aqr for example is still largely factor based.
There are plenty of strategies that can be profitable on a small scale but which just don't work as you scale up the capital or leverage. Such strategies can be simultaneously profitable for a small operation and not worth the bother for most larger trading shops.
This is just one example, but at a small scale you might be placing buy orders with let’s say $1k or $10k. This is insignificant compared to the total amount of money being traded, and will not affect the stock price.
However if you start increasing scale to $1mm or $10mm, your buy or sell orders begin to actually move the stock price itself. You might not be able to successfully sell $10mm of stock without dropping the price, signaling others to sell, further dropping the price, cutting into your own profits.
For the point I'm trying to make, the particulars of the strategy don't matter. What matters is the fact that the larger and/or more numerous your orders are, the more likely you are to move the price, and any such price movements will necessarily be disadvantageous to you.
I.e., if you're buying, the larger your buy order is (well, assuming a visible buy order) the more likely it is that liquidity-adding sellers will increase the price of their sell orders. Also makes it less likely that liquidity-taking sellers will want to trade against your large buy order, because (like everyone else) they'll tend to interpret your large buy order as a sign that the price is likely to increase, so not as good a time to sell.
You could of course use hidden orders to avoid some of those disadvantages, but hidden orders have their own set of tradeoffs too.
It is an overwhelming lonely endeavor. With all my other projects, I've always worked on teams, although they have always been very small teams and most of my work was autonomous -- still there was the occasional meeting and stand-ups. I've been working on this for six months and thought about bringing a friend onboard for no other reason than to not be alone.