

Why I Quit Algorithmic Trading to Do Web Startups  - jayro
http://www.codusoperandi.com/posts/why-i-quit-algorithmic-trading-to-do-web-startups

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benblair
It's hard to underestimate the impact that working in a secretive industry has
on your career and tools you can build on (points 4 and 8). Trading technology
is driven by a really fantastic set of challenges. There are only a few other
problem domains where you are forced to react semi-intelligently to millions
of messages each second with microsecond latency. So there's some real
innovation going on. But what Jason says about the closed culture is spot on.

Information only flows from one firm to another through hires. There is little
open dialog between developers at different firms. For most of the last decade
that I've been in the industry, the sheer scale of the technical challenges we
were facing kept most of us innovating ahead of the consumer web (in terms of
infrastructure tech -- don't ask us about UI). But now that the consumer web
is going real-time, I expect that edge to evaporate quickly. Unless you want
to play the high frequency game (and have access to the requisite large amount
of capital), I would recommend a web start-up over a trading firm. Your salary
will likely be lower, but you'll be happier, and may even have more upside.

\- Ben

Disclaimer: I haven't fully made the leap myself yet. But I'm doing my best to
spin out a real-time web start-up from our trading firm.

~~~
ig1
I doubt consumer web is every going to reach the performance requirements
faced in the financial world. Even in gaming where latency is key, sub-100ms
latency isn't necessary because humans can't process data that fast.

When I was working at financial data provider where we were serving several
hundred thousand users with real time equity prices we looked at the rate
which human traders could follow price updates on screen and throttled
displayed prices to that speed. I imagine any kind of consumer web product
will stop at a similar point.

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mathattack
Interesting post.

It is good to see that the author sees that there is no free lunch.

My semi-outside perspective is that there are firms in an arms race to be the
quickest at providing liquidity, but his is a small fixed pie. Everything else
is being paid to take risk. It is a tough game, especially for folks with
skills marketable elsewhere.

It takes a while, but great for the poster to realize money isn't everything.

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silverbax88
I really enjoyed your post; I, like many programmers I would assume, look at
anything like financial trading or sports betting and wonder if it's really
possible to build an algorithm that could consistently beat the market.

The assumption is that once logic is removed, a machine could execute based on
data. But humans crunch data so much faster than CPUs at this point (at least
until around 2020 probably), it's still hard to pinpoint the minute logic that
goes into a successful trading strategy.

Your post really shows the realities of how challenging it is, even when
guided by humans who have past success at trading.

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neovive
This was very interesting. I would also recommend reading the article about
increasing your luck surface area
([http://www.codusoperandi.com/posts/increasing-your-luck-
surf...](http://www.codusoperandi.com/posts/increasing-your-luck-surface-
area)). Luck is a concept people think about a lot in terms of startups and
"luck surface area" is a great way to quantify this.

~~~
Retreads
Agreed - this was also my favorite part of the post.

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MarkPNeyer
i came to the same conclusions as this fellow, and left electronic trading for
the startup world almost exactly a year ago today.

i couldn't be more pleased with my decision.

