Good luck…most simple strategy i heard to attain nirvana was …stop loss set as half of the target.
my stop loss is 1/3rd of my target 
…also, thanks for the good luck. I am really in no position to be sassy. All I have right now is some fancy theories about how to trade profitably. Getting it all to work… I have doubts every day.
Here is a Data Science approach to using daily news to predict the stock market using Python code:
… and the solution that was mentioned in the interview:
https://www.kaggle.com/ndrewgele/d/aaron7sun/stocknews/omg-nlp-with-the-djia-and-reddit
hey KMD,
what did you put under occupation on your brokerage application?
^ AF poster
“Private contractor at Club Risque - entertainer” 
Its a small boutique brokerage. I’m sure it did not go unnoticed!
did you really???
yea… why not? It’s true… and awesome! 
I am interested in algorithmic approaches to markets. However, the catch is if you don’t do it right, don’t do it at all.
From the article you posted:
Secondly, there are only 8 years’ daily news-stock data, which is roughly 2500 data points and is definitely not enough for any serious evaluation process
Above I mentioned I was back testing (manually) a potential systematic algo and I collected 200 samples. That is only a preliminary test to see if it is even worth pursuing with more rigorous examination. If I was to use this setup in a non-discretionary manner, that kind of testing would be critical before I could trust using it.
That being said, I’m not ruling out the algo route for later down the road. Definitely an intriguing challenge.
good article
I literally laughed out loud at Eugene Fama’s response
Yeah this is highly inaccurate on many levels.
wow you read fast
Day traders mess up prices, but these people are idiots, and you can’t really time the strategy of an idiot, so most smart people don’t even try take advantage of them. Consequently, prices move around a lot more than they should because no one is stopping the idiots. Moreover, since prices move around a lot more, the returns can be higher, so idiots think they are actually good at timing markets, which incentivizes more idiots to do more idiotic things.
And…
For example, consider the concept of “noise traders” (think day traders that ignore fundamentals and trade on “gut” – classic System 1 types).

…so misunderstood, so inaccurate
I thought you were an algorithmic trader.
I have some limited experience in algo development and back testing. I abandoned taking my trading in this direction (for now) when I realized I would need to learn to code from scratch and aquire more sophisticated software.
I am currently attempting to trade “with discretion” but using a rules based process. So, basically approaching the market with heuristic… but more complex than an algo. An algo takes identical trades. A discretionary process produces unique trades that fall under the umbrella if following the heuristic.
I get frustrated by the sentiment that intraday traders are a bunch of gut driven apes pushing the market around. The are an important and very functional market participant. Approaches are sophisticated ( yet simple) and together work to facilitate the pressures of buyers and seller in the intraday price auction. In fact, the main mentor in my trade group recommends “Thinking Fast and Slow” or his reading list.
I took some time to read this through. One of the main pillars of reasoning on how there can be market inefficiency to take advantage of was rooted in behavioral psychology. I’m not sure I agree. While I do believe emotion driven irrational decisions are a valid obstacle in finance, I think it is most relevant on the level of the individual and their own performance. I don’t believe there are mispricings in a healthy liquid market due do the collective irrational behavior of an entire group of participants ( like the idiot day traders) …except in rare anomalous situations. If fact, a high intraday participation level, I would argue, makes the market more efficient, not less. Think liquid market vs. Illiquid. Which one is more efficient? Who do you think all those participants are? They aren’t long term participants!
Anyway, I think the reason for market “inefficiency” is probably much simpler. It is that intrinsic value is an abstract concept. It is not like every time there is a news blast or earnings release some word of god comes down and announces the exact intrinsic value … so it shall be! No, the market is there to digest the information and I believe does so with efficient price discovery. It is efficient given the current sent of variables and outlook. It is only in hindsight that it can be determined that the market’s interpretation of the variables was wrong. Even in those cases I would argue the market was actually correct and efficient, it was just that the outcome for the underlying that was being priced turned out to be a surprise. This, of course, happens all the time and in hindsight it simply appears folks were being irrational.
I would speculate that active investors end up beating the market in the same way intraday traders do. They have a process that they repeat with consistency over a large sample of investments. They probably pair that with a favorable risk reward structure. They are not getting an edge from market inefficiency. They are getting their edge based on their large sample of investments including enough surprises to make the set profitable as a whole.
^Second paragraph is gold. Further, among the current set of opinions on intrinsic value some are actually a correct estimate of future intrinsic value (or, at least closer than the market’s estimate).
What people factor into intrinsic value changes. Sometimes people value safety and sometimes growth and sometimes something else.
Discretionary trading is probably the most common HF strategy, not sure why it is so controversial. Long term is not much different than short term. You just win or lose faster. 7 years ago the S&P had a negative 10 year return and everyone was all “stock market investing is dead” and “the lost decade.” We know how that worked out: 13% annualized return. Sheeple, amiright?6
So, I am actually reading “Thinking Fast and Slow” (the origin of the System 1 vs. system 2 theory) and now I believe the author of the article never actually read the book. Ironically, in the book there are report of studies that claim stock picking “ability” is nothing but luck and having the skill to effectually find value is an illusion. However, the book goes on to produce a line of reasoning that would suggest that intraday traders actually are able to produce results based on their skill. Cute.
That being said, I think the studies (in the book examining the the stock picker’s skill) were flawed in that they compared the results on a yearly basis. I mean, how many round trip decisions does as active manager make in a year … not enough to make a large enough sample to mean anything. I would only judge active money managers on 5 year cycles, at least.
Anyway, my point is … I am pissed at the article’s author for equating my career path a group of mindless idiots so I wanted to call him out. But also, I don’t want to disrespect what the majority of you on this forum do. Like BWYF hinted at… trading, or longer term active management… it’s all the same thing, just different time frame and different kinds of information.
From my bund trading brethren from across the pond. WTF is this? These guys are even weirder than the lot of you.
[video:https://youtu.be/x4ScsauBaWM]
(bonus points if you can tell me what this guy is actually talking about)