How could simons keep his strategy secret for so long?

Discussion in 'Trading' started by trend2009, Mar 8, 2019.

  1. IAS_LLC

    IAS_LLC

    My main point is... you dont know what inputs they're using...price isn't the only story. Thus, even if you had their trades... you couldn't do anything with them. Its an observability issue.
     
    #11     Mar 9, 2019
  2. schweiz

    schweiz


    Reminds me of the discussions about reverse engineering. Which to me sounds not possible too for rather complex strategies. Might work for MA's, RSI or MACD.

    If you would have their signals fast you could piggyback them, at least if the trades would not be HFT. Hold time would be crucial factor.
     
    #12     Mar 9, 2019
  3. IAS_LLC

    IAS_LLC

    It can be done, if the inputs are known, it's called SystemID. It's just not easy, especially when the signal to noise ratios are so low, as they are in the markets.
     
    #13     Mar 9, 2019
    schweiz likes this.
  4. tradrjoe

    tradrjoe

    It's not just one strategy. It's a combination of thousands (possibly millions) of different strategies and signals across many different time frames trading on different exchanges all over the world. You cannot achieve the type of sharpe ratio that he has on billions of dollars if you just have a single alpha.
     
    #14     Mar 14, 2019
    Pekelo likes this.
  5. ironchef

    ironchef

    I am quite sure they use multiple brokerages, clearing houses and buy the position through one brokerage and sell through another. If you only work at one place handling only a small fraction, I don't see how you can figure it out?

    So, they give you a partial buy but sell through someone else, how are you going to learn from the trade?
     
    #15     Mar 14, 2019
  6. ajacobson

    ajacobson

    Many funds also insist on their broker signing an NDA - with the exception for regulatory inquiries.
     
    #16     Mar 14, 2019
  7. qlai

    qlai

    I am curious, do you guys really think they are doing something extra ordinary that no other mind in the world can conceieve? I suspect it's more about relationships, access, technology, etc. For anyone who signed NDA it may be impossible to replicate the strategies in scale without anyone knowing about it. It's kinda like you can know all about market making theory, but that doesn't mean you can run a market making shop.
     
    #17     Mar 14, 2019
  8. ajacobson

    ajacobson

    "I am curious, do you guys really think they are doing something extra ordinary that no other mind in the world can conceieve? I suspect it's more about relationships, access, technology, etc. For anyone who signed NDA it may be impossible to replicate the strategies in scale without anyone knowing about it. It's kinda like you can know all about market making theory, but that doesn't mean you can run a market making shop."

    Yes
     
    #18     Mar 14, 2019
    dealmaker likes this.
  9. qlai

    qlai

  10. In an interview he said he finds anomalies in price action using mostly statistics and some probability theory mathematics. Of course he doesn't go much into detail, but just gives an example that trend following is an example of an anomaly, but gives no juicy secrets away. He also said he had no models the first 2 years he traded, but was extremely successful which he thinks was luck.
     
    #20     Mar 19, 2019