I work for a quantitative hedge fund. I program computers to trade securities for a living. On any given day, code that I have written trades hundreds of millions of dollars worth of stock, futures and options.
I feel very confident in saying that for 99.9% of people, using this service will be a terrible, terrible idea that will only cost them money in the long run.
If you want to get into the stock market, buy a low-cost index fund and hold it for the next twenty years. That's the best advice I can give you.
This service is purposefully targeting people who know next to nothing about the stock market, and making them feel like they have some sort of clever control of the outcome of their investments.
I have criticised this idea elsewhere in the thread so this will be my last post on it. I hope all HN folk reading this thread will look into it and discover how parasitical this sort of venture is.
it's a free country and people are free to trade however they want (with restrictions haha).
they just need to be aware that retail traders are not going to get the same kind of competitive advantages that the big boys like Citadel or GETCO have.
it's not a "rigged" game in the same way Walmart being able to buy wholesale apples cheap and flip it to us richer is not a "rigged" game.
You are correct, if people want to risk their money then that is their right (providing they have been supplied all the legal warnings designed to protect people from losing money in a game they don't understand).
This service is the equivalent of putting an amateur chess player in front of Kasparov and suggesting they bet real money on winning because you taught them a basic opening move.
i don't think this company is suggesting anything of that kind, because this myth has been perpetuated since the start of retail financial markets, and possibly both the brokerages and other retail investors are to blame for this.
everyone in this thread here seems to have the common sense to say "don't try to compete in the same strategies as the HFT specialists". that's absolutely true.
but then this idea that financial markets cannot be anything else other than a HFT's playground doesn't seem to go away, even in this thread. that's not a fair assessment.
if you are a retail investor, if you pick a portfolio allocation appropriate to your risk appetite, if you pick a reallocation and reinvestment policy that you can get a good handle on, and you stick to it without fail, then you are half of the way to what pensions/insurances/savings plans implement for you, except now you don't pay fees, and you don't have to wait 20 years for the investment to "mature". in fact, because retail fees are so high, retail investors are better off using a minimal rebalancing policy: trading less, tweaking less, getting less fidgety about their trades - and that is a good thing. trading less and getting better returns usually comes together.
if you are happy with more risk, and you take controlled bets with options structures going out several weeks or a few months, you can get away with some good wins and a hopefully fewer losses and may still come out ok even after spreads/fees.
if you try to compete with HFTs on the sub second horizon without any of the equipment/services that the HFTs pay for, then you will lose. don't do that, that space is not for you.
I agree. How can joe average compete with the resources of hedge funds which are doing the same thing at a much lower latency using more sophisticated mathematical methods, at a higher volume (so lower relative fees).
I am sure the idea is well intentioned but really it is just suckering people out of money in a similar way to forex robots etc.
It's not about outperforming those hedge funds, I think that is out of scope. They're not competing.
It's that average people (or anyone) can't time the market etc. so nevermind any advantages a quant firm might have, the rules that average person sets up with their IFTTT will be horrifically unwise.
I was thinking the same thing. Traders already play games with amature's stop-loss orders, etc... This just looks like a tool that unsavy investors will get themselves taken to the cleaners by professional traders.
There are many people who trade the market based on charts. Because the charts are well known, traders know what the sell signal is for a specific security. So, they will sell that security below the trigger so that all the suckers ... um ... people using IFTTT for the stock market will automatically sell the security. This will tank the stock presenting the pro trade with a buying opportunity.
I've actually made a couple of small killings in the last few years. I had one bomb (lost 20%) and even though I'm still up really well, I'm moving everything to index funds because that one loss eats at me.
I feel very confident in saying that for 99.9% of people, using this service will be a terrible, terrible idea that will only cost them money in the long run.
If you want to get into the stock market, buy a low-cost index fund and hold it for the next twenty years. That's the best advice I can give you.