[benreesman]

I never traded consistently and successfully but I did do a startup with a seasoned quant trader with the ambition of using bigger models to generate novel alpha. We mopped the floor with the academics who publish but that is whiffle ball compared to a real prop outfit that lasts.

Not having made it big myself I obviously don’t know the meta these days, but last I had any inside baseball, the non-stationarity and friction just kill you on trying to get fancy as opposed to just nailing it on the fundamentals.

Extreme execution quality is a game, people make money in both traditional liquidity provision and agency execution by being fast as hell and managing risk well.

Individual signals that are individually somewhat mundane but composed well via straightforward linear-ish regressions is a game: people get (ever decaying) alpha out of bright ideas (and rotate new signals in).

And I’m sure that LLMs have started playing a role, there’s a legitimate capability increase in spite of the dubious production-worthiness.

But as a blind wager, I bet prop trading is about what it was 5 years ago on better gear: elite execution (no pun intended) on known-good ways to generate alpha.

[arathis]

I think I understood 7 words you just said mister

[aleksiy123]

I think what he is saying is.

1. Your automated system should be as fast as possible.

2. Stick with known, basic fundamental strategies.

3. Try new ideas around how to give those same strategies more predictive power (signal).

#1 is straight technical execution.

#3 is constantly evolving.

Is how I understood this.

And as sort of an afterthought I guess the better you are at #1 the less good you need to be at #3 and the worse you are at #1 the better you need to be at #3?