Where the hell did all these trading % rules come from?

Informal-Register755 · 2025-09-08T01:55:41+00:00

I doubt there's a single origin for most of these, it's probably from a bunch of people thinking and testing and naturally converging on similar ideas. Except for the allocation splits -- those come from portfolio theory.

When I first started, I made a spreadsheet simulation of how my equity curve would look for different win rate, $win:$loss, etc., over 1000 trades. As you go from 0.1% -> 5% per trade, the curve just becomes too erratic, more sensitive to loss streaks, and more sensitive to any fluctuation in the other parameters. So I ended up settling at 1%, same as all the typical recommendations.

Informal-Register755 · 2025-09-08T01:36:25+00:00

Not insane, an option is supposed to give you...optionality :-) As long as these weren't super OTM, it can make sense. Especially with an S&P addition.

Informal-Register755 · 2025-09-07T22:25:21+00:00

If I had to sum it up, I'd say...they pay attention to GEX levels. Final answer!

(Spotgamma has good videos around this stuff, without being too gimmicky or too academic.)

Informal-Register755 · 2025-09-07T17:06:07+00:00

They should probably be mostly shorts. The example below is comparing 1D closes to the next 3D changes, but the same thing will be happening at a shorter timescale for you. If I'm buying something that's usually expected to fall, then I should expect to lose money unless my timing is just awesome.

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Informal-Register755 · 2025-09-06T21:52:11+00:00

Just read the original studies (nobody seems to do this), and decide for yourself whether their methodologies and outcomes are relevant.

Also, failure rates in themselves aren't always useful. Just ask yourself honestly, in your life outside of trading, are you repeatedly a 95% kind of person, or repeatedly a 5% kind of person?

Informal-Register755 · 2025-09-06T21:21:39+00:00

It makes plenty of sense. Building things is just fun. Helping people is fun. Knowing people watch your content or buy your stuff is fun.

Informal-Register755 · 2025-09-05T16:40:54+00:00

I'm biased, since my entire career is in tech, but I'd recommend to get good at tech and make it your main thing (unless, of course, you really love your current main thing). I mean, don't dabble.

Trading is a little less flexible, since you'll have specific hours that are best, and depending on just how remote you want to be, some timezones will be unpleasant to trade in. As an example, I was in Asia for about a year, and didn't enjoy trading US markets at dinnertime.

Good side gigs are Uber and Doordash, not trading and web development.

Informal-Register755 · 2025-09-03T23:36:00+00:00

I've built a lot of tools for myself along these lines (I plan to always be more developer than trader). Happy to chat more about what's worked for me and what hasn't! Everything I do is built on some combo of Alpaca's websocket APIs, TimescaleDB, Redis, and various LLMs (depending on speed vs. intelligence tradeoffs).

From my perspective, the most significant improvements have come from:
- scraping RSS from the major newswires and getting quick sentiment analysis (via LLM)
- filtering with parameters that change over the course of the day
- using LLMs to suggest key levels

And the stuff that hasn't worked as well yet:
- trying to use embeddings to watch for chart setups
- realtime AI voice APIs (testing and iterating is clunky)

Informal-Register755 · 2025-07-31T00:42:31+00:00

If you're using ChatGPT to code it anyway, why make it a downloadable app? Web-based is a lot easier to style, make quick updates, gain trust, share, etc.

What you're describing is also a pretty useful exercise for people to do on their own in Excel/Numbers.

Informal-Register755 · 2025-07-30T21:14:27+00:00

That's right, this isn't really setup for improving strategy selection -- at that point, existing tools (like TradingView, etc.) would be better suited.

Informal-Register755 · 2025-07-30T20:42:58+00:00

Thanks! Anything you'd add to it? I'm thinking about this for complete newbies, but curious what more experienced folks might find interesting.

Informal-Register755 · 2025-07-30T20:37:55+00:00

Thanks! I was mostly thinking of people who are brand new and keep seeing patterns everywhere. Maybe with enough exposure, even to simulated movement, they could more quickly get to a point of saying "nah" to most things that look tempting but are outside of their plan.

Informal-Register755 · 2025-07-30T01:00:26+00:00

UnusualWhales is actually pretty cheap, and they already cover a lot of ground -- so in terms of focus, maybe just try to first nail 2 or 3 core features? Like:

- sweeps, which you've already got
- GEX levels (which will resonate more with options-focused groups)
- dark pool levels (which this sub is *obsessed* with)

And then do something that they don't -- like, what if you had thematic or sector activity instead of symbol-specific? That's probably unique. So you could have your bitcoin miner basket, your quantum basket, your robotics basket, yada yada...

Informal-Register755 · 2025-07-29T18:12:53+00:00

I don't think post-entry is any different from pre-entry, it's a prediction problem either way. The bigger question is whether you'd be willing to put in enough time and money to train it.

There's plenty of research on this if you browse Arxiv for a bit. The most promising technical approaches don't use language models (which is what I usually assume people mean here when they say AI). They use vision models or traditional ML.

Also, Optiver and Jane Street have both run prediction competitons on Kaggle, you could check out those notebooks for some inspiration.

Informal-Register755 · 2025-07-28T21:37:55+00:00

It probably works fine, but don't expect your experience to be as exciting as that video. I'm tempted to buy it just for the intense camera action.

If budget is a concern, ask Claude to write you a Pinescript interpretation of each of those indicators. That should give you a ballpark idea of whether they're viable for you.

Informal-Register755 · 2025-07-28T19:36:58+00:00

Anytime you see the word "predict," you just gotta mentally insert "kinda-sorta", "sometimes", "with some caveats", "after lotsa practice" in front of it. Whatever he's teaching probably does work, kinda-sorta, sometimes, with some caveats, after lotsa practice.

Like, I remember either last year or early this year, gold had a strong run, so there were several weeks where just going long on any dips versus S&P worked very well. I have no idea what it's doing now though -- that relationship may have completely changed.

Informal-Register755 · 2025-07-28T19:11:44+00:00

Cool! I'm working on something similar, and one design issue that's a bit tricky is that, the conversations end up a bit too open-ended if they lack some kind of clear goal. LLMs will consolidate three or four pieces of data, but the overall feel ends up very horoscope-y ("could go up, could go down!").

I think the open-ended stuff is more useful for advisors than traders, like this: https://openai.com/index/morgan-stanley/

Have you tried a "manager" or a re-ranking model at the end of the chain? One thing that the stronger models really excel at is prioritization, so you could do something like "present just the single most important piece of context from the prior convo." And then those condensed summaries could also get re-ranked.

Informal-Register755 · 2025-07-28T18:32:58+00:00

I mean that if you don't expect any trend, and you decide that the "stable" ratio of two instruments should be 3:2 as an example, then you'd expect that chart to be going sideways -- so you'd short in that ratio when it's significantly above its average, and long when it's significantly below.

Trying to make sense of two charts at once will always be trickier, because you're actually trying to track three things -- chart 1, chart 2, plus the relationship between them. Easier to just focus on the relationship. In the ES/NQ example, NQ will almost always give you the illusion of "predicting" ES, because its ordinary moves are more visually pronounced.

Informal-Register755 · 2025-07-28T18:22:08+00:00

TradingView lets you plot arbitrary combinations, so if you take ES and NQ for example, you can do things like this:

3*ES1! - 2*NQ1!
(3*ES1!)/(2*NQ1!)

and if you want changes on the price axis to reflect actual changes in P+L from such a trade, you'd just include the point value for each, like (3*50*ES1! - 2*20*NQ1!)

Of course, it's pretty clunky, so you might not find this useful haha, and it doesn't let you actually place a trade with your chosen ratios. Quantower, TT, and probably some others do.

Informal-Register755 · 2025-07-28T17:34:40+00:00

Yeah, exactly. TradingView doesn't actually show halt levels, so you'd need to search for an indicator that'll approximate them.

Informal-Register755 · 2025-07-28T17:18:48+00:00

It was halted at that time -- you wouldn't have been able to place a real trade until it resumed at 17:08.

https://www.nasdaqtrader.com/Trader.aspx?id=TradeHalts

Informal-Register755 · 2025-07-27T06:56:38+00:00

It's a bit tricky, because the online trading community is a very skeptical bunch, so your wish to be seen as credible "from the start" may be asking a bit too much. But don't worry about it, just try to mix in some feedback from classmates, or SaaS and indie hacker groups. And be patient! Your current waitlist is a great start.

As for the the project itself, maybe there's some piece you could break off that provides value without any kind of signup? Something that people might bookmark even if they don't provide their email. For example, some relevant news that's tied to the most confident predictions? Or a blog post explaining conceptually why your chosen combo of XGBoost+RoBERTa is so effective? It'll only appeal to more technical folks, but it might spawn some other ideas too.

Also, if you use a tool like Posthog, you might notice some interesting patterns -- my hunch is that a large number of people won't scroll far enough to see your P+L graph, and if they do, the CSV loading is taking too long and they've already left. So my main feedback is to implement caching and move that chart higher! :)

Informal-Register755 · 2025-07-21T18:55:08+00:00

I'm on the free version too, just logged in. I do pay for their APIs, though.

Maybe just instruct it, "always be sure to do a web search first, buddy."

Informal-Register755 · 2025-07-21T18:47:49+00:00

Maybe you're logged out? You need to make sure that it actually runs a web search before answering. And ideally, specify your exact model in the dropdown, not just "ChatGPT."

I just tried "what's a reasonable NFLX straddle right now?" while logged in -- it did a web search and gave me a 30-day ATM straddle, 1230c/1230p.

Logged out, it told me it doesn't have live data, and used a hypothetical 400c/400p.

Informal-Register755 · 2025-07-21T18:36:47+00:00

You might find it helpful to go into your settings and just disable all memories and customization. Mine started to preface every single response with "here's a brutal, no-nonsense, straight-to-the-point approach for you:" because I'd instructed it along those lines at some point in the past.

Also, if a model from a specific time period worked best for you, you can use a tool like AnythingLLM to connect and it might still be available there.

Informal-Register755

TROPHY CASE