By the time one masters the (financial) universe, the universe changes.

Which part of finance universe did you manage to tame? And how do you define and measure your level of mastery?

It took me about 6 months to create a trading system that generates better returns than the average investment strategy, is that good or bad by your standards?

Hmm I don't know about mastering a section but with a 2 man team you can build a fully automated strategy which has a strong academic background in about 6 - 18 months.

Given:

>Your team has the relevant skills & experience.

>You are building a strategy that is already well documented and researched: Example - A dual Momentum, Equities model

> Already have the infrastructure: Bloomberg terminal and data feeds

However I'm sure that if your building one that doesn't have roots in academia then I'm sure it can take dramatically longer, depending on the scope.

It has taken me about 2 calendar years and approx 5 man years to come up with a Forex strategy which looks like working. It consists of a trading 'system' and the all important algorithm(s) for identifying trading opportunities.

Mind you, this is hardly a small part of the universe.

2 years working alone day and night and no weekend or vacation. sleep only when needed. all time spent as much as possible in analyzing the market (FX spot) and trying out various ideas till reaching a point to have a valid working system.

How can you master something constantly changing ??? What does it constantly runs algorithm and has live feed ? Whatever it is. That's pretty amazing. Fill me in.

There are ways to master the changes too by making them part of the universe.

Anything static is a risk.

Ulrich - please tell me that this is not the same system that you used to recommend shorting GPRO on the morning of 9/30 when GPRO opened at around 94.60?

https://www.linkedin.com/grp/post/1813979-5922624220239523844?goback=%2Egna_1813979

Please use your new system to update your GPRO recommendation. My system suggests opening a short position at 66.25 You agree?

Our equity research product took 10 years to tune in order to monetize. We have since been running it for 9 years without changing the methodology. We would only add to the process with rigorous back testing and only if our accuracy rate were to increase. MarketDNA is our product.

That's pretty good Ulrich. It took me about 20 years to master my emotions when it came to trading/investing. I consider that a "small part of the financial universe". But even that I am not 100% certain of. Ask me when I experience my next significant draw-down if I've held on to that mastery!

Ulrich: It me 3.5 years to develop and code the strategy that we apply today. Prior to starting off I had beein thinking about and trading a certain number of ideas which gave rise to this automated strategy later. However I would not say that I have mastered anything; at my shop research&development is an ongoing proecss. What we came up with is a very complete picutre of a certain family of price patterns and the position management process for them.

It is generally accepted that it takes 10 years to master the markets, 10 years learning, 10 years making money and then 10 years easing back to being an investor. This was the case even for the legends of the game.

Go on the Web and look for "RIX Index"

In SuperDerivatives it took us few years.(Less than five years..)

From my experience, 10.5 years is much time to complete a product. During developing, every 2-3 yeas we have to face a major advances (changes) in programming and databases that you need to update. Additionally, we must take into account that market is changing. Generally, (not in finance) including all type of software products, projects with significant delays have high probabilities to fail.

I could understand that you have completed the first version of your product in 3 years and then you make various improvements / additions until you finalize/reach a great product (in a range of 10 or more years) that it can beat the market.

About 8 years to get the totally automated adaptive version, team of 3 to 5 people full time (not counting outsourced coders). The learning curve seems to be logistic like. I agree with Nikitas that every 2-3 years one has to change a number of components of the system. Welcome to my Forex Trading Algorithm....

Nikitas & Piotr - at some point you have to stop changing and adjusting otherwise all you are doing is statistically allowing randomness into your model for past history. Especially if you are running a model for 10 years and changing every 2 to 3 years then in the 10th year of a model, your first 2 to 5 years are random with statistical uncertainty.

Matthew, first I referred to the software engineering point of view. I did not speak about the algorithm of your model. I mean that it is very important to complete the first version of the model/product that is working in short period of time. The algorithm/model should adjust to market conditions

when do you consider that you "master a market" ? 3 years of positive returns ? 5 years ? ....

We run a few models (that are not optimized over the years - I agree with Matthew Rossi on this)) and each model comes from an "idea" or a "conviction" of how markets may behave. From the idea to building the first testable framework, it usually takes a few days because we do not believe things have to be complicated. The more variables you build in, the higher your optimization risk and the higher the chances of failure within a relatively short time span (6 months, 1 year) because markets often behave randomly.

it took me 5 years to build the Iastra Global Broadcasting Platform but now i have it done and it is a one of a kind masterpiece that does everything that youtube does, that facebook does and that Netflixs does.

and i just sold it to a company we are taking public for $1.3 billion.

if you want to converse with me about it or need some help with something your working on fell free to contact me directly, love to collaborate and help you in any way i can

I don't know who has the patience to wait for 10 years for a project to complete.. Our experience + the companies who we know have spent on average 2-3 years to come up with a complete functionning solution. Although research is of course a never ending ongoing process at any systematic HF

Fully agree with Kirill. The R&D is continuous process for improving and extending the features/performance of your initial product.

Interesting question. We have also been involved with developing our own system as part of our research. The bottleneck is not whether one has managed to put together a "functioning system", the the concern is rather whether one has successfully been able to design and implement a system to meet strict risk management criterion. With the ever increasing complexity of the financial trading environment, it's only prudent, in my view, to assume that one is never going to be able to optimise one's system given the nondeterministic nature of the search space. That leaves the developer with the dilemma of when to deploy his system.

You never "master" the market, we are all eternal students of it. With that being said, 10.5 years seems a lot for a strategy development. Need to find smarter ppl to work for you.

10.5 years seems a bit too much for algo/strategy development. It took us about 3 years (team of two: quant trader + PhD in Physics). Word of advice, markets are constantly evolving, make sure your algo is dynamic/adaptive enough to adjust to new conditions.

There's no such thing as "mastering" the market. Our success rate is over 80% and still don't consider we've "mastered" anything. We learn new things every day and probably we'll never stop learning. With that being said.. 10.5 years does seem a bit too much for a strategy/algo develpment.

It took us about 3 years (two ppl, quant trader + PhD in Physics) and it's still being updated on a constant bases. Word of advice, markets are constantly evolving, try to keep your algo as dynamic/adaptive as possible.

Having said so much about the lengthy development, I am wondering if the fellow members would mind outlining their trading methodology ?

Lol I apologize for the repetitive comments, aparently those "error" messages I got every time I tried to post were wrong.

I issued my last NYSE Sell Signal on 7-24-15 and I am Ranked 4th on Timer Digest Top Ten Timers List. How am I doing?? Jim Rohrbach, RIA

Jim where can I send those signals? I sent one yesterday (Sunday night before US Mkt Open) calling the end of the correction to Bloomberg, MarkeWatch, etc but nobody paid much attention. I have a twitter account for fun, you can check the calls for yourself. @myquantbuddy

Adrian, why the urge to post predicitons, if your systems works for you and your team?

Why does Soros, Ackman and all the market "gurus" post theirs? That's a question I believe doesn't need to be answered

Adrain, because they are manipulators! There is a big difference. They need "the masses" to step in so they can cash out.

Ok, I don't share that point of view with you but I respect your opinion. Let's just say I want to level the playing field for others. It's certaintly not easy to play the markets these days and ppl need help (real help, not some bs paid subscription service). I obviously won't share my methodology but I'm willing to give advice to those who are willing to listen.

@Matthew Rossi & Marc Verleysen - All depends on what you change over the period of time, I am afraid. As long as my system gives good results, and tends to improve after some modifications over the years I am quite happy about it. Old system becomes a benchmark to the new one and so on - I don't see anything wrong about changes, improvements, evolution....climbing the learning curve in general.

The randomness you refer to might become more of an issue if you are basically fitting your system to historical time series... what is not the right way to do it in my view.

Apart from that I was rather having on my mind changes to third party software environment (databases, connectors, protocols....) in my earlier comment.

Hi Piotr, I have no issue with people changing (=improving) their system/model. That may well be justified for whatever reason (e.g. new technological development allowing a more complex formula). As long as you are not trading live or sending out marketing reports, there is nothing wrong with improving it. However, once you are past this stage and have started trading (live or papertrading), you should mention if and when changes to the strategy were implemented. If not, you are misrepresenting what investors could have made if they wold have invested with you in the past.

My system has taken 6 years. I came from the pit and try to replicate it. 2+2 does equal 4 for linear types but it comes back so deep I find this part of the market algo is the hook. The hook is important because it creates the spike bottom, spu's yest 1842 buy, tonight into wed.s 1845 & 42. Its long term. Bonds did it to the sell yest, rbob is a beautiful pattern just about exhausted to downside and approaching my signal buy.

I have found you need ambiguity to limit the false positives in my case. I have always been short/day/term and I have only focused on the risk side, not profits, just risk is my key. The rest will take care of itself. This happens across the time spectrum but I have no order as data science team required.

I like 3 or 7 tick risk shots if you will. I don't want to trade all the time. Before we hit my number chaos rears its head, like yesterday down 1000 opening. Level was hit at 836am so after print low open went lower for 6 minutes. It is after when we get the consecutive which is key to how markets run.

Maybe this is off topic.

The development of my "system" took 32 months, with no prior trading experience, and I did it by myself. My target to close out the GPRO short is 31.75, but if there is one thing that I have learned in this line of work, it is not being greedy - either at the beginning or at the end of the tail.

Having said that, I can't claim to be a master of any parts of the finance universe. My primary goal is to be sure that I do not let any parts of the finance universe master me or take a bite out of my tail.