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Ben Ban
posted Mar 24, 2015

Hi,

and first of thank you for this great community!
I have mainly three questions that are a bit general (maybe) and can be seen as newbie questions, but I would be very glad if I could get them answered.

1) Is it worth learning algorithmic investing with little capital? Since I live in Sweden and is a student, I don't sit on much capital (around 2000$). I'm not even sure if the algorithms here on Quantopian is applicable. Can I get advice on how to move forward if it's appropriate to start with this?

2) I'm a software engineering student, but also just started reading about the financial world, mostly started with Benjamin Graham's publications. Any more recommendations on how I can get more learning on the algorithmic part (For example, how can I learn about different investing systems that are applicable in Python) I've seen that there is a known course on Coursera, but the instructor doesn't seem to be active any more?
(This question is also somewhat related to my first question)

3) What's the downside of copying another algorithm here? I see that a lot of brilliant people have created amazing algorithms that are back-tested with a lot of success, how do I know that these will work? (This is a very bad formulated question, since nobody can predict the future) What I mean is that how can I know if another algorithm might be bad for me?

Sorry for the maybe inappropriate questions in this forums and thanks in forehand if someone could answer them!
Best regards,
Ben

4 responses
Ben Ban
Mar 25, 2015

No one that can answer this?

Blue Seahawk
Mar 25, 2015

Hi Ben,
Possibly some reading thru answers to other new folks with similar questions could have you rolling along fairly quickly?
https://www.google.com/#q=newbie+site:quantopian.com

In particular, notice that search uses site:quantopian.com to limit the results only to quantopian pages, you can use that pattern to zero-in on whatever you might be interested in next at any moment, hope that helps.

Grant Kiehne
Mar 25, 2015

Hello Ben,

At QuantCon, Quantopian announced that it is working on an arrangement with E-Trade to support smaller accounts:

https://twitter.com/marketcalls_/status/576788004892606464
https://twitter.com/quantopian/status/576788315153764352

The minimum balance number I heard was $500, but of course commissions are what really matter. On a percentage basis (e.g. total annual commissions divided by average portfolio value), will trading with $500 be the same as with $1M?

Regarding your $2000, you can do backtesting and simulated live trading without putting any money at risk, to get a feel for if you might be successful. I'd expect that you could run into problems with portfolio diversification and commissions (the commission model is customizable). Although, if you pick a few ETFs that already offer diversification, that problem could be solved. Then it's a matter of figuring out how frequently you can trade/re-allocate (probably weekly/monthly/quarterly makes sense with $2000). Just be aware that the market can do wild things, so a chunk of your money could evaporate!

Note that anyone can enter the contest, so if you get an algo running, just submit it for yucks!

Grant

Alisa Deychman
Mar 26, 2015

Hi Ben,

Welcome! To answer your questions,

  1. Absolutely, you can do a long-only strategy with low frequency trading to avoid transaction costs. Though the better route I would recommend is enter your strategy into the Quantopian Open. This is a paper trading competition with a monthly winner. If you win, you get to manage a $100,000 brokerage account for 6 months and keep all the profits. This would be a great experience to get your feet wet with algorithmic investing, learn the tools, and experiment in a safe environment.

  2. Check out these threads of good resources to learn more about finance and python:
    https://www.quantopian.com/posts/21-and-hungry-want-to-learn-as-much-as-possible
    https://www.quantopian.com/posts/help-with-basics-strategies
    https://www.quantopian.com/posts/new-to-quantopian-community
    https://www.quantopian.com/posts/beginner-where-to-start-learning-more

Also, here's a Quantopian tutorial series to learn the API, syntax, and coding logic.

  1. We encourage sharing, learning, and collaboration on the platform. I think it's great when people share an idea and the community works together to iterate and improve the code. I've seen a lot of great discussions in those threads. The downside of simply cloning an algorithm in the forums? None. You see a code template, tweak the parameters, and add your own ideas. I would caution against live trading something found in the forums unless you fully understand the code mechanism.

If you want some strategies to start exploring, check out the sample algorithms: https://www.quantopian.com/help#sample-algos

And here is a blog post sharing the top 25 most popular strategies on the platform (from Feb 2014): http://blog.quantopian.com/5-basic-quant-strategies-implemented-by-the-quantopian-community/

Enjoy your exploration!

Alisa

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by Quantopian.

In addition, the material offers no opinion with respect to the suitability of any security or specific investment. No information contained herein should be regarded as a suggestion to engage in or refrain from any investment-related course of action as none of Quantopian nor any of its affiliates is undertaking to provide investment advice, act as an adviser to any plan or entity subject to the Employee Retirement Income Security Act of 1974, as amended, individual retirement account or individual retirement annuity, or give advice in a fiduciary capacity with respect to the materials presented herein. If you are an individual retirement or other investor, contact your financial advisor or other fiduciary unrelated to Quantopian about whether any given investment idea, strategy, product or service described herein may be appropriate for your circumstances. All investments involve risk, including loss of principal. Quantopian makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.