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[return to "We gave 5 LLMs $100K to trade stocks for 8 months"]
1. naet+97[view] [source] 2025-12-04 23:47:53
>>cheese+(OP)
I used to work for a brokerage API geared at algorithmic traders and in my experience anecdotal experience many strategies seem to work well when back-tested on paper but for various reasons can end up flopping when actually executed in the real market. Even testing a strategy in real time paper trading can end up differently than testing on the actual market where other parties are also viewing your trades and making their own responses. The post did list some potential disadvantages of backtesting, so they clearly aren't totally in the dark on it.

Deepseek did not sell anything, but did well with holding a lot of tech stocks. I think that can be a bit of a risky strategy with everything in one sector, but it has been a successful one recently so not surprising that it performed well. Seems like they only get to "trade" once per day, near the market close, so it's not really a real time ingesting of data and making decisions based on that.

What would really be interesting is if one of the LLMs switched their strategy to another sector at an appropriate time. Very hard to do but very impressive if done correctly. I didn't see that anywhere but I also didn't look deeply at every single trade.

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2. chroma+Uy[view] [source] 2025-12-05 03:45:59
>>naet+97
>but for various reasons can end up flopping when actually executed in the real market.

1. Your order can legally be “front run” by the lead or designated market maker who receives priority trade matching, bypassing the normal FIFO queue. Not all exchanges do this.

2. Market impact. Other participants will cancel their order, or increase their order size, based on your new order. And yes, the algos do care about your little 1 lot order.

Also if you improve the price (“fill the gap”), your single 1 qty order can cause 100 other people to follow you. This does not happen in paper trading.

Source: HFT quant

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3. Maxata+3d2[view] [source] 2025-12-05 15:56:24
>>chroma+Uy
>Your order can legally be “front run” by the lead or designated market maker who receives priority trade matching, bypassing the normal FIFO queue. Not all exchanges do this.

Unless you're thinking of some obscure exchange in a tiny market, this is just untrue in the U.S., Europe, Canada, and APAC. There are no exchanges where market makers get any kind of priority to bypass the FIFO queue.

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4. johnni+f95[view] [source] 2025-12-06 15:57:33
>>Maxata+3d2
Anyone can be a market maker on a trade just take the other side of an offer. All they really do is make a market with you and then make a market with the other side and pocket the change. It's good for market liquidity.
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