Algorithmic Trading

For Ray Dalio, a Year of Losses, Withdrawals and Uneasy Staff

When algorithms fail.


Ray Dalio hedge fund is an investment firm, not a trading firm. They may use software, but the failure to grow is their own failure.

See another case, Pension fund scrapped the hedge, luckily escaped the crash.

Hedge for billion fund is a kind of insurance. Big billion funds are forced to follow investment (by virtue of big money), but not trading.

All available/claimed working or publicly available are not so great. See here the scam kind of claim.

Almost all successfully working algorithms are kept secret, no one really know. Only few funds like Medallion uses algorithm for trading, which is highly secret. There is no incentive for them to share.

Most sophisticated options players/traders in the world – the Susquehannas and Citadel Securities – are extremely focused on this flow and predicting it in real-time. These are HFTs. There are 10 Top HFTs and they are mostly dealers (they buy stocks from broker’s feed and sell it to third party).

Most HFT “algorithms” are just trying to front-run other trades. Total intellectual waste.

HFTs are dealers, just buy/sell from us, mainly used for liquidity market. They just function like auction houses, make money on spreads.

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Jim Cramer said your algorithm trading is causing today’s ATH in indices.

He said that many index funds still didn’t own enough TSLA and are forced to keep buying when TSLA rises (because of RHers) - positive feedback.

All HFTs are using lot of algorithms, very complex, high power computations, this has been going on many years, more than a decade. Rhers are part of the game, but big banks/funds (wallstreet) is still holding the centers.

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There are 2 separate things that happen:

  1. HFT firms pay for the order flow and front run orders. It’s bad to not use limit orders, because they’ll front run your order and make you pay more.

  2. There are actual algo’s that trade based on inputs. They’re doing stuff like measuring company mentions on Twitter and assigning sentiment. That stuff is using sophisticated ML.


Where do you more “advanced” traders get your data to make those EWT charts? @Jil where do you get your data to create and feed your algorithm? I am googling but overwhelmed with what is out there…

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I do it the dumb way. Very tedious. There are EW software on the market - didn’t buy those. May be I should. Anyhoo, didn’t do any research on which one is better, just note that they exist from YouTube videos.

Chart: QQQ | SharpCharts |

Use screen capture and Preview (Mac) to draw manually.



First, I have not made any EWT chart using my data yet, but keep on trying it. Googling won’t get you any reliable algorithms.

Easiest is just follow he makes plenty using

Simple way is just download excel data (using browser) from yahoo finance, it gives daily close price and you can prepare the EWT using excel

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this is really helpful. thanks!

Oh I forgot. The use of daily and weekly charts from stock charts are not good for day and swing trading… I use them for a big picture view. Long ago, I use them to position trade (multi-month) / short-term investing (over 1 year), mostly long LEAPS calls… manage to grow from $100k to ~$1.5M (not joking) over a few years. After that, I liquidate to buy rentals and stop trading for awhile… restarting in 2017 with $50k :hugs:, initially mostly trading shares and from June last year trying out swing trading (multi-week), and the charts I use are minute to hourly charts by ToS (Think or Swim).

Btw, I find swing trading is tiresome. Considering moving back to position trading and short-term investing. For this, EWT is not good enough, need to examine financial performance and reasonable understanding of the business fundamentals.


this is great advice, thank you! I am mostly just starting to learn, and wanted to formalize it as a hobby, since I spend most of my free time reading about the markets anyway for -fun. Between work and kids, I don’t have the time to do much but i find it all very entertaining and interesting. My core stuff is buy and hold and for retirement. hoping to just play with ~30-50k as fun money.

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@Jil & @hanera my motivators :slight_smile:

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@mcp @girlykick @Jil

When a stock is in Cycle Degree (multi-year) wave III is the best time to long LEAPS call e.g.

Both wave I and V are risky because they can be shorter than 1 year. For wave III, can easily get 10x from start of wave III to end of wave III. I have glanced through many stocks, almost every stocks are in wave V… not good… can’t trade LEAPS calls and the next down wave is multi-year long. Frankly, staying in wave V is high risk, if insist, only can day and swing trade because can come down BIG anytime, if get caught, you have to decide to hold the bags for multi-year or cut loss and wait for a few years.

Why LEAPS? Because pay capital gain tax of 15-20% for holding longer than 1 year vs day/ swing/ position trading that need to pay marginal personal income tax… ofc is ok if you pay less than 15% income tax :slight_smile: or trading in tax sheltered account.


So can we expect many stocks to enter wave 3 around March-April if my understanding of EWT is right?

Many stocks? Which stocks are you looking at. Most stocks are like TSLA, already in wave 5.

Chart dated Jan 12… seems to have completed wave III.5 during AH… After losing all my MRNA stocks, no urgency for me to go into detailed analysis :slight_smile:

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Since you mentioned almost every stocks are in wave V, I said many stocks. Just reiterating the same. Btw I am looking at TSLA.

TSLA is about to complete (or completed) wave III.5… didn’t bother to do any detailed analysis… again posted an outdated chart.

Both TSLA and MRNA seem to have completed wave III so… still got wave V :slight_smile: to go… guess keep monitoring for a few months if want to position trade (multi-month), day/swing trades can always be done regardless of waves.

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