It's definitely more difficult. Let me give you an example.
I'm currently running an algo that is giving me returns of about 25-30%/year. I do this as a hobby - I don't generally devote more than 10 hours/week to this. Why doesn't NY just give me their money? Why aren't I the greatest investor ever?
The answer is that my algo consists of watching the market and picking off liquidity from the top of the book (typically < 500 shares) when things get unbalanced. Then I passively (for the most part) close my positions a couple of weeks later, very rarely taking liquidity.
I made $2k last year on approx $10k in the market. If I put $20k into the strategy I'd be losing money by taking liquidity from deeper in the book. I.e., buying 500 shares might cost me $10/share but buying 1000 shares might cost me $10.10/share. I'd lose another $0.10 closing my positions, and shaving off $0.20 in profit per trade would kill my profits.
If I were investing 5-10x as much, phrases like "very rarely taking liquidity" would not even be possible - I'd have to take liquidity and I'd then lose the spread as well. And if I were investing 100x as much, I'd be moving the market and losing even more.
I also earn a bit more than $2k on other strategies. I was just describing my highest return strategy and explaining why it can't scale for the sake of discussion.
The real benefit of trading, and why I encourage most quant devs to do it even if they lose money is that it is great mental exercise. When you make mathematical or rationality errors, the market punishes you by taking your money. That's my real reason for actively trading.
I'm currently running an algo that is giving me returns of about 25-30%/year. I do this as a hobby - I don't generally devote more than 10 hours/week to this. Why doesn't NY just give me their money? Why aren't I the greatest investor ever?
The answer is that my algo consists of watching the market and picking off liquidity from the top of the book (typically < 500 shares) when things get unbalanced. Then I passively (for the most part) close my positions a couple of weeks later, very rarely taking liquidity.
I made $2k last year on approx $10k in the market. If I put $20k into the strategy I'd be losing money by taking liquidity from deeper in the book. I.e., buying 500 shares might cost me $10/share but buying 1000 shares might cost me $10.10/share. I'd lose another $0.10 closing my positions, and shaving off $0.20 in profit per trade would kill my profits.
If I were investing 5-10x as much, phrases like "very rarely taking liquidity" would not even be possible - I'd have to take liquidity and I'd then lose the spread as well. And if I were investing 100x as much, I'd be moving the market and losing even more.