brownsfan019

That's an interesting comment MM. And that's the beauty of trading - many ways to make money and even more to lose it in this business. To each his own.

Just an observation that some quants out there are struggling - and struggling mightily - is all. But I am referring to the ones that have to show their profits/losses and can't hide behind some talk or the internet. So that does not apply to all of them obviously.

Home-run = you score right away in baseball Single = you get to the first base but still have to go to 2nd, 3rd and home plate to score In trading getting that single for me just means taking a realistic profit when it's there and then try to do it again when the opportunity presents itself. I also think that if you are doing this for your living, then taking those singles is imperative. If you are doing this as a hobby or some other type of account (retirement as you mentioned) then you can swing for the fences and try to catch a multi-year bull or bear run for sure. But if you are trying to pay the bills and create some immediate income from this, those singles can add up nicely.

Shrinking ‘Quant’ Funds Struggle to Revive Boom WALL STREET, QUANTS, STOCKS. INVESTING, HEDGE FUNDS The New York Times They were revered as the brightest minds in finance, the “quants” who could outwit Wall Street with their Ph.D.’s and superfast computers. But after blundering through the financial panic, losing big in 2008 and lagging badly in 2009, these so-called quantitative investment managers no longer look like geniuses, and some investors have fallen out of love with them. The combined assets of quantitative funds specializing in United States stocks have plunged to $467 billion, from $1.2 trillion in 2007, a 61 percent decline, according to eVestment Alliance, a research firm. That drop reflects both bad investments and withdrawals by clients. The assets of a broader universe of quant hedge funds have dwindled by about $50 billion. One in four quant hedge funds has closed since 2007, according to Lipper Tass. “If you go back to early 2008, when Bear Stearns blew up, that’s when a lot of quant managers got blown out of the water,” said Neil Rue, a managing director with Pension Consulting Alliance in Portland, Ore. “For many, that was the beginning of the end,” he added. Wall Street’s rocket scientists have been written off before. When the hedge fund Long Term Capital Management nearly collapsed in 1998, for instance, some predicted that quants would never regain their former glory. But this latest setback is nonetheless a stinging comedown for the wizards of high finance. For a generation, managing a quant fund — and making millions or even billions for yourself — seemed to be the running dream in every math and physics department. String theory experts, computer scientists and nuclear physicists came down from their ivory towers to pursue their fortunes on Wall Street. Along the way, they turned investment management on its head, even as their critics asserted they deepened market collapses like the panic of 2008. Granted, Wall Street is not about to pull the plug on its computers. To the contrary. A technological arms race is under way to design financial software that can outwit and out-trade the most sophisticated computer systems on the planet. But the decline of quant fund assets nonetheless runs against what has been a powerful trend in finance. For a change, flesh-and-blood money managers are doing better than the machines. Much of the money that is flowing out of quant funds is flowing into funds managed by human beings, rather than computers. Terry Dennison, the United States director of investment consulting at Mercer, which advises pension funds and endowments, said the quants had disappointed many big investors. Despite their high-octane computer models — in fact, because of them — many quant funds failed to protect their investors from losses when the markets came unglued two years ago. And many managers who jumped into this field during good times plugged similar investment criteria into their models. In other words, the computers were making the same bets, and all won or lost in tandem. “They were all fishing in the same pond,” Mr. Dennison said. Quant funds are still struggling to explain what went wrong. Some blame personnel changes. Others complain that anxious clients withdrew so much money so quickly that the funds were forced to sell investments at a loss. Still others say their models simply failed to predict how the markets would react to near-catastrophic, once-in-a-lifetime financial events like the credit crisis and the collapse of Lehman Brothers. “It’s funny, but when quants do well, they all call themselves brilliant, but when things don’t go well, they whine and call it an anomalous market,” said Theodore Aronson, a quant fund manager in Philadelphia whose firm’s assets have dropped to $19 billion, from $31 billion in the spring of 2007. But Mr. Aronson, who has been using quantitative theories to invest since he was at Drexel Burnham Lambert in the 1970s, said investors would eventually return. “In the good years, the money rolled in, so I can’t really complain now about the cash flow going out,” Mr. Aronson said. “If somebody can give me proof that this is a horrible way to invest, then I’m going to get out of it and retire.” Still, some of the biggest names in the business are shrinking after years of breakneck growth. During the last 18 months, assets have fallen at quant funds managed by Intech Investment Management, a unit of the mutual fund company Janus; by the giant money management company Blackrock; and by Goldman Sachs Asset Management. Even quant legends like Jim Simons, the former code cracker who founded Renaissance Technologies, have seen better days. Mr. Simons was celebrated as the King of the Quants after his in-house fund, Medallion, posted an average return of nearly 39 percent a year, after fees, from 2000 to 2007. It was an astonishing run rivaling some of the greatest feats in investing history. But since then, investors have pulled money out of two Renaissance funds that Mr. Simons had opened during the quant boom. After losing 16 percent in 2008 and 5 percent in 2009, assets in the larger of the two funds have dropped to about $4 billion from $26 billion in 2007. (That fund is up about 6.8 percent this year, compared with a loss of about 3 percent marketwide.) In an effort to woo back investors, some quants are tweaking their computer models. Others are reworking them altogether. “I think it’s dangerous right now because a lot of quants are working on what I call regime-change models,” or strategies that can shift suddenly with the underlying currents in the market, said Margaret Stumpp, the chief investment officer at Quantitative Management Associates in Newark. The firm has $66 billion in assets under management, and its oldest large-cap fund has had only two down years — 2001 and 2009 — since opening in 1997. “It’s tantamount to throwing out the baby with the bathwater if you engage in wholesale changes to your approach,” Ms. Stumpp said. But many quants, particularly late arrivals, are hunting for something, anything, that will give them a new edge. Those who fail again may not survive this shakeout. “What we’re seeing is that not all quants are created equal,” said Maggie Ralbovsky, a managing director with Wilshire Associates, which gives investment advice to pension funds and endowments. This story originally appeared in the The New York Times

Update since last update: Software running as expected

Once I gave up trying to hit that homerun, my equity curve got much smoother. Yes, I routinely sell the HOD or buy the LOD in hindsight, but I also buy many 'fakes' at these levels where taking a modest profit does make money vs. swinging for the fences. I hate baseball, but it's great for analogies - I am trying to hit singles all day long over and over. A double could happen when I catch a lucky break on a big move while in a trade but more often than not just trying to get to first base and repeat process.

I did not re-read the terms but if you are the winner, pay the man! Winner winner chicken dinner! And therein lies the battle we have in trading IMO - sometimes you will nail the LOD or HOD and sit back and say - shoulda held all day long. Other days if you don't take what was available, you will sit back and say - what a retard I am. This is why I think trading is so difficult. There are 3 outcomes when you place a trade and 2 of them work against you: 1) Quick stop out (you were obviously wrong) 2) A 'winner' becomes a loser (you got greedy) 3) You book a profit (congrats) So much is made of stats and what not in this business but at 415pm EST the ONLY thing that matters is whether there is a inflow of $ to you or outflow of $ to others.

You can trade something that zips along like RIMM or you can trade slow and stead with GE- and everything in between (from stocks gapping, earnings plays, etc.). That's one issue w/ stocks - finding your basket to trade that day - which is why you may eventually move over to futures where the basket to choose from is much smaller and can give you better focus.

Wasn't there some prize or something for the winner at the end? You are obviously last man standing, so was just wondering if you collected your prize. here's the link about it.

Exactly - when things are moving quickly (usually due to news) or stocks gap overnight, your stop order says 1 thing to your broker - if price touches this level or goes past it, I want out and I want out at the prevailing market price. In a perfect setup that prevailing price is where you thought you'd get out, but not necessarily. You can always send a stop limit order which you dictate what terms you want to exit on however you can be left holding a large losing position if those parameters are not met.

Just thought it was interesting that the article mentioned the 50 day moving average. The broad-based S&P has traded around its 50-day moving average for the last four days after falling sharply last week following a bleak assessment of the economy from the U.S. Federal Reserve. The 50-day average is currently about 1,088. LINK

Who are you talking about Tams? And what proof of this do you have? Or just more random accusations on your part?

This was my issue with swing trading stocks - you can place your stop loss and assume it will fill there but you really have no idea if it will or not. It's important you understand the mechanics of how these work and how your broker handles them so you don't get caught off-guard. With that said, stops are the only thing that will save you when you are wrong, even if it executes further from where you expected. In daytrading you can assume for the most part that your stops will be honored where you place them if you are trading liquid instruments but position/swing trading is a different story esp in stocks.

Attila - I am an occasional lurker to your thread and I think it's great that really document the struggles in the day-to-day of this business. That is exactly what I was doing in the p/l threads and I can tell you that it does help long-term, even if you think no one else is gaining from this experience. And honestly it's not about anyone else so just keep doing your thing. BTW - have you won the ipad yet? I don't recall when that officially ends.

:rofl: I took a little breather from TL and looks like Pat just can't stop w/ the complaining and name calling. It's too bad he's been allowed to operate here for so long; whereas the 'trash' at ET banned him fairly quickly.

Update since last update: Software running as expected Thought it'd be good to track the good days since a couple only want to focus on the occasional blip. Maybe we'll find that the software does run as expected the overwhelming majority of the time.

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8-3-10 Update: Software running as expected.

Do you use news, econ events, etc. in your trading? If yes, then you probably want to keep up on that stuff while you are not near your computer. If no, then it's a waste of money. For example, I use econ releases as a reason to avoid being in a trade but that's it. So all I need to know is when the big releases are coming out, which is easy enough. Now if I was basing my future trade decisions on these events, then I'd probably want to know what they were doing while I was away from my computer.

Great, let's meet up then and maybe we can bury the hatchet. PS Can you say STALKER... You really need to drop your man crush of me Tams. :doh:

Attila - I could not agree more. Having a plan of attack is only half the battle, the rest is between your ears as the saying goes. For example, I cut my day short today after I got comfortable / scared to take a loss. I had a good morning on the CL and decided to shut it down after a trade took awhile to play out (even though that was not part of the plan). About 10 mins later an easy HOD short showed up and I passed b/c of that fear your speak of. It was what I call an instant winner - no heat, straight to profit target; meanwhile I spent 30 mins in the previous trade only to get 10 ticks... So we are all there w/ you, even if not posting daily like you are. Putting together the plan AND then following it are 2 unique things that are not easy every day. Some days it's easier than others, you just have to fight your way through the mental battles as best as possible. Keep up the great work and I agree w/ Thales that we should be long Attila via the double bottom.

MM - Easier to just let thales explain as he is much more eloquent with words than I.... What is ironic is that Pat was banned from ET, but allowed to persist here. Think about what it takes to get banned from ET... With that said, I think a blog makes a ton of sense for you Thales - you can moderate the vulgarity out and if it gets popular you can monetize it for yourself.

1) You have a certain time period where you can do it yourself. After that, try the report post in the right corner and explain what you need done. 2) As far as I know, under the new admin you can post links to just about anywhere. I could be wrong. 3) Try the report post link for this as well.

Is there a reason you need to post things easily found on any economic calendar? You never add any substance to them (surprise) just copy and paste. Maybe change it up Tams and explain how you will be trading these events. I'm sure you got some indicator(s) over there that can aid in the trading of these events.

8-2-10 Update: Software running as expected.