SIUYA

Ingot - i dont know if you can see this due to your location. It might give a slightly different perspective on the US system that is bigger than Mr B. (rightly or wrongly I have my own views) BBC iPlayer - Why Poverty?: Park Avenue - Money, Power and the American Dream

i dont use options in FX - but have been thinking i might for a while. A friend uses them to get some rather large positions for set losses that he can handle based on scenarios. As i understand it he actually asks his broker (and so its probably not applicable to most retail guys) for a price in an option whereby he quoates the underlying, qty, level, and expiry. For this he gets a price. eg; lets say he wants to get a 1 week put option on the EURUSD for 10mil at 1.280 - this might cost him $x --- as far as he is concerned if the market breaks sharply lower in the next week he can make money. I dont know the exact machinations of it all but it makes sense if you can get a tailor made contract - perfect if you have longer term views. This has spurred me on to giving him a call in Australia - to say hello and ask him how he does it.

the scotch has not kicked in enough to either slur that much, nor start speaking like a Glaswegian.

Ingot - dont you think there is a 3x3 square starting from the bottom LHS.... but its probably all part of some dastardly trick from Tams..... or maybe a conspiracy from the Fed - shuffling around those matchsticks. google how many squares are in this picture for more fun and games.

I see 1 square but can also count 15 smaller squares --- (9x1x1)(5x2x2)(1x3x3)(1x4x4) plus 36 matches and 7 dead people and an image of Spongebob square pants.

might be worth you looking at bollinger bands for some sort of compression....they are not my cup of tea but i hear they have some use.

given john w henry just closed his fund due to dwindling assets and returns, maybe people can predict the future!

LOL.... Oh.....silly me - trading should be incorporated into the daily household 'entertainment' budget Agree - NSW in Australia once had 25% of the worlds pokie (one arm bandits) machines, they were designed to keep even more money than the casinos and offered no extra perks - but people still played them. Its like the odds of death - car v plane etc. At least in trading you have the chance of making money if you follow the checklist of what to do.

I have to agree with the basis of the original post..... It then does make you wonder why when the often quoted 90-95% failure rate which is seemingly bounded in reality and fact from brokers accounts does not persuade people to not even start in the first place - or at least ensure they have done the necessary ground work before committing too much money.(because giving things a go should still be encouraged)

This is one of the key issues - but here in lies a lot of context.....not all patterns are the same, and often if you are too selective costs and slippage will kill you. A breakout from a range to the upside is not the same when a market is in a downtrend, an uptrend, a range, at the end of a trend, middle, just before an economic release, just after a big spike, (and then how do you define this). A lot then has to do with measuring losses v how much you expect to get out of it. The one thing that keeps repeating itself for me and it appears others (apologies if name against ideas is general) is context - it might be because of momentum, hinges, cycles, elliot, DeMark ( - who i also like but am not an avid user - for Suntrader and i got that article off a trend following site ), Heavy Metal (thanks Mitsubishi), MA, no charts, support and resistance, a trend line, swings, pullbacks, wide range bars, correlations, news items, long term trend.....etc etc. One thing that you might have to do - and this is slow, tedious and most often not done properly - is test the pattern by hand. Its easy to get a computer to test certain patterns - but how do you get it to test patterns in context. Is a MA cross over valid to the downside, when the market is in a big uptrend and has just pulled back but not yet made a lower high, or had some consolidation. Now maybe this goes back to the heart of defining TA etc.and getting something that works for you.....even if you dont take every trade. (Are you better taking trades selectively if it improves your bank account as opposed to being a purist and taking every trade but loosing money?) I also dont think because of context that each pattern is exactly the same - the setup might differ, the ultimate trigger might be the same, but the possibilities differ a lot - something beyond most our our computing skills maybe. When do you know when to chase, when not to chase, when to wait, or panic. etc; etc. Plus if you chase, do you cut quickly or take profits because you managed to catch a move that happened super quick....all of this is hard to test.

i am with Zdo - often all the back testing in the world may give you confidence to trade, but you still need courage to actually do it. Then you probably through trading build that confidence. the whole recognising overconfidence - well, thats a matter of self development really For some its different. For me, its when i think i can pluck the eyes out of the market and capture every little tick - sometimes it works, but i also recognise that once i start doing it, it will bite me on the butt. Thats my warning sign. A mate of mine used to stand up, pump both fists in the air usually with an expletive, when he was winning big.....after a while we developed a rule - when he did that, we had to convince him to exit his position - it usually worked. when you think about it, a lot of the problems might arise from false confidence more than over or under. that idea that you can outwit the market, you know best, you have control. It usually results in over trading, revenge trading blah blah......and why ---- probably because you have not done enough work either on plan, or self development to be truely confident that things are right to go. If you then dont have the courage to pull the trigger at some stage, you will probably keep planning and not doing. Random thought - maybe condfidence in trading is irrelevant - maybe all good trading gves you is confidence in other parts of your life. or v v. (They are finding happy people are more likely to be richer rather than money making you happy)

it is a bit camp.... there was this band in Oz called rogue traders... Rogue Traders - Wikipedia, the free encyclopedia catchy but crap. There is a massive difference between a rogue trader and a rogue manager. if you asked me i would take manager any day - usually no jail time, but still plenty of cash.

recognising overconfidence

Mit you forgot.... The star manager - the one who made a lot of money letting rouge traders go crazy under their watch, taking the credit, qudos and money, until it blows up. Then they blame the risk managers, traders and others and either resign and get paid out again (taking one for the bank) or somehow manage to get promoted elsewhere to avoid embarrassment.

well put - Every time WB is used as a basis for why TA does not work, you could probably find plenty of FA losers as well.......the man is the best at what he does - he is also not a retail punter. Even WB says price is everything - - its just a horizontal line - everything for this stock below this price is cheap - above its expensive. he uses TA !! IMGHO Accounting is more voodoo than TA This argument will go on and on and on and on by smarter and dumber people than us.......... if a placbo works and cures you, great, if steroids gets you 7 yellow jerseys and you dont care about the results but it works for you then great if a forum passes the time during the day and its all BS but you enjoy it then great. if TA works for you but not for others and they think its voodoo because it cant be proved beyond doubt then so what. If it could be proved beyond doubt - then is it not the elusive holy grail that does not exist, and if it did then by definition everyone would use it and circumstances would change so that it does not exist?

article this week........................ Are Junior Managers Wall Street Sacrificial Lambs?: Video - Bloomberg

as straddle says.... best to close out these positions on the last day....usually cheaper, less risk and hassle. Always check with your provider!!!!! You will also find other issues that will cause problems if the underlying closes exactly on a strike.

it might be interesting..... Remembering that there is a lot of varying ways of measuring volatility, and also its affect. eg; in Options - volatility is usually measured historically over X days on a close to close basis. But when it comes to that an instrument trending up by $1 every day for 60 days, produces very different results to one that moves between $98-$105 for 60 days with a $1 range each day. I also think there will be a lot of ideas thrown around without a lot of evidence - and even if evidence is provided it is not applicable to every situation - like above. I only used volatility in options trading and never really translated it toward straight directional trading - except to apply some rules of thumb - so unfortunately I will be full of one offs if anything in any discussion. Blue touches on on thing that is interesting - I think the Kauffman MA makes sense, in that you might be looking for compressions in order to then look for the next range expansion - (I will investigate further ) As for using vol on a rule of thumb basis daily - I simply look for how an instrument has reacted recently on a "if then should basis" in that if something does not move away from a level and accelerate for me then its usually a bad sign, if something is climbing a wall of worry and showing a lot of choppy volatile movements it alerts me to look for usually a spike with the current grinds direction - followed by a reversal.....ie; little conviction, a loss covering spike or shakeout, followed by a collapse or rally. I do think that volatility does often cause more volatility as well....this might be untradeable for me though. Dont know if this is much help - depends on how the discussion expands. Also dragged this out from an old link i had - i dont know if it is much use.... http://quantcorner.wordpress.com/2011/12/25/historical-volatility-excel-vba/

some of the quants that have used prices in their analysis distancing themselves from TA, and while the article points out that its about the 'golden mean' the basis for most of the data they all use is the same. .....neither uses FA, and each of them will argue there is value in their analysis..... that is all. Personally I have a broad definition of TA and most quant stuff seems to fit into that IMHO. I was put onto the article from another forum that found the distancing (maybe diverging was the wrong word) interesting.

Update - stop moved to BE, and i have halved the position...... why? - because I thought after waiting this long it should have broken, accelerated and kept going. It has not, pausing at 1.2820, pulling back to 1.2805 as a low. Keeping some on in case it goes through the original thought and kicks on. Otherwise - its a trade that did not do what it should have in the original "if this then that..." Wait until the next opp.

EURUSD - been waiting around a bit.....but this has formed an interesting compression for what i consider low risk trade. The chart is not too good - so the explanation is The current 1.2800 level is where it broke from before, its has now rallied back to it....an area of interest. The compression has occured in the price, and it has tried and failed to break up, Or decsively fall again. The green line is an alert line, and I am long at 1.2801, stop and reverse a close below 1.2794 (the red line) (I went a little early on the entry - in fact i missed my real earlier entry by 3-4 pips) No real profit targets except to let it run. (The upside I am more worried about it stopping near the upper trend line crudely drawn. Point is its taken a long time to get here, and now I figure it is worth a trade. http://www.traderslaboratory.com/forums/attachment.php?attachmentid=32985&stc=1&d=1353407075

Not sure where to stick this but it is a good website to reference regards any internet forums (the favourite sayings are often thrown out in arguments that we are all guilty of) Thou shalt not commit logical fallacies

Here is an interesting article that is very topical - i will also post it in a few other threads - for those who miss it. DeMark Fibonacci Charts Embraced by Steve Cohen Lure Investors - SFGate More so for the the diverging comments from quants - the headline article is not the whole story

Here is an interesting article that is very topical - i will also post it in a few other threads - for those who miss it. DeMark Fibonacci Charts Embraced by Steve Cohen Lure Investors - SFGate More so for the the diverging comments from quants - the headline article is not the whole story

Also has the money actually been spent?.....or is a lot of it taking potentially bad debts which might actually be paid off, retiring old debt and freeing up the system. A lot of it is underwriting the system rather than being spent. FWIW - the worst thing to come out of it was that many people have been bailed out that should not have been - homeowners, industries, banks (but then if it did not happen then would the mess be worse?) and that they are continuing to do the same idiotic mistakes (and why would you blame them) I think there was (and still is) and opportunity to fix the whole too big to fail and moral hazard that has been created before the next blow up really is too big, and for that I think it is more than Mr B alone has control over. As for the markets - yep - they go up and down.....have a look at the Chinese markets - how much growth have they had since 2001 - where were they in 2001. (I know there are many varying different reasons - but its just an example)