SIUYA

Let this be a lesson learnt......dont think that you can be a brain surgeon even if you can trade.....I have lost too many patients to even think about it.....ohhhhh the humanity :doh:

Good point.....in my summary I just blurted out that, but you are correct, he does approach from a different angle and the interview has this in parts when he talks about working out how he developed his ideas. Its has been referenced before in other threads (thx gosu) and seems much the same here. Often you dont need to see it as how to fix weaknesses, you might be better spending your time improving your strengths....or another way to see it from a traders point of view is how do I minimise the impact of my bad/loosing trades (as they will occur) and how do I maximise the returns on the ones I get right. By maybe modifying things usually (at a guess) that reduce the numbers of trades, rather than trying to impove entries and exits. ie; dont do anything radically different in the actual trades themselves and search for the holy grail. (Re Tom Basso and his style - yes, he is a trend follower, but I think this discussion and listening to the interview would be helpful regardless of your style.)

i just cut and paste it but if you type into Google tom basso interview michael covel it should come up. Otherwise it should be on the Michael Covel trend following webistes.

thats why I think his interview was interesting. He seemed to approach it from, here is a problem, lets find the solution. I always liked his style from what I have previously read, and that interview seemed topical. Interesting that you say he is habitually orientated toward opportunity. That is something I have discussed with a few old friends - too often people get caught up in the protection of what they have - either before or after they have made it - while missing the possibility of even giving themselves the opportunity. (in short you have to participate to have a chance) Regardless of all the reasons behind why, how or what, its always interesting to see when people initially start they either have a disregard for risk (they usually blow up), a total aversion to risk (they dont make enough money when they are right) or a mindset that they are quite happy to take good risk reward calculated risks. (part of the pushing s..t up hill even if you go through the motions) )

some one put me onto this interview.....Tom Basso http://ec.libsyn.com/p/5/e/0/5e07d7b1d98b03d1/TrendFollowingManifesto042412.mp3?d13a76d516d9dec20c3d276ce028ed5089ab1ce3dae902ea1d01cb823fd0cf5ea097&c_id=4477390 around time of 24-25mins on wards there is an interesting and relevant mention of the right mental state from a successful automated/systematic (and so not discretionary) trader.

when it comes to regulations and licences..... as mentioned having them may not necessarily make you - qualified or experienced- either a portfolio manager or trader or educator....as mentioned they are three very distinct things. Also when it comes to licences and regulations there are big distinctions that need to be made between a...target audience, wholesale/professional or retail. b....your residence and your place of business c....where your customers are d.....where your fund may be situated. Your simple best approach - dependent on your education, location, age etc; may be to either approach a funds management house about starting at the bottom to aim to be a portfolio manager, learn about indexing, tracking error, performance calculations and portfolio management OR to be an educator learn as much as you can for free or from others, then do a marketing course, presentation course etc and approach the CFD, spread betting or broking houses (or do it yourself). As often mentioned you dont need to be able to do it yourself to go down this route.

I think we are talking the same thing here....my pushing s..t up hill example is that even if you are doing the preparation and going through the emotions. Its just as pointless as not doing them if (any or all of the below) a....you are not prepared to understand why you are doing them b....you are actually not committed to doing them properly c....you are doing them from the wrong state of mind in the first place d....they are also not suited to either your personality and or trading style. hence as per usual not everyone can apply the same set of rules, and just doing somethings will work for others but not all, and understanding of what works for you is about all that matters. (if not then, I am totally lost on what you are saying, or very poor at explaining it myself.:doh:)

actually I am just trying to paraphrase you for myself (and maybe others) - a bit like putting it in my own words so that I get where you are coming from..... as I do find your writings somewhat cryptic (or just plain confusing) sometimes. I dont know if there is any disagreement or discounting.....

If I am reading you correctly zdo..... what you are saying is that if you cant even be bothered to do the preparation, and it does not come naturally, then even if you force yourself to do it (so it becomes ingrained) - then you are still pushing sh.t up hill from the beginning?

computer. (Sierra Chart, Interactive brokers) pencil and pad of paper - old school but it works.

this part of it just seemed so wrong!

if you are making 10% a month - the power of compounding would keep me sitting at a computer. Plus hiring a broker LOL - dude (with reference to the kite surfing all day) - you aint learnt nothing

if you need help/ideas/suggestions you will likely need to post a chart of what you are thinking and why, plus more info regards the options you are trading.....reason being that there are so many possibilities when it comes to strikes, series, strategies and price from a risk reward point of view is paramount. eg; selling a 50 tick put spread at 20 might actually make sense in some scenarios but not others.

in a similar thread of Zdo.... In an any efficiently operating system, any industry/business/system that can get excessive profits will likely be degraded by regulation, degradation of the resource or erosion of the margins by more competition. On this basis then regardless of if the public get hold of it, most systems are likely to be naturally degraded. So you may as well sell the system while it is hot! in other words - nothing works all the time to create excessive/abnormal/above market returns. Hence the recurring theme of learning to trade, being flexible, understanding context the instrument and system you are using are still paramount. Profitable systems dont often profit out of a free arbitrage or undiscovered secret. They profit because they are very well suited to maximise the opportunities for a particular type/phase of market conditions....these conditions can change.

yes....I dont know the full story of his involvement with it...now or previously, but it is comprehensive and more aligned for backtesting for portfolios and combining multiple systems. If you are interested in single instrument testing or simple ideas its probably not worth it.

Two IT friends have both recommended simply using the Microsoft Security Essentials. For them this will pick up most things. Then also ensure you have firewalls, modify passwords etc, and scan any downloaded files. Kiwi recommended this one and I use it regularly Jotti's malware scan Additionally you can use something that protects or records passwords such as Trusteer Rapport (This was offered by my bank otherwise I dont know where to get it) and you can apply it to various protected/trusted websites of your choosing. I also used to have two separate computers - one for dodgy surfing, one for trading and banking etc.

not sure where else to put this but i was in stitches.....only for those who like watching others injure themselves through stupidity ---- these people should be trading. ... [ame=http://www.youtube.com/watch?v=4SXLffvBpTY&feature=related]Extreme Idiots Compilation 2 - YouTube[/ame]

These are from a book called Disorder in the American Courts, and are things people actually said in court, word for word, taken down and now published by court reporters that had the torment of staying calm while these exchanges were actually taking place. ATTORNEY: What was the first thing your husband said to you that morning? WITNESS: He said , 'Where am I, Cathy?' ATTORNEY: And why did that upset you? WITNESS: My name is Susan! ____________________________________________ ATTORNEY: What gear were you in at the moment of the impact? WITNESS: Gucci sweats and Reeboks.. ____________________________________________ ATTORNEY: Are you sexually active? WITNESS: No , I just lie there. ____________________________________________ ATTORNEY: This myasthenia gravis, does it affect your memory at all? WITNESS: Yes. ATTORNEY: And in what ways does it affect your memory? WITNESS: I forget.. ATTORNEY: You forget? Can you give us an example of something you forgot? ___________________________________________ ATTORNEY: Do you know if your daughter has ever been involved in voodoo? WITNESS: We both do. ATTORNEY: Voodoo? WITNESS: We do... ATTORNEY: You do? WITNESS: Yes , voodoo. ____________________________________________ ATTORNEY: Now doctor , isn't it true that when a person dies in his sleep , he doesn't know about it until the next morning? WITNESS: Did you actually pass the bar exam? ____________________________________ ATTORNEY: The youngest son , the 20-year-old , how old is he? WITNESS: He's 20 , much like your IQ. ___________________________________________ ATTORNEY: Were you present when your picture was taken? WITNESS: Are you shitting me? _________________________________________ ATTORNEY: So the date of conception (of the baby) was August 8th? WITNESS: Yes. ATTORNEY: And what were you doing at that time? WITNESS: Getting laid ____________________________________________ ATTORNEY: She had three children , right? WITNESS: Yes. ATTORNEY: How many were boys? WITNESS: None. ATTORNEY: Were there any girls? WITNESS: Your Honor, I think I need a different attorney. Can I get a new attorney? ____________________________________________ ATTORNEY: How was your first marriage terminated? WITNESS: By death.. ATTORNEY: And by whose death was it terminated? WITNESS: Take a guess. ____________________________________________ ATTORNEY: Can you describe the individual? WITNESS: He was about medium height and had a beard ATTORNEY: Was this a male or a female? WITNESS: Unless the Circus was in town I'm going with male. _____________________________________ ATTORNEY: Is your appearance here this morning pursuant to a deposition notice which I sent to your attorney? WITNESS: No, this is how I dress when I go to work. ______________________________________ ATTORNEY: Doctor , how many of your autopsies have you performed on dead people? WITNESS: All of them.. The live ones put up too much of a fight.. _________________________________________ ATTORNEY: ALL your responses MUST be oral , OK? What school did you go to? WITNESS: Oral... _________________________________________ ATTORNEY: Do you recall the time that you examined the body? WITNESS: The autopsy started around 8:30 PM ATTORNEY: And Mr.. Denton was dead at the time? WITNESS: If not , he was by the time I finished. ____________________________________________ ATTORNEY: Are you qualified to give a urine sample? WITNESS: Are you qualified to ask that question? ______________________________________ And last: ATTORNEY: Doctor, before you performed the autopsy, did you check for a pulse? WITNESS: No. ATTORNEY: Did you check for blood pressure? WITNESS: No. ATTORNEY: Did you check for breathing? WITNESS: No.. ATTORNEY: So, then it is possible that the patient was alive when you began the autopsy? WITNESS: No. ATTORNEY: How can you be so sure, Doctor? WITNESS: Because his brain was sitting on my desk in a jar. ATTORNEY: I see, but could the patient have still been alive, nevertheless? WITNESS: Yes, it is possible that he could have been alive and practicing law

institutions trade correlations all the time. Their risk models are often based on a lot of the correlations between instruments, and many portfolios are based on these risk models around the indexes (especially when talking about equities.) and various asset allocation models. The easiest and simplest example is pairs trading - buy one instrument/sell another. Problem is most small traders dont care too much about correlations as .... 1)....they are not trading a portfolio 2).....their time frames are too small unless they are trying to capture small variations (ie High Frequency trades) 3)....like everything it works until it does not and the leverage required blows you up. 4)....it still requires a fair bit of discretion 5)....simple correlations are easy to spot and track - but hard to trade profitably probably due to all of the above. maybe it needs to be something that scans and highlights the breaks in correlations, or those correlations that are trending, and possibly looking to break. I agree with BH - to make it fun is the way to interest the retail crowd, and maybe attaching to more to sports might work. That way people can bet which football stars are sleeping with which other stars wives from the same team v other teams v cheerleaders v the groupies and if there is any correlation between being a groupie and later becoming a wife who gets cheated on.

As an attempt to answer......you cant reliably, as there are quite a lot of assumptions in this strategy. such as, time to expiry when you put the trade on, the stop is hit, how quickly it occurs, is there a spike in volatility, or a slow and gradual decline, if there is a spike - how big is it (does vol go from 20% to 30%, 50%, 60%) This quote "To limit losses i would like the position sizing to account for loss in premium value due to increased IV:" does not make sense....if implied vol increases, there is no loss in the premium value, you may/or may not end up with a loss on your option depending on the above mentioned variables.....For your position example the most you can make is 50 cents, and you have actually effectively sold a $38 put for this amount. (give or take interest costs). This is what you need to look at when position sizing.....can you wear the cost of having to purchase the stock at $37.50 if need be. Position size off this maybe....

Anarchists who live their lives by rules. laissez-faire capitalists who pick and choose which rules apply to them and then cry poor when it does not work for them. Socialists who have no idea about what incentivises/motivates other people Watermelons - green on the inside but are in actual fact economic idealists Company executives that talk of corporate culture and social responsibility and then defend evading taxes, excessive salaries and forgetting they are employees. The nanny state that feels a need to remind me not to step in front of a moving train but can do nothing when MF Global executives steal customer money.... Extremists of any sort. and my favorite....accountants....who I blame for all the above. Virgin Atlantic - for flight systems that are either so bad they dont know whats happening, or ground staff that are out and out liars.....a recent few flights back and forth from the UK to Australia....never an enjoyable flight......plus I am a little jet lagged.

you cant beat it you can only break it.....George Soros.... or more the point, they beat themselves..... Unless Spain really goes down and QEIII needs to be so massive everything else is pointless, gold looks headed south....my completely off the top of the head comment even though I dont follow it. What happens if people exit these gold ETFs and other such funds. Something to ponder over the break.

while letting your subconscious intuition monitor the trading..........

from the article... "There's a bona fide need to protect people from one-on-one harassment," Williams told the Associated Press. "Hopefully, we can eliminate the dialogue of the extremists in this conversation, find mainstream consensus where we protect people's privacy, protect people from harassment -- but without quashing, quelling or impeding upon appropriate free speech." Sorry TL - your days are numbered....... Scary that .....there is no real definition of extremists, harassment, one on one..... .....in order to protect free speech we must monitor it and eliminate the dialogue of extremists ????? I thought that free speech actually did that. From now on read my disclaimer.......... when i refer to "I", "you", "him", "her" I actually mean "everyone","the entire world","nobody in particular".....so when I harass you or call "you" a f...n idiot Its not personal....and I include myself in that group Would that be enough to mean that its not one on one.....

a lot will depend on the costs of the options. If you are just wanting to protect a catastrophic loss then the further out of the money maybe the better. If you have a profit target on your short then maybe you could consider a zero cost collar.(or other named variation) short a put say $10, long the $13 call - again all dependent on individual prices of course. so that the options dont really cost you. - at expiry you will decide what to do. or get taken out of one or the other leg. Alternatively you could buy an otm call option spread, slightly lower cost - maybe Why no just buy a deep ITM put with not much premium on it eg; $16 put....take the short off and at least you know your downside in a take over is limited. It will all boil down to doing some scenario analysis with regards prices and "thinking" about what might occur in various scenarios. In the event of a takeover, option premium gets crushed as the stocks normally go into tight trading ranges, whereas takeover rumours see volatility for the just out of the money calls spike.....tough call.