TA Debunked

[Logic 10]

You didn't say it but I will .... another reason, since most claims by others are dubious, at best.

 

Not to be taken by anyone in particular as referring to them, but what the internet age is famous for.

 

Being skeptical is a really good thing and important to one's survival in this industry. Being narrow minded, close minded and arrogant will get one absolutely no where even faster.

 

If one can't balance their skepticism and curiousity then one needs to find another passion.

[SunTrader 10]

Being skeptical is a really good thing and important to one's survival in this industry. Being narrow minded, close minded and arrogant will get one absolutely no where even faster.

 

If one can't balance their skepticism and curiousity then one needs to find another passion.

True.

 

I am curious of most things and skeptical of all things until proof, or as close to proof is possible, shows otherwise.

 

I was born at night, not last night. Actually 6 in the morning.

[MightyMouse 12]

If your trading only returns 3% then you aren't trading you are investing. Some of us have "traded" for years and earned far greater than 3% even monthly. Skills are skills.

 

Some of us? I guess that list includes you which implies that you have the skills and have earned far greater than 3% a month. Of course this is something that we will never be able to see

 

I suppose that you can run mile in under 4 minutes, bench press 700 lbs and squat 1000 lbs. Why not? Spread the bs evenly. It looks cleaner. Most readers on TL do not like lumpy bs.

 

It is always refreshing to get a comic book view of trading.

Edited May 29, 2012 by MadMarketScientist
language

[MightyMouse 12]

Hi BlueHorseshoe,

And while you were compounding your small return every month,what were you using to pay the rent?

regards

bobc

 

Don't forget taxes. Assuming a 25% tax rate every 12 months.

 

1 20000

2 20600

3 21218

4 21854.54

5 22510.1762

6 23185.48149

7 23881.04593

8 24597.47731

9 25335.40163

10 26095.46368

11 26878.32759

12 27684.67741 25763.50806

13 28515.21774 26536.4133

14 29370.67427 27332.5057

15 30251.7945 28152.48087

16 31159.34833 28997.0553

17 32094.12878 29866.96696

18 33056.95265 30762.97597

19 34048.66122 31685.86525

20 35070.12106 32636.4412

21 36122.22469 33615.53444

22 37205.89143 34624.00047

23 38322.06818 35662.72049

24 39471.73022 34183.5549

25 40655.88213 35209.06155

26 41875.55859 36265.3334

27 43131.82535 37353.2934

28 44425.78011 38473.8922

29 45758.55351 39628.10896

30 47131.31012 40816.95223

31 48545.24942 42041.4608

32 50001.60691 43302.70462

33 51501.65511 44601.78576

34 53046.70477 45939.83934

35 54638.10591 47318.03452

36 56277.24909 45355.44705

37 57965.56656 46716.11046

38 59704.53356 48117.59378

39 61495.66956 49561.12159

40 63340.53965 51047.95524

41 65240.75584 52579.39389

42 67197.97852 54156.77571

43 69213.91787 55781.47898

44 71290.33541 57454.92335

45 73429.04547 59178.57105

46 75631.91683 60953.92818

47 77900.87434 62782.54603

48 80237.90057 60178.54442

49 82645.03759 61983.90076

50 85124.38871 63843.41778

51 87678.12037 65758.72031

52 90308.46399 67731.48192

53 93017.7179 69763.42638

54 95808.24944 71856.32917

55 98682.49693 74012.01905

56 101642.9718 76232.37962

57 104692.261 78519.35101

58 107833.0288 80874.93154

59 111068.0197 83301.17948

60 114400.0603 79846.13634

61 117832.0621 82241.52043

62 121367.0239 84708.76604

63 125008.0347 87250.02902

64 128758.2757 89867.52989

65 132621.024 92563.55579

66 136599.6547 95340.46246

67 140697.6443 98200.67634

68 144918.5737 101146.6966

69 149266.1309 104181.0975

70 153744.1148 107306.5305

71 158356.4382 110525.7264

72 163107.1314 105941.5037

73 168000.3453 109119.7488

74 173040.3557 112393.3413

75 178231.5664 115765.1415

76 183578.5134 119238.0958

77 189085.8688 122815.2387

78 194758.4448 126499.6958

79 200601.1982 130294.6867

80 206619.2341 134203.5273

81 212817.8111 138229.6331

82 219202.3455 142376.5221

83 225778.4158 136471.2393

84 232551.7683 140565.3764

85 239528.3214 144782.3377

86 246714.171 149125.8079

87 254115.5961 153599.5821

88 261739.064 158207.5696

89 269591.2359 162953.7967

90 277678.973 167842.4105

91 286009.3422 172877.6829

92 294589.6225 178064.0134

93 303427.3111 183405.9338

94 312530.1305 188908.1118

95 321906.0344 181072.8604

96 331563.2154 186505.0463

97 341510.1119 192100.1976

98 351755.4152 197863.2036

99 362308.0777 203799.0997

100 373177.32 209913.0727

101 384372.6396 216210.4649

102 395903.8188 222696.7788

103 407780.9334 229377.6822

104 420014.3614 236259.0126

105 432614.7922 243346.783

106 445593.236 250647.1865

107 458961.0331 240251.2131

108 472729.864 247458.7495

109 486911.76 254882.512

110 501519.1128 262528.9874

111 516564.6862 270404.857

112 532061.6267 278517.0027

113 548023.4755 286872.5128

114 564464.1798 295478.6882

115 581398.1052 304343.0488

116 598840.0484 313473.3403

117 616805.2498 322877.5405

118 635309.4073 332563.8667

119 654368.6895 342540.7827

120 673999.7502 352817.0062

121 694219.7427 338183.3841

[SIUYA 11]

like most things debunked.....

$100,000 leverage 10x verses $10,000 leveraged 100 times....whats the rate of return?

or should it be on exposure, or margin used, or risk taken.....

 

"annualise that" - always the call before the downfall.

[Logic 10]

Some of us? I guess that list includes you which implies that you have the skills and have earned far greater than 3% a month. Of course this is something that we will never be able to see

 

I suppose that you can run mile in under 4 minutes, bench press 700 lbs and squat 1000 lbs. Why not? Spread the bullshit evenly. It looks cleaner. Most readers on TL do not like lumpy bullshit.

 

It is always refreshing to get a comic book view of trading.

 

I recently partnered to run a long established quarter billion dollar hedge fund based on them extensively testing my algorithms. They consistently produced returns greater than 3% monthly using my software but you are correct in stating "you will never see it". At least not the inner workings of it.

 

There are those, more intelligent individuals, that still believe testing wild statements might prove themselves out at some point as this fund did. They were extremely skeptical until they saw the results produced from their own traders utilizing the algorithms. Nothing like having the skeptical prove themselves wrong. They are my favorite converts.

 

You have a wonderful holiday Mighty Mouse reading your comic books.

[MightyMouse 12]

I recently partnered to run a long established quarter billion dollar hedge fund based on them extensively testing my algorithms. They consistently produced returns greater than 3% monthly using my software but you are correct in stating "you will never see it". At least not the inner workings of it.

 

There are those, more intelligent individuals, that still believe testing wild statements might prove themselves out at some point as this fund did. They were extremely skeptical until they saw the results produced from their own traders utilizing the algorithms. Nothing like having the skeptical prove themselves wrong. They are my favorite converts.

 

You have a wonderful holiday Mighty Mouse reading your comic books.

 

OOOOW! a hedge fund. They are smart. Imagine how smart you are if they are using your algorithms.I get the gist. Clearly, then, you are the smartest person on this site. I guess you weren't done with your story telling. Can you also snap a whip Indiana? I am glad you won't tell us or show us your results because I think our faces would melt. Just like in the movie when they were exposed to the holy grail.

[BlueHorseshoe 10]

Don't forget taxes. Assuming a 25% tax rate every 12 months.

 

Why on earth would you pay taxes?

 

It's simple enough to trade an account operating as a company domiciled in an off-shore jurisdiction. When you finally cease trading you then have two options:

 

1) Move the money back into your own tax residency as capital gains, at which point the 25% is less harmful than a 25% deduction on a yearly basis.

 

2) Move and live in the off-shore jurisdiction (or any other country with similar tax arrangements) - which shouldn't be a problem if your real returns were anything like the hypothetical ones I listed.

 

BlueHorseshoe

[BlueHorseshoe 10]

I recently partnered to run a long established quarter billion dollar hedge fund based on them extensively testing my algorithms. They consistently produced returns greater than 3% monthly using my software but you are correct in stating "you will never see it". At least not the inner workings of it.

 

Hi Logic,

 

I'm not really sure that I'd be interested in the inner workings. All I'm interested in is making lots of money so that I can enjoy spending it. Consequently I'd be very interested in investing with the fund you mention and seeing similar returns on my money - please can you tell me the name of the fund so that I can get in contact with them?

 

Thanks,

 

BlueHorseshoe

[MightyMouse 12]

Why on earth would you pay taxes?

 

It's simple enough to trade an account operating as a company domiciled in an off-shore jurisdiction. When you finally cease trading you then have two options:

 

1) Move the money back into your own tax residency as capital gains, at which point the 25% is less harmful than a 25% deduction on a yearly basis.

 

2) Move and live in the off-shore jurisdiction (or any other country with similar tax arrangements) - which shouldn't be a problem if your real returns were anything like the hypothetical ones I listed.

 

BlueHorseshoe

 

Don't pass Go and go straight to Jail.

[Logic 10]

OOOOW! a hedge fund. They are smart. Imagine how smart you are if they are using your algorithms.I get the gist. Clearly, then, you are the smartest person on this site. I guess you weren't done with your story telling. Can you also snap a whip Indiana? I am glad you won't tell us or show us your results because I think our faces would melt. Just like in the movie when they were exposed to the holy grail.

 

No one is as smart as you Mighty Mouse. I know you trade an account that size on your own, have balls of steel and the intellect of Arnold Schwarzenegger.

 

If you think 38% annual returns are impossible you are far more ignorant than anyone on this site ever imagined. Three closed listed private funds currently have audited documented returns in that neighborhood and have had for a number of years.

Edited May 29, 2012 by MadMarketScientist
off topic

[gosu 10]

Why on earth would you pay taxes?

 

It's simple enough to trade an account operating as a company domiciled in an off-shore jurisdiction. When you finally cease trading you then have two options:

 

1) Move the money back into your own tax residency as capital gains, at which point the 25% is less harmful than a 25% deduction on a yearly basis.

 

2) Move and live in the off-shore jurisdiction (or any other country with similar tax arrangements) - which shouldn't be a problem if your real returns were anything like the hypothetical ones I listed.

 

BlueHorseshoe

 

You should stick to trading and hope your knowledge of the market you trade is not as poor as your knowledge of tax law.

 

If you're interested in researching, I can suggest looking up

 

(1) Subpart F income, CFCs, PFICs, FPHCs, etc.;

 

(2) Taxation of worldwide income on U.S. citizens and residents; and

 

(3) The Immigration and Nationality Act provisions on renouncing U.S. citizenship for the purpose of avoiding U.S. taxation.

 

However, I suggest you save yourself a lot of time, headache, and possible criminal prosecution and just leave it to experts.

[Logic 10]

Why on earth would you pay taxes?

 

It's simple enough to trade an account operating as a company domiciled in an off-shore jurisdiction. When you finally cease trading you then have two options:

 

1) Move the money back into your own tax residency as capital gains, at which point the 25% is less harmful than a 25% deduction on a yearly basis.

 

2) Move and live in the off-shore jurisdiction (or any other country with similar tax arrangements) - which shouldn't be a problem if your real returns were anything like the hypothetical ones I listed.

 

BlueHorseshoe

 

Blue,

 

The rodent probably thinks St. Croix is a foreign country too.

Edited May 29, 2012 by MadMarketScientist
off topic

[MightyMouse 12]

No one is as smart as you Mighty Mouse. I know you trade an account that size on your own, have balls of steel and the intellect of Arnold Schwarzenegger.

 

I never claimed to ever be smarter than anyone but now after a few of your posts I can say, without a doubt, I'm smarter than you and so is my 12 year old son for that matter.

 

If you think 38% annual returns are impossible you are far more ignorant than anyone on this site ever imagined. Three closed listed private funds currently have audited documented returns in that neighborhood and have had for a number of years.

 

I do not think that 38% returns are impossible, There is a big difference between saying you make 38% a year and saying you made 38% in a year. You claim that your skills are such that you can make 3% per month consistently which is just plain bs. The fact that a few funds did it simply is just what is statistically expected and not the norm

 

Hot shot I challenge you to post only one winning trade before the fact. Just one. But of course you don't have to prove anything to someone like me yada yada, Go hide behind your screen and keyboard where you are safe from exposure.

Edited May 29, 2012 by MadMarketScientist
off topic

[SunTrader 10]

I recently partnered to run a long established quarter billion dollar hedge fund based on them extensively testing my algorithms....

Shark jumper spotted.

[gosu 10]

I suggest a TL Celebrity Death Match to settle the issue between Logic and Mouse once and for all. In the meanwhile, I offer my 2 cents.

 

The application of trading knowledge, skill and experience easily blows away any financial industry benchmark of performance. Why? Because the financial industry is not about performance but about aggregating immense capital pools from which fees and commissions can be collected. Spreading propaganda to create low expectations and even loss acceptance as natural on the part of the people who contribute to the pools helps with the aggregating. The financial industry has done such a thorough and complete job of inculcation that most people will never break out of their misbelief.

 

Trading is a performance activity. What this means is whatever you extracted last week/month/year/decade does not guarantee shit about what you will extract tomorrow, this week or this month. People who make up spreadsheets compounding some modest return like 3% per month into the future over 10, 15, 20 years, etc. are merely revealing their lack of personal experience. Why do traders not end up owning the world? It has nothing to do with statistics.

 

Personally I consider 3% a bad month. This is not to say I haven't done worse than 3%, but I know what the market offers and what I'm capable of extracting in terms of that offer. What do I consider a good month? Someone mentioned 38%, and I would consider that a good month and is around 100 points per contract ES. Points extracted is all that matters; the percentage return is unimportant as that depends on the use of leverage. I have rarely pushed the leverage and until recently was somewhere between 10K to 15K per contract. MF Global was a wake up call and I've reconsidered how much I trust with a broker. Conclusion: More leverage is good.

 

In any case, I have no interest in calling trades or proving anything to anyone. I suspect there may be only a handful of people here who can relate. None of them are making spreadsheets that compound ad infinitum into the future.

[bobcollett 10]

Thank you MMS

regards

bobc

[SIUYA 11]

You should stick to trading and hope your knowledge of the market you trade is not as poor as your knowledge of tax law.

 

If you're interested in researching, I can suggest looking up

 

(1) Subpart F income, CFCs, PFICs, FPHCs, etc.;

 

(2) Taxation of worldwide income on U.S. citizens and residents; and

 

(3) The Immigration and Nationality Act provisions on renouncing U.S. citizenship for the purpose of avoiding U.S. taxation.

 

However, I suggest you save yourself a lot of time, headache, and possible criminal prosecution and just leave it to experts.

 

As much as your criticism of Blue horseshoe may have validity....Unfortunately gosu - you should realise not everyone in the world is a US citizen...I hope that does not reflect on your trading abilities

[karoshiman 10]

 

... I offer my 2 cents.

 

...

 

I have rarely pushed the leverage and until recently was somewhere between 10K to 15K per contract. MF Global was a wake up call and I've reconsidered how much I trust with a broker. Conclusion: More leverage is good.

 

...

 

 

 

Great post gosu! It was worth at least 3 cents

 

I am of the same opinion that the performance statistics of any fund are irrelevant for us individual traders. People often forget the huge advantage we have over them. That is, we don't have to move gazillions of money around. Hence, we can participate in many more market movements than they can. It's like comparing a speed boat with a large cruiser. We are much more flexible than they are.

 

Just one question re. MF Global and leverage. You mean you want to increase your leverage to generate more return in order to pull out money out of your trading account faster, so that a similar occurrence as with MF Global will not wipe out everything you have?

[MightyMouse 12]

Great post gosu! It was worth at least 3 cents

 

People often forget the huge advantage we have over them. That is, we don't have to move gazillions of money around. Hence, we can participate in many more market movements than they can. It's like comparing a speed boat with a large cruiser. We are much more flexible than they are.

 

karoshiman,

 

I know this isn't your idea since I have heard it before, but it is purely delusional.

 

You make a hedge fund sound like a lumbering whale. You have zero advantage over a hedge fund assuming that both of you know how to trade, in fact, you are at a monstrous disadvantage because of your size. They can employ tactics and strategies which are simply not economically feasible for you because of your size. This really needs to be thought through.

 

There are plenty of people on these threads who desire to be viewed as being enigmatic. I understand that anybody can be anything they want to be online and this is fun venue to be something they are not. I suppose the practice fills a gap or something like that.

 

MM

[JMB 10]

karoshiman,

 

I know this isn't your idea since I have heard it before, but it is purely delusional.

 

You make a hedge fund sound like a lumbering whale. You have zero advantage over a hedge fund assuming that both of you know how to trade, in fact, you are at a monstrous disadvantage because of your size. They can employ tactics and strategies which are simply not economically feasible for you because of your size. This really needs to be thought through.

 

There are plenty of people on these threads who desire to be viewed as being enigmatic. I understand that anybody can be anything they want to be online and this is fun venue to be something they are not. I suppose the practice fills a gap or something like that.

 

MM

 

I would say that we do not need an advantage over a hedge fund/institution/bank. You can see them on a price chart and its our job to get in at a better price before their limit orders get hit. Damn , is it me or did that just sound super cool?? :rofl:

[karoshiman 10]

 

...

 

They can employ tactics and strategies which are simply not economically feasible for you because of your size. This really needs to be thought through.

 

...

 

 

 

Okay, which are these tactics and strategies? Can you be more specific?

[joshdance 10]

Okay, which are these tactics and strategies? Can you be more specific?

 

Three that immediately come to mind:

 

Spoofing with large orders on the bid, sitting on the offer (and vice versa)

 

Buying a breakout with large size to excite retail, who continues the buying, while you sit on the offer up higher to get a better price (and vice versa)

 

Actually holding the bid or offer, with size

[karoshiman 10]

Three that immediately come to mind:

 

Spoofing with large orders on the bid, sitting on the offer (and vice versa)

 

Buying a breakout with large size to excite retail, who continues the buying, while you sit on the offer up higher to get a better price (and vice versa)

 

Actually holding the bid or offer, with size

 

 

Fair enough. But you can still make money as an individual if you understand such behavior of funds.

 

All I'm saying is that an individual trader can make money by gathering a few ticks here and there, whereas most funds need big(ger) moves to make money. This is an advantage we have over them. It's only one aspect, of course, but this is IMO always missing in performance comparisons of individual traders vs. funds.

 

The examples of some of the Market Wizards showed that their performance got worse the more money they managed. Now, you can attribute that to other aspects as well (or just good and bad luck). However, they themselves attributed it to the increased size they had to manage.

[Lornz 10]

karoshiman,

 

There are plenty of people on these threads who desire to be viewed as being enigmatic. I understand that anybody can be anything they want to be online and this is fun venue to be something they are not. I suppose the practice fills a gap or something like that.

 

MM

 

Most people can't trade, so they seek out message boards to receive adoration instead. It's the only "return" on investment they can achieve.

 

Three that immediately come to mind:

 

Spoofing with large orders on the bid, sitting on the offer (and vice versa)

 

Buying a breakout with large size to excite retail, who continues the buying, while you sit on the offer up higher to get a better price (and vice versa)

 

Actually holding the bid or offer, with size

 

I doubt there are many people trading like that in liquid markets today...

 

People often forget the world of market-neutral strategies. Capital and infrastructure allows one to engage in arbitrage (both deterministic and statistical) that retailers can only dream of. Or, for discretionary traders, being able to keep a well-balanced global macro portfolio.

 

Binary bets on the future price of a single instrument are usually only made by pikers like us.

Edited May 29, 2012 by Lornz
is/are can be quite difficult for complete morons like myself.