TA Debunked

[karoshiman 10]

You can start with these. There is a larger pdf that won't upload. But you can find it on the SEC site:

 

http://www.sec.gov/news/studies/2010/marketevents-report.pdf

 

 

Thanks gosu! Very much appreciated!

[SunTrader 10]

.......

The inherent problem with forex is that each individual broker "makes" the market available to its clients. much of the retail volume is aggregated and re-aggregated, plus there is a lot more that will never be shown in the higher-tier interbank markets, unless some of those providers start revealing real-time volume information.

......

 

My APAMI indicator, which measures net distance between the current price (bid not price) ......................

 

Major money center banks dwarf retail traders manifold.

[SIUYA 11]

You assume too much.

 

I am not sure I assumed anything .... in your response, you took the US centric view, even if you may not be American, to point out Bluehorseshoe that he should refer to US tax law.

 

who cares.....

 

as yes Karoshiman I am Aussie living in London....and just for a few stereotypes - I am generally relaxed until pushed or have a passion, I dont really care for sport but i like to watch it and participate in idividual pursuits, I dont think I am a "bogan", , I dont own a kangaroo but have shot and eaten a few, have craked a nicky nake, never wrestled a croc or nark, I can hold a 30 min conversation without really saying much, and I know you can shorten Wagga Wagga to just Wagga whereas you cannot do the same for Woy Woy. (IMHO when it comes to driving Aussies are the most aggressive and bad tempered (not crazy tho) in the world compared to their normal state of being.)....

[joshdance 10]

Only a spontaneous discussion of who's likely to win the NBA championship would take this thread more off topic. Unsubscribing.

[karoshiman 10]

 

...

 

as yes Karoshiman I am Aussie living in London....and just for a few stereotypes - I am generally relaxed until pushed or have a passion, I dont really care for sport but i like to watch it and participate in idividual pursuits, I dont think I am a "bogan", , I dont own a kangaroo but have shot and eaten a few, have craked a nicky nake, never wrestled a croc or nark, I can hold a 30 min conversation without really saying much, and I know you can shorten Wagga Wagga to just Wagga whereas you cannot do the same for Woy Woy. (IMHO when it comes to driving Aussies are the most aggressive and bad tempered (not crazy tho) in the world compared to their normal state of being.)....

 

 

"not a bogan"... lol ... had to look up the word

 

What does "craked a nicky nake" mean? And what is a "nark"??

 

Couldn't find both in the dictionary... I am not a native english speaker... yes, I am not from the US, nor UK or AU...

 

This thread is going off-topic, by the way...

[karoshiman 10]

Only a spontaneous discussion of who's likely to win the NBA championship would take this thread more off topic. Unsubscribing.

 

 

Might be the reason that OP hasn't replied to any of the comments...

[SIUYA 11]

it was never going to be on topic...a bit like asking which do you prefer to watch NBA or NFL or NFI.

 

crack nicky nake = grab a snake by the tail and try and crack its back - did not work for me, so i threw it and ran as a teenager

nark =shark

[Logic 10]

3 workarounds to doing it:

 

1) (less precise): use futures contract equivilant fx contracts and calculate proportional volume into its spot FX equivilant. Also CME and other institutions may actually be starting to do some OTC transactions on an institutional level.

 

2) (broker-specific): measure the price difference per incoming tick. If they offer some sort of level II volume statistics, use it. I think FXOpen ECN, InstaForex (surprisingly), maybe MBTrading, Interactive Brokers, and maybe the newer tradestation feed does offer some sort of level II insight.

 

3) (broker-specific): see if you can get a feed with as many liquidity providers/brokers as possible / api access and get the actual level 2 volume as they keep track of it. Then you would compare the net price movement and net volume for each tick. Obviously this is the most accurate of the 3 and the most expensive/difficult.

 

The inherent problem with forex is that each individual broker "makes" the market available to its clients. much of the retail volume is aggregated and re-aggregated, plus there is a lot more that will never be shown in the higher-tier interbank markets, unless some of those providers start revealing real-time volume information.

 

Exchange traded products every tick is accounted for; so no problems getting accurate tick data. Forex brokers tend too "filter/smooth" their datafeeds. You'd be surprised how many actual ticks would come through if they didn't smooth the feed. But then there may be additional platform stability issues, etc. And for historical analysis, tick data is lacking from many brokers; forextester is one of few companies offering tick data collection.

 

If metatrader 5 had been what metatrader 4 was now, this data might have been more accessible already with more traders.

 

My APAMI indicator, which measures net distance between the current price and a previous price point, (qualified by retracements) did reveal some interesting aspects about how price really works. More on that hopefully by the end of this week :haha:

 

Thanks.

 

I was aware of #1, #2 isn't consistently accurate and #3 is a new approach we hadn't though of. Definately worth looking into.

 

We trade currency futures now because of the lack of accurate volume data in FOREX. The heads up is greatly appreciated.

[BlueHorseshoe 10]

What millions of businesses?

 

Here's what trusty old Wikipedia has to say about the volume of offshore business:

 

Offshore banking is an important part of the international financial system. Experts believe that as much as half the world's capital flows through offshore centers. Tax havens have 1.2% of the world's population and hold 26% of the world's wealth, including 31% of the net profits of United States multinationals. According to Merrill Lynch and Gemini Consulting's “World Wealth Report” for 2000, one third of the wealth of the world's “high net-worth individuals”—nearly $6 trillion out of $17.5 trillion—may now be held offshore. Some $3 trillion is in deposits in tax haven banks and the rest is in securities held by international business companies (IBCs) and trusts.

 

The IMF has said that between $600 billion and $1.5 trillion of illicit money is laundered annually, equal to 2% to 5% of global economic output. Today, offshore is where most of the world's drug money is allegedly laundered, estimated at up to $500 billion a year, more than the total income of the world's poorest 20%. Add the proceeds of tax evasion and the figure skyrockets to $1 trillion. Another few hundred billion come from fraud and corruption. "These offshore centers awash in money are the hub of a colossal, underground network of crime, fraud, and corruption" commented Lucy Komisar quoting these statistics.[1] Among offshore banks, Swiss banks hold an estimated 35% of the world's private and institutional funds (or 3 trillion Swiss francs), and the Cayman Islands (1.9 trillion US dollars in deposits) are the fifth largest banking centre globally in terms of deposits.[9] However, recent data by the Swiss National Bank show that the assets held by foreign persons in Swiss bank accounts declined by 28.1% between January 2008 and November 2009.[10]

 

As a layperson, you really have no idea.

 

Erm . . . who's the one getting taxed on their trading profits here mate? It isn't me . . .

 

You cannot compare your simple scheme to what multinationals do in organizing their actual business operations, financing, holding of intangible property, etc.

 

Nope, and I wasn't trying to. Although it's a fair bet that the authorities are likely to be far more concerned with how multinationals pay their millions of dollars of taxes than me making a few grand a year from a hobby, don't you think?

 

This conversation may as well end here Gosu . . . I don't have your detailed legal knowledge or any direct experience of using offshore accounts for tax avoidance . . . And you don't seem willing to accept that, whether or not the mechanics of what I described are correct, there will be relatively straightforward methods of avoiding taxation for those who can be bothered to research and implement them.

 

I can't believe that all this (and a load of other flack besides) came from me offering a simple hypothetical demonstration of the effects of compounding, which was in any case explicitly aimed at new traders . . . Sometimes I don't know why I bother!

 

BlueHorseshoe

[phantom 16]

(IMHO when it comes to driving Aussies are the most aggressive and bad tempered (not crazy tho) in the world compared to their normal state of being.)....

 

Ya know, when I was in Perth a number of years ago, I did notice a little something something...I can't speak to the bad temper part, but as far as the driving aggressiveness-Aussies make NY taxicab drivers look tame!

[MightyMouse 12]

 

 

I can't believe that all this (and a load of other flack besides) came from me offering a simple hypothetical demonstration of the effects of compounding, which was in any case explicitly aimed at new traders . . . Sometimes I don't know why I bother!

 

BlueHorseshoe

 

I had you confused with another person. I genuinely thought you were from the US too.

[bobcollett 10]

Ya know, when I was in Perth a number of years ago, I did notice a little something something...I can't speak to the bad temper part, but as far as the driving aggressiveness-Aussies make NY taxicab drivers look tame!

 

Hi phantom

Just the guy I 'm looking for. A knowledge CRUDE OIL trader

As this thread has lost its topic , I have no hesitation in posing the following here.

But answer on some other thread.They will kill you here.

"July crude oil futures closed at $88 today!!"

Thats a train smash

Please comment

regards

bobc

[phantom 16]

Answer on some other thread.They will kill you here.

"July crude oil futures closed at $88 today!!"

Thats a train smash

Please comment

regards

bobc

 

Hi Bob!

 

As far as getting killed here? You well know how many times traders lay in waiting while I was trying to teach over on my thread...None of this really phases me anymore...

 

I'll talk about CL over on my thread later today. Gotta run errands now.

 

Talk soon,

Phantom

[gosu 10]

* * *

 

I can't believe that all this (and a load of other flack besides) came from me offering a simple hypothetical demonstration of the effects of compounding, which was in any case explicitly aimed at new traders . . . Sometimes I don't know why I bother!

 

BlueHorseshoe

 

What's the big deal? You post fluff, sometimes you get called out on it, you rebut, others join in, personalities come out, people complain, the thread generates posts for the site. Your effort was not in vain. Be happy.

[BlueHorseshoe 10]

What's the big deal? You post fluff, sometimes you get called out on it, you rebut, others join in, personalities come out, people complain, the thread generates posts for the site. Your effort was not in vain. Be happy.

 

Yes, and having read through UK CFC tax regulations this afternoon it would seem that . . . erm . . . you are absolutely correct - what I was suggesting would be a lot more difficult to do than I had imagined . . .

[DavidTurner 10]

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.

 

Shennanigans. If you can earn 3% per month after taxes and fees, then all you'd need is $32,000 and 40 years to have more money than Warren Buffett. Plenty of people have $32,000 and 40 years, so how come there's only four people who have $40bn?

[Logic 10]

Shennanigans. If you can earn 3% per month after taxes and fees, then all you'd need is $32,000 and 40 years to have more money than Warren Buffett. Plenty of people have $32,000 and 40 years, so how come there's only four people who have $40bn?

 

That is "IF" you find the need to continuously compound returns. I for one, don't. I found a saturation point for my personal trading that produces a comfortable profitability level without the stress of needing to create a Warren Buffett type of environment. Your statement is a perfect example of how greed and excess plays into one's opinion of this business and how common sense is never a meaningful consideration.

[BlueHorseshoe 10]

Shennanigans. If you can earn 3% per month after taxes and fees, then all you'd need is $32,000 and 40 years to have more money than Warren Buffett. Plenty of people have $32,000 and 40 years, so how come there's only four people who have $40bn?

 

There may be fewer "people" because the compounding of multi-billion dollar sums is done predominantly within funds, not by individuals. There are plenty of funds that record a better rate of return than Buffet, and manage much larger sums of money. They just don't happen to have benefitted any one individual to the extent that Buffet has enjoyed.

 

Netting a 3% monthly return is child's play. In fact, if you diregard risk, netting a 50% return in a day is a coin toss. Doing it month after month, year after year, with carefully limited risk, is very, very difficult indeed. Compounding is great in theory, but in practice it needs to be enacted upon consistent profits over a sustained period - a very tricky endeavour indeed!

 

BlueHorseshoe

[DavidTurner 10]

Netting a 3% monthly return is child's play. In fact, if you diregard risk, netting a 50% return in a day is a coin toss. Doing it month after month, year after year, with carefully limited risk, is very, very difficult indeed. Compounding is great in theory, but in practice it needs to be enacted upon consistent profits over a sustained period - a very tricky endeavour indeed!

 

Yes, and that's basically the point I was making, here and in the other forum: I'm really not interested in hearing about 3% a month unless it's repeated consistently, month after month, year after year. Since no-one does this in practice, I would be happy to hear that you've outperformed the benchmark by 2% on average without major tracking error.

[karoshiman 10]

Shennanigans. If you can earn 3% per month after taxes and fees, then all you'd need is $32,000 and 40 years to have more money than Warren Buffett. Plenty of people have $32,000 and 40 years, so how come there's only four people who have $40bn?

 

 

... strategies which generate such high returns will not be possible after a certain trading volume is reached.

 

There are traders out there who generate 20-25% consistently per month with low to mid-sized six figure USD accounts but cash out their profits at the end of each month.

[BlueHorseshoe 10]

... strategies which generate such high returns will not be possible after a certain trading volume is reached.

 

There are traders out there who generate 20-25% consistently per month with low to mid-sized six figure USD accounts but cash out their profits at the end of each month.

 

I agree with your first sentence for the most part (although trend following funds frequently weigh in and out of positions worth billions).

 

As for the second sentence . . . I'm sure you would agree that to consistently generate 20-25% per month you'd have to be pretty damn smart? Would anyone who was this smart not be able to perceive the advantages of compounding and exercise the foresight to implement it? At the rate of return you describe, someone with a $20,000 could retire as a multi-millionaire within a few years - now why would they be foolish enough to continue with a 'cashed out' monthly return of a few thousand for the rest of their lives?

 

If you really think about it, it just doesn't make sense.

 

And if you're reading this and you're consistently making 20-25% per month and removing it from your account - well then you're both enviably talented as a trader and pretty damn stupid. Don't bother replying - spend the time working out how to compound your gains (and then invite me to the afterparty!).

 

BlueHorseshoe

[karoshiman 10]

 

... now why would they be foolish enough to continue with a 'cashed out' monthly return of a few thousand for the rest of their lives?

 

...

 

 

 

Because of what I've stated in the first sentence. The cases I know of trade quite often per day and at various times of the day. Given the available leverage they have already reached their limits in terms of trade size. They cannot scale their methodology any further.

[Logic 10]

Yes, and that's basically the point I was making, here and in the other forum: I'm really not interested in hearing about 3% a month unless it's repeated consistently, month after month, year after year. Since no-one does this in practice, I would be happy to hear that you've outperformed the benchmark by 2% on average without major tracking error.

 

People produce 3% a month or better on a regular basis but not trading stocks. Not that it coudn't be done it is because it is easier to produce those returns using the smaller margin requirements in the futures markets.

[BlueHorseshoe 10]

Because of what I've stated in the first sentence. The cases I know of trade quite often per day and at various times of the day. Given the available leverage they have already reached their limits in terms of trade size. They cannot scale their methodology any further.

 

Unless they are trading iliquid instruments then I am farily dubious about this; there are countless short term market participants who trade with high frequency on a scale that dwarfs anything that could be achieved with a million dollar account. There are very few limits on scale-ability in liquid markets nowadays - you could flip a few thousand ES contracts back and forth all day with no problems (someone please correct me if I am wrong about this).

 

Of course, if the people you're referring to are, say, market makers in single stocks, then I understand what you're saying.

 

BlueHorseshoe.

[wrbtrader 10]

...As for the second sentence . . . I'm sure you would agree that to consistently generate 20-25% per month you'd have to be pretty damn smart? Would anyone who was this smart not be able to perceive the advantages of compounding and exercise the foresight to implement it? At the rate of return you describe, someone with a $20,000 could retire as a multi-millionaire within a few years - now why would they be foolish enough to continue with a 'cashed out' monthly return of a few thousand for the rest of their lives?

 

If you really think about it, it just doesn't make sense...

 

Some traders have families to support and are the primary wage earner let alone tax issues. Simply, a young trader with no debt while still living at home with mom & pop is more likely to be compounding in comparison to someone with debt and sending the kids to private school.

 

Thus, the young single trader in comparison has a much better chance of compounding in comparison to someone that has a family to support. In addition, throw in some realities like a divorce, serious family health issues at some point in a trader's career and the revenue service wanting their share...

 

I think you get my point.

 

You must be single and/or with no family and/or not the primary wage earner ?