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Market Wizard
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Everything posted by SIUYA

  1. forget about small traders....they make up such a small percentage of the market its ridiculous. Then you get into the world of of smart beta, factor investing and outperformance, active v passive investing and you will see the worry about 95% of the retail money that is lost in the markets is 0.000001% and irrelevant....and the money disappears into the closed shop that is the world economy and if it wasnt for growing populations and inflation and growth of tech etc; we would simply be transferring it from person to person....but its bigger than that. if you look at it from a different angle (and this has been rehashed time and time again) its a numbers game of only a few survive and thrive in any industry, and that may be to luck, timing, skill or shear who knows what. All the money ends up in the hands of those who either know how to extract just enough via arbitrage, or they know when to get out, or they extract enough for their size they are exploiting their advantages of being small and nimble and not having to trade. Even the great traders usually know that when makrets get tough they should get out for fear that when the tide goes out they dont want to be exposed if you hang around long enough. Haha....cynical I know.
  2. when I read this I had a laugh and googled "images for people on camera phones" Nothing funnier than watching people film something they are watching live, rather than experiencing it. Maybe I am old school....buy the DVD for later and enjoy the moment...... but often we choose not to think about what is happening around us.
  3. only if you want to trade for losses. I know your choices here are between taking a trade and regretting it or not..(hindisght is bitch).....but unless you thoroughly record every potential trade including those not taken (and this cant be trusted in hindsight) you have no idea about which ones becomes 'bad; or 'average' trades. You say "So in order to eliminate the average ones I ask myself Am I willing to lose on this trade? " Every trade you take you are deciding to risk a loss. That is a given. As you have a 'system' and within this system a measure of discretion....ie;.you chose to take or not to take certain trades and the fact you have profit targets also indicates you have thought about what this trade might expect to make (or is this some random element?) so --- as an alternative to simply asking --- am I willing to lose on this trade, you could also (or alternatively ask) is this trade good enough in its idea that i would be willing to lose multiple times, BECAUSE there is enough profitable reason for the trade. as you say... "If you are not preparing yourself to the possible outcomes you are illusioning yourself in more than a way"
  4. alternatively, work out how much you think you should make on the trade, and if its worth risking a loss multiple times on the same trade. This might give you more insight into why you want to enter in the first place. Otherwise you will simply still take the losses and not make enough back to cover those.
  5. heard on TV the other day.... when someone tells you how disappointed they are in something ....tell them it could be worse. You could have the disappointment of being an egg. . . . . You only get laid once, You only get smashed once and the only one who ever sits on your face is your mother.
  6. today its my wife! Yesterday she claimed it was me. ...............more seriously. I think its a recurring problem in world history but I think this reverberates across a lot of issue these days and is getting worse. (it could arguably be applied to politics, religion, personal life...etc) The issue boils down to one of shifting risk and not taking responsibility. This is largely a result of corporatisation (and dont worry I am a capitalist also) and the the fact that now you have corporates that have more rights than individuals, more power than governments, individuals within the companies that have little personal responsibility, get paid for failure and basically have to answer to few people.....I could go on, but I think you get the message....and yet I dont advocate govt doing a better job. No accountability. This has resulted in compliance gone crazy and everyone who can writing 50 page legal documents saying all care no responsibility and f..k you if it goes wrong because ultimately some other sucker will end up paying. (not sure where this rant is going as i am enjoying the day , but this is an issue I am seeing more and more these days. Maybe I should just join the boat...anyone wanna buy a bridge?:rofl:)
  7. No - I am living in Europe now. (worlds greatest feminist - moved for my wifes job) Sorry to have missed you it would be good to meet in person....show you the harbour and go for a cold refreshing ale. If you like walks and have the time - I recommend Bondi to Bronte..something I miss. Re books, it sounds similar to something I have just re read "the righteous mind: Why good people are divided...." by Haidt. Talks about the elephant/rider = emotion/reason divide. (but more a focus on 'morals'..... a good reminder. As I get older I get more contemplative as well as cynical. but its all related.,,,and back on topic it does make you understand why one person can feel bullish and the other bearish even when looking at the same thing.....gut feel maybe and then we apply reason.
  8. I dont know about smell idea except the 'he just shit/pissed himself" or the "I am going to retch in a bucket"......but it probably has some creedence. However given we generally use our sight and gut reaction first it might have just been a fart. As to reducing the amount of crashes.....nope. computers might not smell or hear fear but they certainly react. ala.....2008, flash crash etc; more they change the more they stay the same.
  9. 100% correct. even " " " professionals " " " often dont get this or deliberately choose to ignore it. read black swan, infallibility, when genius failed - get it or ignore it.
  10. I just figured any one of my answers could be used to answer any of the questions....sheer coincidence there was 5 answers and 6 questions (or was it spooky mulder, or the SNB who caused that outlier).
  11. fly fishing or golf. neither is a team sport or has an opponent (and if you count a fish as an opponent then you best not try trading):doh:, and they are totally rigged against you.
  12. an autobot. the 'man' the global elite aliens all of the above.
  13. Interesting distinction between PM and traders..... there is certainly a lot of difference between those who make portfolio decisions, those who execute for PMs (I dont count this as trading though many pretend it is), those who trade for a firms capital, those who trade for themselves, those who invest for themselves, market makers and HFT who take an edge, or other 'traders' who have an inbuilt edge either via order flow, high fees etc. As for Oz - been a while since I was back there working so it might be different in some firms now however, there was all sorts (relaxed, aggressive etc) , idiots, dreamers, realists, managers who had unrealistic expectations....usually not as aggressive as maybe Wall st as most Americans in NY can come across as pretty agro normally compared to some. Part of the winner takes all Americans have maybe (too many generalisations I know):doh:
  14. too many variables and not enough specifics to work this one out apart from saying - develop something (a plan) that will only trade one direction on your scenarios.....ensure that when you are wrong you dont get too bably burnt, but when you are right you maximise the upside form it. Reason being - the markets will stay irrational longer than you can stay solvent.....and if like me you believe you cant predict the future, most of it is simply luck and being in the right place at the right time (think CHF yesterday), then 50 year predictions are for the strategists....not the traders. as to how to invest.....if you think these things will trend - invest in aggressive trend following funds, or try and time it with long options (extra leverage, a stop loss) or optional investments related tot he idea. eg extreme oil shortages.....buy weapons manufacturers. For black swans - good luck......
  15. Oilfx why not place an add Wanted - 30 babies for a trading experiment. Come back in 30 years to see if it worked. (you might become a rich parent) ..................... Rande - was the firm on wall st you visited a market maker or HFT with the aim to win on every trade - or simply trying to instill a competitive and darwinistic mindset.....which I dont think works well when day trading (unless it about gaming others and being competitive and fighting others for the edge of HFT or market making)?
  16. the regular programming never stopped with the belief that gold is king and there are no alternatives. ....as for the Russian example - please enlighten us as to how to preserve wealth by non trading or swapping . The trade mentioned was an FX trade - class 101. The wealth was preserved because the ruble tanked not because gold was a great investment. Anything other than Rubles might have been good. Diversification is still probably the best wealth preserver but most of us dont have 6000 years. :doh: 2 other thoughts... 1) I like the Walking dead (more for the moral dilemmas it raises) - why dont these guys talk about their store of gold. Even experts in Zombie apocalypses dont put all their belief in gold. 2) Given its Christmas - what happened to the gold the baby Jesus got on his birth?
  17. on the other hand.... is there a currency that gold has been going up in in the last 1-2-5-10 years? Gold can certainly have a bear market - any one who thinks it cant does not understand markets. If you are based in USD and own USD gold at price X and it is now worth less than X = loss. It is like any other store of wealth - except it has been better than some over the long term....far worse than others. the example of the Russian trade is simply an FX trade - not a gold trade. Everything is a swap! Eventually we die, just as fiat currencies eventually dwindle. In the meantime......paper scissors doh! Non-Gold Safe Haven Assets - Business Insider have a golden Christmas and a diamond new year.
  18. Zdo - if you think that most of the traders who dont make it fail because they dont acknowledge certain fundamental things - such as the emotional gain v pain of winners v losses....when you read the article, you might find that this is exactly what a coach might help point out. That in the stats there are certain emotional triggers or reasons a trader has gone from winner to loser....or is in a slump. Now many coaches might not actually be good at pointing that out, recognising it or being able to provide a solution to a trader....sometimes a coach is not what you need. You are really commenting then on the quality of coaching. Like every profession there are good ones and bad ones, suitable ones and unsuitable ones for certain styles/strategies and personalities. Scammers, snake oil salemen and those that pitch to the amateur v professional (Hence my then linking of items that require first a definition of what your are trying to get at....what game you are playing and who the opponent really is.) ultimately this profession requires a commitment and a real motivation to make it work. Even in sports if the motivation aint there, a coach might be able to bring it back, but all the talent in the world without the real motivation and drive --- which can be lost over time....wont save you. Note: a lot of drive and motivation from some is simply wheel spinning and searching for answers rather than asking questions.
  19. "You know (don’t you?) that with that link you just argued with the bottom of your OP" I see your point. my point on this is more related to the idea that - what many see as trading is in fact market making or making money via commissions or other. This is different to being a monopoly, (related maybe yes) or being an outright scam. Those that think the 3% consists of these guys, or that these guys are out to get you, or that the 3% are out to get you...are wrong so often the cross talking blurrs the lines especially for the retail punter. However, for many large trading firms as well, I have always argued that there are very few who actually 'trade' as such anyways. So the numbers probably remain the same..... the ways of making money as Thiel points out is not so much in joining the crowd with 'disruptive new tech - its about finding a monoploy edge - get rid of the romance of mastering the market.....simply focus on making money, then offering marketing lip service and a sales pitch as to how you make it. The smart money is not out to out trade you it simply sells you the pitch. You either become a muppet or not and that is a matter of costs and business and not so much to do with trading. ...... so getting back on the original post of the discovery of coaches....imho it is much the same. jingoistic etc. + academic. As to how to get to the 3% - been said before. start with a plan, work it out, tailor it to yourself. blah blah....do that then maybe you have half a chance if you dont have some natural inbuilt talent....and even if you do all the above then maybe thats when a coach might help when in a slump. (I think this is the part that relates to your point of 80%++ hit rates if I read you correctly) To me - The 3% - dont involve those in monopolies, or sales and they are not out to get you in the way you think. They do their own thing (even though others believe its a ll a dog eat dog world that mindset is not where the money is made for those traders who succeed.) They are also not simply a random selection as a result of large numbers....there is some consistency there, and if it is simply luck then we are all scrwed....and I would take luck overt talent any day. it is all talking sub-sets that confuses the issue. (hows the writing going?)
  20. maybe it helps to think about it this way.... as the trade you are doing are swaps....bets based on relative movements, you dont actually need the actual dollars in the account. You simply need enough funds for margin. This is not like shares where there is a fixed amount of shares per company available and there is an actual transfer of ownership. or it is like betting on a horse. you dont need to own the horse, the race course, the feedbag or to even be there. You simply need to be able to provide the funds to bet on a particular outcome.
  21. there is no one answer. many use 60-90 days as it 'reflects' the time frame of the options they are trading in. folks often look at 'volatility cones' to gauge where they are relative to various historical time frames.
  22. kinda reminds me of Peter Thiel - Peter Thiel: Competition Is for Losers - WSJ dont try and compete unless you have an uneven playing field or some exceptional talent.
  23. Everything in options is about relative values and risk transferrance. Simply saying something is cheap or expensive is pointless. you need to say its cheap or expensive compared to ......historical volatility,or next months options, or front month options or based on certain parameters in what ever model you use. Certain options are relatively cheap/expensive based on supply and demand as well. There are many factors. This is why people use models to help determine relative values....regardless of if the model is right or wrong or does not necessarily reflect reality or supply and demand at present. no....implied volatility basically reflects the markets view on what future volatility will be - not necessarily what sentiment for direction. Think about these scenarios....a very volatile market that really goes no where, or a trending market with low volatility (like now). These are different things and might not reflect each other, plus there is as Seeker mentioned the actually supply and demand for the risk transferrance that options provide. You might have a lot of bulls who are selling calls...and /or puts but are still bullish. Too many scenarios exist to make general rules and assumptions.
  24. its simple - if you buy the call for 98c you need the call option to go up in price so that the bid is at least 98c. What makes the call option price go up....? - changes in the underlying price --- the stock price rises (delta changes) - changes in the underlying volatility -- the stock becomes more volatile (volatility changes) - changes in any dividend assumptions or other parameters -- but you should ignore this for now. I would say for a 90c option that the bid ask spread is quite large. You need to pay away something for Market makers to make money and want to provide liquidity and so the mid price is a reasonable level to try and buy the option to reduce this and then move it around - think of it like a negotiation. This will reduce the cost of the option.
  25. dont reinvent the wheel there are plenty of option price models in Excel out there and all you need it the input parameters. You dont need massive amounts of price data. You would be better understanding what makes the cheap or expensive and then seeing if you scan for those
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