Tag Archives: Quant opinion

Quant opinion: What would you do IF You Have Developed A Very Profitable Trading System On Earth?

Quant opinion: What would you do IF You Have Developed A Very Profitable Trading System On Earth?

Multiple Choices…
1) Keep it for yourself and make your own money.
2) Sell the system to big instituion for a fortune and retire.
3) Sell the system to big instituion for a fortune and or get a high ranking position.
4) Create your own organization or private groups to enjoy the fruits.
5) To fan it out to the public, get them armed against the manipulation of Bankers.
6) None of the above… You have your own idea in mind… Would you like to share your idea…

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Cream it (make money) and teach it to my children.

 

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This is an important question because the answer reveals a lot about your own psychology. My answer is:

(1) Trade it myself and share with children.
(2) Tell anyone interested the methods without keeping anything secret – perhaps publish online.

The reason for (2) is that as the turtles discovered, most humans are psychologically not capable of sticking to a good trading method for a long period of time. So even if you tell others, they will not use it and continue to run after the “latest new strategy” over and over again. Thus by sharing your strategy you will not “dilute” the strategy and make it ineffective, but instead find others like you who are capable of sticking to a winning strategy (minority) for a long period of time.

 

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Fantasy time for Traders.

Of course, one would trade it for himself/herself but the more important question is what if you have made the system but you do not have sufficient money??? That is, how to get the funds for Trading: Banks/VC’s i do not know of anyone who lends to Individuals for Prop Trading.

 

It really depends on how long you think you have before others discover the same system. Ideally you’d get five years of verifiable consistent gains behind you, then it would be worth something.

 

a combinaiton of 1) Keep it for yourself and make your own money.
and 4) Create your own organization or private groups to enjoy the fruits

Keeping the truly optimal performance for myself.

 

“what if you have made the system but you do not have sufficient money?”

If the system is as described (VERY profitable), by definition that means it is a system with a very positive expectancy. That being the case, starting capital is not all that important due to compounding of gains.

 

1) for a while then 2) or 3) but you need money anyway even if it is very profitable how much can it earn?200% per year?if you have 5k after 5 years…
Do you prefer to have 500k and average investing skills or a stellar trading system and 5k?

 

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Let me know if you would like to trade it yourself and are in need of funds to trade with. We specialize in funding strategies and allowing the trader to keep the IP that they have developed.

 

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Post it here and forums, let our power combine!

 

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Some of my strategies are so simple and makes money very clearly, there is no way I can reveal. My option strategy is just 2 lines. It never had loosing month. If I reveal this, it will definetely be copied and will loose edge.

 

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I do agree that simple strategies make money most of the time and there are many such strategies. I also have a very simple one that has made money backtesting for 40 yr and 4yr forward testing up to now. It is called ReadySetGo by Alan Pryor: Longtermtrading.com – Yes I have announced it to the world and you can buy it an get the entire code. It is probably the best trend following system out there. Do I think other people will use it? No. Because it is not exciting or sexy enough, especially for this group. Yet it makes $50K per year based on 1 one contract for the past 40 yrs trading 20+ uncorrelated futures markets and keeps going.

 

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Everyone that has a winning system….I will buy it for whatever profit it makes me in the first year plus a 50% bonus. Payment made once system proven. I have the contracts ready for you to sign.

 

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To maximize the value, my recommendation is like

option1 (1 year) -> option4 (2 years) -> option2 (exit)

 

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Great question. I go with option 4. It makes a lot of sense..and am already in the process of building that close user group…

 

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Our choice has been option4. License the system to a limited number of Hedge Funds.

 

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Dole out to the public and let the fear-greed cycle take its own course…

 

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i will go with 1st for medium term
than i will switch it to no.4
next step woulb be no.5 and
finally i will go with no. 3….

 

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First you tell me have you really developed such system?
Then only I apply my mind.

 

 

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Quant opinion: Is an exchange like CME or Interbank a zero sum game between the traders involved?

Quant opinion: Is an exchange like CME or Interbank a zero sum game between the traders involved?

Lets say on the long run.

What about commissions?

 

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With or without commissions, is the bulk of money held in open positions a zero sum game between the traders involved in the exchange on the long run?

 

What is the reason of your posting? Do you mean that CME acts like a market maker to traders? No, it doesn’t. But any market is a negative sum game, not zero sum, thanks to commissions paid to the exchange.

 

commissions and other fees aside, is the rest of the money in open positions a zero sum game between the participants on the long run?

In other words, someone has to lose money for someone else to profit, how true is this statement?

 

The reason for this post, I want take an opposite approach of researching losing patterns that are generated by systems be it human or program, for use as indicator in the trading system.

Therefore knowing to which degree trading is a zero sum is crucial to this idea.

 

Set aside commissions, any exchange-traded market is a zero sum game. For
OTC markets I am not that sure.

 

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For OTC, it depends on the security. Bonds for instance are not zero sum as there is a coupon payment and theoretically one can hold the position to maturity and be returned invested principal by the issuer. Stocks/ETFs/Indexes also pay dividends which again is not zero sum though there is no end payout.

 

 

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Quant opinion: Do you think education is one of the best defenses against stockbroker fraud?

Quant opinion: Do you think education is one of the best defenses against stockbroker fraud?

 

Investor FAQG: How do Brokers Buys and Sell Stock? wallstreetfraudblog.com

Education is one of the best defenses against stockbroker fraud. Therefore, we want to provide our readers with a brief overview of how brokers execute an order to buy or sell stock.


What do you recommend for the average American that has lost her/his stomach for hedging, high frequency trading and short selling, or has come to the conclusion that the equity markets are stacked against them?

Is it possible to buy and sell equities out of a 401k or IRA account on a stock exchange that prohibits hedging, high frequency trading and short selling – market mechanisms that allow traders to leverage hype and fear mongering to make a quick profit at the expense of the average American

 

 

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Quant opinion: Complimentary Trade Magazine Subscriptions & Technical Document Downloads

Quant opinion: Complimentary Trade Magazine Subscriptions & Technical Document Downloads

You can request complimentary subscriptions of Business, IT & Risk related magazines such as CFO, Risk & Insurance, Global Finance, Bloomberg Businessweek and many more at the GlobalRisk Community site. All are absolutely free to professionals who qualify. You can find more details via the link below. Registration to the site takes only 1 minute.

Global Risk Community globalriskcommunity.com

Join the world’s premier risk forum and community for executives, service providers, entrepreneurs and propel your career to a New level!

 

The new subscriptions include: Fierce Finance, Origination news, The Superstar CFO and more

 

A new research on Strategic Profitability Management and Managing Costs More Effectively
Both papers are pre-released to GlobalRisk Community as a participant in the exclusive SAP CFO Intellectual Exchange Network.
Participation in this network will provide our members early access to pre-released research, white papers and other high value content. As a member of this network we got an early access to the following research: Strategic Profitability Management and managing costs more effectively.
Please go ahead, read the paper and provide your opinion, give and ask an advice on the implications of the research on your work.
Also available are direct access links to three recorded webcasts.
(Registration to the site takes only 1 minute) via the following link:
http://globalriskcommunity.com/forum/topics/strategic-profitability-managem

 

 

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Quant opinion: Has Goldman Sachs lost is magic touch? telegraph.co.uk

Quant opinion: Has Goldman Sachs lost is magic touch? telegraph.co.uk

With forecasts of a third-quarter loss and exposure to a gloomy world economy, is all is well at the bank some love to hate ?

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Seems that during 2006, 2007 and 2008 Goldman gave the impression that they were doing great. Yet in 2009, Goldman hit an ice berg (not sure whether it’s the same one that the Titanic hit), and found itself within a few millimeters of tansforming into a Lehman look alike. And quickly transformed itself into a bank, to be on the in with the Feds, you know, to exert pressure on them to bail out another loser (AIG thanks to Hank Greenberg).
So, Goldman accepted a couple of Billion of $$$ (untl they sort out things), and now they don’t like the new regulations, so they will transform back into a non bank.

They should be made to pay a fine of say $550,000,000

Lesson learned…..

Love to see Johnny Depp in a new sequel for the Pirates of Wall Street

 

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The only way Goldman was able to make huge profits, is with it’s “Touch”, which with the new (more honest) regulations, their deceptive touch will not produce these huge profits.
Amazing, Casinos are better regulated than banks. Casinos can tell you their position at any given time of the day/night.

Question: Will Goldman’s CEO sell Goldman during the next 18 months ? or before the euro disappears ? Time for a golden parachute !

 

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Goldman “sacks” USA financial stability 2008 and continuing….taking care of their own and the so called “best of breed”. AHs and big boys. BOYS of Wall st. W illegal help from paulson, geitner, bernanke & co. Snowed congress and robbed us all blind. I think they should be made to split up. Divest allassets and give back every DIME the profited on in every single CDS they had out when there was a counter party /client. Old chinese wall conflict of interest!!!!! Thst would prob cut our natl debt in HALF. Special rules for GS? Nahhhh the truth will b coming out for yrs to come…ask watch DYLAN Rhatigan. An ex colleague of mineand felliw smoker at mike Bloombergs company… I sold our system to hedge fund spin offs and the cantor fitz machine… Cds. Make them illegal. NOW

 

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The people r too big to FAIL. But we need a leader like tony BLAIR and HILLARY. Or anyone w vision. And financial independence fr PACS. Pray for a team of men/women who dont come fr wall st or legal system. And see the truth. How things can be in thus world of blind pool terrorism, sneaky cells abd money or the tails wagging the dogs!!!we need leaders w vision. FAith. Guts of steel. Preferably someones who hv transcending pain/loss/ tradgedy/. And came our free alive and humble to gods grace. Ya like a mariano rivera type of person. Or jyst someone who listens keeps it SIMPLE and does the NEXT RIGHT THING. FOR THE GOOD OF all. Like robert kennedy bVut patiently and sans dad JOE. Is someone(s) our there willing to step up to to the PLATE?

 

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Need to reign in the FED… Give longer terms to congress and or pres, remove special interest lobbys, NEW. PARTY. Center. Centralists. Who r u. R u there??run an elwction on FB. Lol. No really. No $ needed

 

 

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Quant opinion: European Equity Markets

Quant opinion: European Equity Markets

I am creating an algo for US equity, I would like to expand to Europeans. Which markets have highest liquidity? London?
Do they have similar market internals such as tick, trin, a/d line, vix? I guess one can calculate them if they are not avialable, but it would be nice to know if they are their.

 

 

Xetra in frankfort

 

 

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Quant opinion: Trading as Game (Man against Machine)

Quant opinion: Trading as Game (Man against Machine)

Ever played this PS3 game Call of Duty or any other first person shooter against kids 13 to 18 year old? they will kick your ass.

They are very accurate and behave in certain patterns that gives them an edge in aiming, walking sprinting hiding crawling, choice of primary and secondary weapon, weapon add-on, … even though the game is very complex in terms of inputs and expected outputs, more complex than looking at price action as a single dimensional brownian motion.

They have a game plan, very similar to trading systems we develop, they move from game to game and adapt in few days through trial and error until the game inputs and outputs are mapped in their minds and they can choose the optimum decisions that make them win.

If we convert price action, equity and risk into a visual game challenges, then introduce such challenges into current games out there, so the challenge will be dependent on a live price stream, I bet if we record the professional winning players actions that they can beat any algo trading the same asset in the same time period.

Then add the collective decisions of thousands of professional players, I bet the average result will outperform quants.

Human have been able to create amazing things using their five senses, cultural traditions attach an action of festivity to any occasion in order to involve all senses, because we feel most that way.

But in trading the whole thing is a matter of numbers, and we are very bad about calculating complex probabilities using our brains, so we invented mathematics so we can write it down and reuse variables, so we created equations. Computers helped speed things up especially analysing large amounts of data in short periods of time.

Yet no matter how sophisticated your quant may think they are, their outcome is pretty linear if we compare it with what humans deal with on a daily basis from situations of complex probabilities like driving a car and making a cup of coffee, those actions seem simple to us but the fact is that our daily life is way too complex, yet we are too advanced and accurate when we are allowed to use all senses.

If price data is translated properly into an engaging visual game challenge like what the makers of COD did, those kids will take your money and call you a Noob!

You probably can learn from the trading patterns generated by advance players in response to price action.

Experimental finance.

http://www.urbandictionary.com/define.php?term=noob

 

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Great insight into crowdsourcing. They’re already doing this with protein foldinghttp://fold.it/portal/ (abet proteins are much easier to represent visually). I think what you’re trying to find is a bijection function which makes the finance IO data more palatable to humans. There’s research along the same lines in encoding problems chemically to have bacterial evolution solve them but the hurdles for any practical application is far off.

 

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Developers for the last 10 years have created so many interactive visual engines like ATARI, Nintendo, XBox, PS3 and PSP and endless number of amazingly engaging games from strategy from Age of Ampires to Call of Duty and Battlefield, but the finance world is stuck with OHLC charts and all types of Moving Averages, the learning curve to feel probabilities from such rough indicators is steep and requires years of observation, which is why personally I can’t sit on my PC and trade, just like 90%+ of humans I am lousy at calculating in my mind.

The application of price movement to game console is doable, of course it may not replace research but such application are way superior to charts and other visual indicators.

Maybe it is time to convert market to game and give the masses of loser daytraders a chance, but thinking again, maybe I don’t want those vicious focused 15 year old mother ******* on the other side of my trades, few weeks ago I was leaving work and I played COD at the cafe near my house, I couldn’t even get a 12 kill streak, other than the feeling of being a grown man wearing a tie playing game.

Anyway I revert back to the forex market maker story, those guys take almost all the other side of client trades in a zero sum, their only sort of risk management is hedging against large client positions few times a year, their clients do all the trading and eventually lose to them. This is amazing because if you look at all the trading happening from the market maker point of view, this is a real trading system just like any other we discuss here, only it is built on patterns of human psychology which makes us bad traders, the owners of such forex shops know very well how clients lose, but they have no idea why, yet they have been making 80%+ for years, their books are almost completely hidden from the finance world due to their loose regulations and bad rep.

 

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I have had a thorough insider look into two of them, when we analysed client trades we found that it is not simply a matter of inverting losing positions into profitable ones, the pattern we saw was very similar to trades generated by trend following systems, clients make money in sideways and lose it all and more in trends, therefore market maker lose money in sideways and make it all back in trends.

Other characteristic is that clients account naturally vary, majority are between $1000 to $15,000 and lesser with larger sums, clients with $1000 trade smaller timeframes than clients with $100,000, this is all happening naturally, now look at this from the market maker point of view, you can see clearly that trading is happening at deferent time frames at the same time as traders use hourly charts while others use daily charts of the same security. This is diversification accross time frames, just like in trading systems.

Just to differentiate between forex market maker and exchange market maker, a lot of fx market makers are not even connected to any exchange, they only have price feeds that pour into MT4 servers with virtual accounts for clients, client money is in another bank, they are licensed usually from DFSA or FSA(UK), or some shady american license but operate elsewhere as a call center.

More facts, those guys have no idea about technical analysis, nor they care about fundementals, they lowered their spreads to a fixed 2 pips and removed swaps for Islamic accounts, they give their brokers pip rebate on each trade and liquidation fee when clients lose, that means they enter on a loss at the start of each trade, but they don’t care because their main source of income is liquidation.

The price they are trading against is the same price we all trade against for GOLD, EUR/USD, … so this is exactly outright trading. catch my drift?

If you know anyone working as a dealer for such forex shop, ask them.

I personally have no objection in using unorthodox means to pull money out the market and no moral issues within the limits allowed by law.

 

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Try this Jumping Monkey game, maybe a game needs to be more creative to translate price movement in the background, but you get a feel how you respond to the monkey more than a chart.

http://www.funnygames.co.uk/jumping-monkey.htm

 

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!

Quant opinion: Is there a place for the little guy in algo trading ?

Quant opinion: Is there a place for the little guy in algo trading ?

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It depends on what you mean by “little” 😉

If small in stature but big in capital, i guess so ;-)))

It depends on what and where you want to trade and which strategies. But generally the answer is no. In some permutations of the above it can be yes (or at least maybe).

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There is indeed a way a little guy can compete in algo trading, many small prop shops are 2-3 people with a few good algos and co-located servers. One company I worked with had 5 employees and had a yearly profit of over $5M.

My firm specializes in helping smaller firms compete in High Frequency Trading and Algo Market-Making. The technology is available but you do need the capital, how much capital depends on the trade.

CEO: HFT Technologies LLC
www.HFTTechnologies.com
info@HFTTech.com
773.554.5993
Skype: HFTTECH

 

 

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Quant Opinion: Risk Management and The Rogue Trader cfainstitute.org

Quant Opinion: Risk Management and The Rogue Trader cfainstitute.org

Please join us as we welcome Thomas Coleman, author of the latest publication by the Research Foundation of CFA Institute A Practical Guide to Risk Management as he discusses the $2 billion-plus loss at UBS and provides…

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This isnt rocket science. first of all if you have a massive posn long or short why would that not trigger a flag in the system. ie if someone builds up huge long posn and as they build it up they sell off a “synthetic forward” as a hedge why would no one pick up on that. Whose monitoring the cash movements. It sounds like ubs has no risk management whatsoever

 

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Quant opinion: AlgoTrading Tool or Magic Box?

Quant opinion: AlgoTrading Tool or Magic Box?

Frequently the automatic trading software is viewed as magic box to solve all trading problems and cash making machine, instead of a tool to help in trading. What do you think? Is it an extended hand for trading or an Independent machine for cash generation?

 

It can be very well a totally independent machine which can produce wealth, especially if good risk capital is available.

However, it can often be made work better, by allowing discretionary intervention, but in very specific areas (where the user can’t really spoil the base trading mechanism, but can instead provide constructive input).

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All envisioned trading problems can’t be solved by algo tool or machine. We might require hybrid solution where intelligent algo can run on embeded hardware. Algo code can fuse in ROM and put into a electronic board.

 

In my personal view, I look the trading software as an helping tool for taking decision rather than independent machine as described and many others view it. Would like to get different thoughts on this.

For me this is like driving cars. Can we trust auto driven cars? Where you will sit and key-in the destination point and the auto-driven car takes you to the destination. Yes, we can trust, but the trust comes with the risk of life. OR do we prefer the best in class car that obey our orders through steering, accelerator & break? We drive it and control it.

I agree there is no right or wrong answers… It’s just individual views.

 

Opinions clearly depend on paste experiences. Try this [free]:

http://www.datatime.eu/public/gbot/
<br/>
http://www.datatime.eu/public/gbot/GBotScreenshots.htm

i am pretty sure you will experience yourself what i meant. You will see it creating wealth by itself. Clearly, the human can contribute in many ways (folio selection, discretionary bounds, etc), and different degrees of intervention.

cfr:
http://www.datatime.eu/public/gbot/discretionaryuse.htm

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Agree, all our opinions come from past experience. Thanks for additional details.

 

 

NOTE I now post my TRADING ALERTS into my personal FACEBOOK ACCOUNT and TWITTER. Don't worry as I don't post stupid cat videos or what I eat!