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PositiveDev's trading journey


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I've been spending a lot of time recently on some research relating to the financial markets, it's based on the principle that people are hardwired to look at things in a certain way, and on that basis will miss things that they otherwise might have picked up on. For example, polar opposites, on/off, black/white, up/down etc. The world is not categorised in this way, only we make it so. And in doing this I believe we become polarised to the polarised perspective, and therefore we miss things we otherwise might have picked up on. Actually I prefer not to post too much detail as I've had the rather unfortunate experience of coming up with ideas only to have someone else take them, and gain credit for them.

 

I managed to quantify an interesting relationship in the markets, it must have taken me several weeks to do this now, it involved essentially creating a new way of doing something, that certainly isn't in the public domain. In some ways I view financial markets very much like the planet earth. Most of the planet has been explored but certainly not all of it, and it is this as yet unexplored aspect that I am interested in. I'll never forget the day I was reading some leaked "analysis" from Goldman Sachs and I was thinking as I read it, "Is this it! Is this the best they can come up with, surely someone can't be getting paid $70K/$100K pa for this!". It just seemed so backward to me, what they were doing. Coming back to my recent research, earlier this evening I've shown that it's possible to gain 1.44% over just under 4 weeks by exploiting a relationship between equity markets, that is perhaps little, or not understood at all. I'm slightly different to most people, I will just try something, without having an opinion on whether it will work or not, with the bonus being that if it doesn't work, well I don't really care that much, at least I know what the situation is, but then if it does work then perhaps it's something that can be exploited. Or perhaps not. There's a lot to be said for just trying. I have this new idea, that I've tried to at least give a very general view of, that I may be able to exploit in the future. Then I have a new trading strategy that I'm testing too, that hopefully will form the basis of my new general approach to the markets. It's Friday night, it's quarter to 11, and here I am again, thinking about the markets.

 

Sometimes I think I should be working for a hedge fund or something like that...

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Sometimes I think I should be working for a hedge fund or something like that...

 

It is not quite the "happy hunting ground" for jobs that it once was.

Returns made by the average hedge fund have been pretty mediocre, and some are closing.

Others are cutting back on staff.

 

It might be a smart contrarian idea to consider careers outside finance

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Zerohedge;

 

 

 

 

"The Strange (and Worrisome) Symmetry Of Bernanke's Bull Market

 

 

 

Sometimes a picture paints a thousand words. In the case of this chart, it paints an expectation of around 300 S&P points (to the downside). The strange symmetrical exponentiality of the last four years can only be marveled at in its reflection of greed and fear catalyzed by the machinations of an increasingly impotent central banking cartel. Trade accordingly.

 

20121112_SPX1.png

 

The irony of the coincident timing of the plunge and the pending fiscal cliff decision - which as we noted here, will not be solved until the market pushes the politicians to 'compromise' - should not be lost on those who poo-poo such silly chartist ramifications..."

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3750.png

 

I'm aiming for 4000 by christmas, then maybe take a break for a week and enjoy the festivites!

 

Getting closer...

 

Keeponrunning.png

 

That was my 500th run earlier today! I now do 16K per run (about 10 miles). So this is purely a big myself up moment (again!). I need to do another 12 runs before christmas to hit the big number, 4,000. It's definitely do-able.

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Warning:

 

Too many marathons can kill

 

Telegraph.co.uk - ‎2 hours ago‎

Fitness fanatics should do “just one or a few” marathons or full-distance triathlons, say the cardiologists, because over-exerting the heart for years can lead to long-term damage.

== ==

 

PD,

I used to run (& cycle) a lot.

Now I suffer from bad knees, bad ankles

Do be careful

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The longest distance I do is 21k, half-marathon, I don't think I would enjoy running for over 3 hours. I probably will tone it down slightly since I could feel a slight tightness under the arch in one of my feet for a couple of days, although it's gone now its probably a sign of over use. My Christmas target would be nice but is ultimately pointless.

 

Regular distance running does give you an amazing sense of well-being though, in that sense I suppose it's quite addictive. Part pf the reason I run is to strengthen my cardiovascular system, since my grandfather on my father's side died of a heart attack at 67, I would like to last well beyond that. I used to swim a lot, but it's much more time-consuming and more of a fuss to go for a swim. I've gone from swimming to cycling, now I only run.

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Turns out that Mrs PositiveDeviant is going to be famous across the Middle East and North Africa...........................well at least for a few minutes anyway. Some of you may recall that she took part in a NASA project called Planethunters.org, and as a result found a new exo-planet. Due to this she has received some interest from journalists and whatnot, there was a documentary made about her and another scientist who found a planet using gravitational microlensing. Anyway that was a while ago, today a Saudi Arabian journalist for BBC Arabic, Aneesa Al Qudaihi came round our place, along with his cameraman to interview her for a technology show that apparently goes out to 25 million across the Middle East and North Africa, it called '4Tech'. It's about the technology behind Planethunters.org and the citizen scientist movement. I'd never heard about '4tech' until recently, but of course it's broadcast in Arabic. I would imagine it's probably similar to the BBC's western tech show called 'Click'. I'm sure many of you will have seen that, I sometimes catch it of a Saturday morning.

 

I had another engagement today so came home 30 mins too late to be able to meet him, a shame, he was talking with MrsPD about how he covered the Arab Spring, having travelled widely throughout the Middle East, the internal situation in Iran, Iran's relationship to Russia etc.

 

DSCN0078.jpg

 

Anees is off to Paris tomorrow to interview a guy from NASA about Curiousity (someone in charge of the software apparently). Mrs PositiveDeviant has put in a request for a question to be asked;

 

"Why is it taking them so long to announce life on Mars?" lol

 

 

 

 

Excerpt from extremetech.com;

 

 

"Inside NASA’s Curiosity: It’s an Apple Airport Extreme… with wheels

 

 

 

Late last night, Mars Science Laboratory (MSL) Curiosity successfully navigated its way through Seven Minutes of Terror andtouched down on the surface of the Red Planet, heralding a new age of extraterrestrial exploration that will eventually result in the human colonization of Mars.

mars-curiosity-hazcam-image-300x300.jpgThe first photos from Curiosity are starting to trickle in (right), and very soon we’ll start to see scientific data gathered by Curiosity’s on-board science lab, so I thought it would be a good time to discuss the hardware and software that actually makes MSL Curiosity possible.

Hardware

 

At the heart of Curiosity there is, of course, a computer. In this case the Mars rover is powered by a RAD750, a single-board computer (motherboard, RAM, ROM, and CPU) produced by BAE. The RAD750 has been on the market for more than 10 years, and it’s currently one of the most popular on-board computers for spacecraft. In Curiosity’s case, the CPU is a PowerPC 750 (PowerPC G3 in Mac nomenclature) clocked at around 200MHz — which might seem slow, but it’s still hundreds of times faster than, say, the Apollo Guidance Computer used in the first Moon landings. Also on the motherboard are 256MB of DRAM, and 2GB of flash storage — which will be used to store video and scientific data before transmission to Earth.

BAE750-300x206.jpgThe RAD750 can withstand temperatures of between -55 and 70C, and radiation levels up to 1000 gray. Safely ensconced within Curiosity, the temperature and radiation should remain below these levels — but for the sake of redundancy, there’s a second RAD750 that automatically takes over if the first one fails.

Software

 

On the software side of things, NASA again stuck to tried-and-tested solutions, opting for the 27-year-old VxWorks operating systemlb_icon1.png. VxWorks, developed by Wind River Systems (which was acquired by Intel), is a real-time operating system used in a huge number of embedded systems. The previous Mars rovers (Sojourner, Spirit, Opportunity), Mars Reconnaissance Orbiter, and the SpaceX Dragon spacecraft all use VxWorks. VxWorks also powers BMW iDrive, the Apache Longbow helicopter, and the Apple Airport Extreme and Linksys WRT54G routers (really).

I said that VxWorks is 27 years old, but that’s a bit unfair: The initial release was in 1985 (around the same time as MS-DOS 3.0), but it has been in constant development since then, reaching v6.9 last year. Why does Curiosity use VxWorks? It’s reliable, has a mature development toolchain, and presumably its low-level scheduling and interrupt systems are ideal for handling real-time tasks like EDL (entry, descent, and landing; aka, seven minutes of terror)."

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Excerpt from businessweek;

 

"Bond Investor Gundlach Buys Stocks, Sees 'Kaboom' Ahead

 

It’s mid-October, and Jeffrey Gundlach is giving a stump speech to a luncheon crowd of about 200 financial advisers and investors at Los Angeles’s City Club. The renowned money manager’s theme: the financial catastrophe on the horizon.

The co-founder and chief executive officer of DoubleLine Capital LP explains that the first phase of the coming debacle consisted of a 27-year buildup of corporate, personal and sovereign debt. That lasted until 2008, when unfettered lending finally toppled banks and pushed the global economy into a recession, spurring governments and central banks to spend trillions of dollars to stimulate growth, Bloomberg Markets reports in its January issue.

In the ominous third phase, he predicts another crisis: Deeply indebted countries and companies, which Gundlach doesn’t name, will default sometime after 2013. Central banks may forestall these defaults by pumping even more money into the economy -- at the risk of higher inflation in coming years.

Gundlach, 53, doesn’t know when the third phase will get here, but he tells his audience they need to gradually get ready for it.

“I don’t believe you’re going to get some sort of an early warning,” Gundlach, who’s also chief investment officer at Los Angeles-based DoubleLine, tells his listeners. “You should be moving now.”

Gemstones, Art

 

He recommends buying hard assets: Gemstones, art and commercial real estate are high on his list. And DoubleLine has been buying the stocks of Chinese companies, U.S. natural gas producers and gold-mining firms because it considers them to be bargains.

Gundlach himself has amassed a contemporary art collection of about 100 pieces, with works by Jasper Johns and Franz Kline. The money manager drew on abstract painter Piet Mondrian’s double-line style for the name of his firm and its geometrical, crosshatched logo.

Gundlach, who correctly predicted the subprime mortgage disaster, has a proven record as a prognosticator -- and the performance numbers to go with it. At his former firm, TCW Group Inc., his Total Return Bond Fund earned an annual average of 7.9 percent in the decade ended in November 2009, according to data compiled by Bloomberg.

His flagship $35.8 billion DoubleLine Total Return Bond Fund (DBLTX) gained an annual average of 13.2 percent from its inception in April 2010 through Nov. 28, topping the performance of Gundlach’s more famous neighbor to the south, Bill Gross.

Topping Gross

 

The co-chief investment officer at Newport Beach, California-based Pacific Investment Management Co. earned an average of 7.6 percent during the same period in his much larger, $281 billion Pimco Total Return Fund. (PTTRX)

Gundlach’s performance convinced Andreas Lehmann, chairman of Luxembourg-based Alma Capital Investment Funds, to hire him to manage a fund for European investors. “Ultimately, what matters are the returns over time, and on that count, Jeffrey stands out,” Lehmann says.

.........................................................................."

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Kapoom!:

"In the ominous third phase, he predicts another crisis: Deeply indebted countries and companies, which Gundlach doesn’t name, will default sometime after 2013. Central banks may forestall these defaults by pumping even more money into the economy"

 

Prechter thinks they will never get the chance, and will not move quickly enough

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Rydex.png

 

Rydex funds are good contrarian indicators, www.sentimentrader.com highlights a very strong divergence between the NASDAQ 100 and Rydex bull/bear ratio. With Rydex sentiment so low this is typically bullish. Note that the previous divergence between the NASDAQ 100 and non-levered Rydex marked the previous low at the tail end of July.

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Interested in your "debate" with Romans on ZSIL. If you was looking at the chart today, what would your current trade target be, if you have one that is? Personally trade LSIL, because a bit like R.H, I'm being lazy to complicate it any further and it's simple and easy to trade. Any thoughts?

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I don't have a target and haven't been involved with silver since I got out a long time ago, actually my theory was that gold would continue higher and that silver would not follow.

 

I really need to get back into the trading...I seem to have drifted away from it for a few months.

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I don't have a target and haven't been involved with silver since I got out a long time ago, actually my theory was that gold would continue higher and that silver would not follow.

 

I really need to get back into the trading...I seem to have drifted away from it for a few months.

 

Are you persisting with your short-term intrad-day trading?

 

I don't see how you can expect anything other than a negative edge; you are competing with the HFT algorithms over this timeframe. It's an technological battle that I don't believe can be won by any discretionary system. My philosophy is - instead of battling technology over very short time periods, make it work for you- identify where technology is changing the fundamentals of the industry for the better or worse, and trade with the longer term trend.

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Are you persisting with your short-term intrad-day trading?

 

I don't see how you can expect anything other than a negative edge; you are competing with the HFT algorithms over this timeframe. It's an technological battle that I don't believe can be won by any discretionary system. My philosophy is - instead of battling technology over very short time periods, make it work for you- identify where technology is changing the fundamentals of the industry for the better or worse, and trade with the longer term trend.

 

I haven't been trading for a while. HFTs trade for seconds whereas I have typically been on the minutes to hours timeframe.

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Well my hunch was wrong, that'll be the first and last time I trade a hunch! I've been trading on and off with a new strategy using a SIM account and that's just as well since I'm down on that account.

 

Thankfully I took Jeff Quinto's advice some time ago that until you can make a regular profit on SIM you should not be trading the live market.

 

I'm glad I listened!

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  • 2 weeks later...

3947_zpse1169b99.png

 

Actually it should show that I've ran 3959K but I left my iPod at home for my last run.

 

I had to take a break for a week as one of my feet didn't feel right. In 4 years of running I've never had an injury, probably due to me listening to my body when it says take a break.

 

After my mind and body have had a rest I'll get back to the running and the markets in the new year.

 

Merry Christmas and a Happy New Year everyone!

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