Dow Target 6,617, October 25, 2009: Here Is Why

reply to post by johnny2127


What is your trading vehicle?

You must have seen this coming then earlier this year as did I, are you able to invest in global markets?

reply to post by memarf1


Angle and ROC (rate of change) aka momentum, but on a different scale

If you look into just

1. ANGLE

and

2. ROC

You will need advanced charting software, but I just gave you the golden goose if you study hard enough, GL

reply to post by GreenBicMan


Depends which fund. One trades global markets through ADR's but this has its limitations. The two others are prime brokerage solutions with access to whatever it is that I choose. What I choose is determined by both macro analysis, and proprietary quant strategies I have designed. The quant strategies have some technical analysis built into the equations, but more from RS than anything else. Then I have the aforementioned technical analysis overlay. Some are normal indicators, others are ones I built.

Originally posted by getreadyalready

Originally posted by GreenBicMan
reply to post by getreadyalready

 

Actually I have created my own double stochastic that gauges activity as long as a 30 day period using a 30 min interval, so I think I can

But of course, everything is up for debate on these boards I suppose

... or Global economic partners, or Political fodder and fallout all around the world based on local conditions!

In conclusion, this crisis is entirely new and interesting. No Previous Data is going to be useful in navigating out of this mess, and IMHO, the best approach is to let it crash and rebuild with lessons learned!

There is nobody denieing that this is new and interesting or a really neat event happening that will have a century of research, just like every other "New" recession has had. But to say that we haven't had a world economy and that that is new is just crazy. We traded with China, UK, France, India, etc. all the way back to the 1700's and before. Before the discovery of the new world Europe traded with the far east for centuries, which inevitably lead to the discovery of the new world where Lewis and Clark discovered the Far east had been trading with the West Coast Indians for much longer! We can trace this back to Rome, who traded with the middle and far east, or Alexander who took over most of Asia.

Conclusion, a world economy is NOT a new phenomenon. Do you really think that Rome, or Alexander the Great, or Europe, or any others were not influenced politically??? Your LOGIC is "Flawed".

As for Microsecond Trading, yes that is new. But, it can only truly be a transfer of wealth, and can only affect the "Micro-Second". Yes, it should be outlawed, but the affects are a bit overstated I would say. If anything, it is the Multi-Billion dollar traders that have a much larger impact on the economy, if they sell the market tanks, if they buy the market booms. As I said, it's only an indicator and they trend trade. It is the overall averages that we look at as economists, not the day to day changes.

reply to post by memarf1


I think that "global economy" and this one are a little bit different!

Beads and incense over a 6 month caravan compared to oil and nukes traded in seconds!!

A leader in Rome could make a decision, and people around the world didn't hear of it for months or years. A leader today chokes on a pretzel and stock markets in Asia react instantly!!

reply to post by getreadyalready


Thats fine, so todays economy is faster, but that doesn't mean that it is that much different in the fundamentals. Plus, we don't trade nukes or oil in seconds. It still takes those items months to reach their destinations after months or years of negotiations. We may trade the papers or electronic funds in those amounts of time, but essentially the economies are the same, just today they are faster. The only effect this technology will have is to make us approach some kind of equilibrium in trading.

The faster we can make changes the faster the economy will be affected, until one day there are no more recessions or booms, since every change is instant. If traders still exist at that time, they will simply be Arbitrage trader.

And, trading oil and nukes is no different than trading beads and incents. Its just different disposable goods that people wanted today vs yesterday.

Plus, one could make the argument that the Dark Ages were the worlds longest and deepest depression. Rome fell, took some time to see the effects and then for 600 years everything sucked!

[edit on 8-9-2009 by memarf1]

[edit on 8-9-2009 by memarf1]

Micro-second trading and front running need to be outlawed immediately. This generates false volume in stocks, and hence false interest. Its how people get sucked into stocks like Fannie Mae, Freddie Mac, AIG, etc, when they have no intrinsic value. Those that have the ability to trade 10's a thousands of shares a second just drive up the values and suck other investors in. In the end, it all collapses and its the small guy that loses. This is a flat out predatory strategy, and needs to be stopped ASAP.

reply to post by memarf1


But that gets back to my point that the stock market is not a quality indicator of economics. We do trade oil and nukes in seconds via commodities trading. In most cases the owners of all those contracts never see the merchandise. They just "speculate" and create a profit out of thin air!! This did not exist 200 or 2000 years ago!

Also, Nukes and Oil and Technology are not just the new version of Beads and Incense, because some countries and cultures are still trading Beads, and still bartering locally, and are still trading labor for wares, so that economy never went away! The new stuff just added on top of it, so now we have a huge, top-heavy, falsified global trading system operating outside of the naturally occuring one and dominated by a few "powerbrokers" and governments! It can be manipulated from within, it can be used as a new warfare, and it has destroyed a "free" market!

There is no "invisible hand" the hand is attached to some bankers and politicians!

reply to post by getreadyalready


We definitely do not trade nukes. Their is no nuclear commodity. There are commodities traded that are used to build nukes, but thats the closest thing.

Regarding stock markets as indicators, no I would not call them accurate indicators. Yes they try to anticipate what will happen, but it is much more complex than that. Especially when you have markets where 40% of the volume is driven by 4-5 worthless stocks being traded by computers.

Originally posted by johnny2127
reply to post by getreadyalready

 

We definitely do not trade nukes. Their is no nuclear commodity. There are commodities traded that are used to build nukes, but thats the closest thing.

Thanks for clarifying, I know we don't actually trade nukes, but it was so much tidier than typing "Defense Contractors" or "Weapons Manufacturing Entities"

The thing is, I don't think anyone even 100 years ago, could have foreseen the effect of telephones and the internet!!

I remember having 3 TV channels, and 1 news show. I remember the first fax machine and first cell phone and I am only 35 years old!!

Our economists are going to have to step up their game or invest in a crystal ball if they want to keep up with this runaway train we have today!!

reply to post by johnny2127


hahaha no way we totally disagree on that

HFT gives liquidity to the markets so participants like yourself can get out of positions without getting reamed on the spread, dont tell me you are in that camp too?

Someone will have to show me where HFT was been shown to CHANGE THE PREVAILING TREND

If I need to trade 300 contracts, I want to be sure Im not subject to a .50 cent jump in the ES, thats redic.


2nd statement, is: Can I have a job? lol

[edit on 8-9-2009 by GreenBicMan]

[edit on 8-9-2009 by GreenBicMan]

[edit on 8-9-2009 by GreenBicMan]

reply to post by johnny2127


Wow, so you just use RSI to trade?

Really? Equities?

How much cash : securities do you keep on hand?

reply to post by getreadyalready


Yes there are more commodities and yes many "powerbrokers" are in charge of how things shape up, but the market is still a great indicator of what is happening in the world. Yes there is false hope in some stuff b/c of the microtrading volumes, but economists don't look at the day to day, we look at the year to year.

The fact that more commodities exist and that trade occurs much quicker does not change the fact that the essential fundamentals of the economy are still there. Yes, barter does occur in some cultures today, but that is only b/c those cultures are far behind the others around the world. Barter is extremely inefficient, hence the creation of paper money.

With all of that said, do you really think that the markets in history were not manipulated? Trade contracts weren't fitted to please the interests of the few powerful wealthy elite? Have you read about the invisible hand???

Of course the answer to all of the above is yes they were, yes they were, and you either haven't or didn't completely understand it. Just look at the slave trade if you dont' believe me. I bet the slaves weren't very happy about the manipulation of "Human Rights", but the trade still occurred. Of course the invisible hand is still in existence. If the few powerful manipulate the market to fit their own interests then by definition of the invisible hand it will benefit the many, and I am speaking on average of course. There are powerbrokers that take advantage of the system and do send out poor indicators and cause some to lose in this system, but on average if the big brokers make a trade that hurts the market, then they are harmed as well. In fact, look at the slave trade, the slave trading countries both developed slower and even today are far behind. Even the slave states of the U.S. have smaller economies today than the free states. The ripples of history even affect the outcomes today.(Nunn 2006, The Long-Term Effects of Africa's Slave Trades)

I agree that microsecond trading should be outlawed, but only because it skews the market and isn't fair to the rest of the participants. You, however, should be in favor of it b/c you like the free market and you constantly push for more economic freedom, so to regulate this is only a step away from complete freedom. I refer you back to your argument against the bail out, and also don't wish to start a discussion on that topic, but my point is that you argue on both sides of the court. Pick a team. haha.

No, you are absolutely wrong, nobody is trading and creating wealth out of thin air. This simply DOES NOT OCCUR! Somebody has to be selling a commodity for one to be purchased, so only a transfer of wealth is occurring. Not only that, but for a trade to occur both parties have to be made, if not better off then, at least no worse off otherwise why would either party agree to the trade? As prices rise, the market rises, and eventually people stop buying, or sellers stop selling if the price gets to low. That is the law of supply and demand. As I stated before, ONLY A TRANSFER OF WEALTH!

Yes, its bad since the uneducated traders are typically the ones losing, but its really no different than a casino. No casino creates wealth for the owner, it only facilitates the transfer from those poor bastards that wish to give their money away, to the owners of the machines. I suppose the companies that are being traded on the microsecond scale are losing too since many times they are the ones buying their own stock back and thus the transfer goes from companies to brokers. This is just the nature of the beast.

New century, new commodities, new people, same markets, same incentives, same evils, same world.

[edit on 8-9-2009 by memarf1]

[edit on 8-9-2009 by memarf1]

reply to post by memarf1


Well see this is where a lot of people get confused


There are FIRMS SPECIFICALLY FOR PROVIDING LIQUIDITY TO THE MARKET

These people are NOT LOOKING TO GET YOU, they just want your VOLUME

Now there are strategies WHICH LOOK FOR DARK POOLS OF LIQUIDITY AND TRY TO FRONT RUN THEM

I HAVE NOO PROBLEM WITH THAT

BC people trading in dark pools are the ones you should be pissed about, not the other way around, NOT the liquidity providers, JOHNNY -you must be in the dark pool I am guessing? Getting tired of people sniping you all day? I could help you with an algorithm I suppose for like 3.5 million lol, but seriously, if you are not in the dark pool, you shouldnt be upset.

If you are maybe you should consider routing through another provider.. I heard SIGMA X through our "friend till the end" - GS - has a great method, but I am not on the up and up.

Originally posted by GreenBicMan
reply to post by johnny2127

 

Wow, so you just use RSI to trade?

Really? Equities?

How much cash : securities do you keep on hand?

What? Where did you get that I only use RSI? If you are talking about from a comment I made to that other person, that was just talking about a simple strategy he could use that anyone has access to. In terms of what I use, there is a set of 8 that I use. Some are normal that anyone could use, the others are proprietary that I built. So to answer your question, no I do not use just RSI. Also, if you were talking about what is built into the quant system I was saying the only part built in equation-wise was related to RS. Not RSI, RS. I assume you know the difference.

Originally posted by GreenBicMan
reply to post by johnny2127

 

hahaha no way we totally disagree on that

HFT gives liquidity to the markets so participants like yourself can get out of positions without getting reamed on the spread, dont tell me you are in that camp too?

Someone will have to show me where HFT was been shown to CHANGE THE PREVAILING TREND

If I need to trade 300 contracts, I want to be sure Im not subject to a .50 cent jump in the ES, thats redic.


2nd statement, is: Can I have a job? lol

[edit on 8-9-2009 by GreenBicMan]

Well now we are talking about much different things. You are talking about exceptionally thinly traded stocks. HFT doesn't even touch those much. Also, if trading into a thinly traded stock, I don't just enter a buy order like a retail buyer would. Many times I also have to scale in or out over the course of a few days.

Regarding what is actually moved, it is whatever the HFT trading algorithms, say for that period of time. Look at Fannie, Freddie, AIG. Those are purely driven up by HFT. Look at the amount of shares traded in a given day lately, and then look how many have homes at the end of the trading day. Most of that volume is HFT traders.

I know the argument for why HFT should continue. In some forms I agree, but not with any sort of front running. What you don't understand, is internally the effects those things have. Someone in my position in no way needs HFT to get into and out of whatever it is that I like. Never has been. So whoever fed you that line of bull doesn't know how money managers really work and execute their decisions.

Where do you live?

reply to post by johnny2127


at my parents house lol in florida (hey man im a golf school dropout - tendonitis)

but wait, lets not argue about a good thing about added liquidity, what are you trading that you wouldnt not be effected by less liquidity in the marketplace? Wouldnt if even a penny extra spread that would cost you xxx amount of dollars in the long run be worth having these things?

And are you trading in dark pools? If you are I would be VERY interested to see how this works and what programs/algorithms you are using

How did you write your strategies?.. Prob too much for public forum I know.. just PM me thanks

reply to post by johnny2127


I dont use RSI/RS.. are you talking RS compared to sector performance?

If you are, like I said, I am not into equties, although I am sure I could write programs for high volume stocks if I needed to that could be deemed high frequency (maybe) if I had access to a live data feed for equtiies, I only have that currently for CBOT through barchart

reply to post by GreenBicMan


RSI can be a simplistic overbought or oversold indicator. But I think it is better used as a confirming indicator for other set or series of indicators. RS = Relative Strength. And while this is simple also, it is very powerful just in terms of identifying market areas of strength or weakness.

Given that my holding periods aren't long, I need stocks that have strength, momentum, yet are undervalued according to my valuation methodology. So RS plays a roll in that, more in terms of the sorting of results for my quant results. But in the end RS doesn't tell me what to invest in or get out of. Just is part of a sorting feature within my quant strategies.

What do you trade? Currencies? Commodities? Futures?

reply to post by johnny2127


I dont trrade anything, but have basically sacrificed the last 6 months of my life + 10-12 hours a day writing strategies for YM and ES.

When I was in high school I traded equities a bit and learned the ins and outs of things starting with TA.. I guess its all about what you are comfortable with

I have a whole portfolio basically (lol) in my media profile and of course all my charts etc. in the market thread, but have weened off this very much lately because 90% of my day is done doing backtesting and debugging (and I only program in excel lol).. am not fluent in C or anything or ASCIL, although Im sure I could learn if I had to, just havent had to because Sierra Charts allows you the flex. with automated trading from a worksheet format.. its pretty interesting.. Ill post a screenshot

- Like I said (maybe in another thread?) my main goal is starting a HF (managed futures I guess would be called, and I would have to be a CTA) but either way.. Im pretty good at discretionary trading, but that is in a LIVE SIM acct through SC and I know that is much diff. when $$ is on the line

- IMO your mental is 99% of this game (unless you are a total square) so thats why I think everything should always be automated IMO - but I mean if you throw a DOM up with the ability to go long and short simultaneously in front of me I think I could tear it up with the rest (with 2 sub-accounts I mean)

Btw, how did you get your opportunity? - Usually the story is interesting

[edit on 8-9-2009 by GreenBicMan]