Former investment bank FX trader: Risk management part 3/3
Welcome to the third and final part of this chapter. Thank you all for the 100s of comments and upvotes - maybe this post will take us above 1,000 for this topic! Keep any feedback or questions coming in the replies below. Before you read this note, please start with Part I and then Part II so it hangs together and makes sense. Part III
Squeezes and other risks
Crap trades, timeouts and monthly limits
Squeezes and other risks
We are going to cover three common risks that traders face: events; squeezes, asymmetric bets.
Economic releases can cause large short-term volatility. The most famous is Non Farm Payrolls, which is the most widely watched measure of US employment levels and affects the price of many instruments.On an NFP announcement currencies like EURUSD might jump (or drop) 100 pips no problem. This is fine and there are trading strategies that one may employ around this but the key thing is to be aware of these releases.You can find economic calendars all over the internet - including on this site - and you need only check if there are any major releases each day or week. For example, if you are trading off some intraday chart and scalping a few pips here and there it would be highly sensible to go into a known data release flat as it is pure coin-toss and not the reason for your trading. It only takes five minutes each day to plan for the day ahead so do not get caught out by this. Many retail traders get stopped out on such events when price volatility is at its peak.
Short squeezes bring a lot of danger and perhaps some opportunity. The story of VW and Porsche is the best short squeeze ever. Throughout these articles we've used FX examples wherever possible but in this one instance the concept (which is also highly relevant in FX) is best illustrated with an historical lesson from a different asset class. A short squeeze is when a participant ends up in a short position they are forced to cover. Especially when the rest of the market knows that this participant can be bullied into stopping out at terrible levels, provided the market can briefly drive the price into their pain zone. There's a reason for the car, don't worry Hedge funds had been shorting VW stock. However the amount of VW stock available to buy in the open market was actually quite limited. The local government owned a chunk and Porsche itself had bought and locked away around 30%. Neither of these would sell to the hedge-funds so a good amount of the stock was un-buyable at any price. If you sell or short a stock you must be prepared to buy it back to go flat at some point. To cut a long story short, Porsche bought a lot of call options on VW stock. These options gave them the right to purchase VW stock from banks at slightly above market price. Eventually the banks who had sold these options realised there was no VW stock to go out and buy since the German government wouldn’t sell its allocation and Porsche wouldn’t either. If Porsche called in the options the banks were in trouble. Porsche called in the options which forced the shorts to buy stock - at whatever price they could get it. The price squeezed higher as those that were short got massively squeezed and stopped out. For one brief moment in 2008, VW was the world’s most valuable company. Shorts were burned hard. Incredible event Porsche apparently made $11.5 billion on the trade. The BBC described Porsche as “a hedge fund with a carmaker attached.” If this all seems exotic then know that the same thing happens in FX all the time. If everyone in the market is talking about a key level in EURUSD being 1.2050 then you can bet the market will try to push through 1.2050 just to take out any short stops at that level. Whether it then rallies higher or fails and trades back lower is a different matter entirely. This brings us on to the matter of crowded trades. We will look at positioning in more detail in the next section. Crowded trades are dangerous for PNL. If everyone believes EURUSD is going down and has already sold EURUSD then you run the risk of a short squeeze. For additional selling to take place you need a very good reason for people to add to their position whereas a move in the other direction could force mass buying to cover their shorts. A trading mentor when I worked at the investment bank once advised me: Always think about which move would cause the maximum people the maximum pain. That move is precisely what you should be watching out for at all times.
Also known as picking up pennies in front of a steamroller. This risk has caught out many a retail trader. Sometimes it is referred to as a "negative skew" strategy. Ideally what you are looking for is asymmetric risk trade set-ups: that is where the downside is clearly defined and smaller than the upside. What you want to avoid is the opposite. A famous example of this going wrong was the Swiss National Bank de-peg in 2012. The Swiss National Bank had said they would defend the price of EURCHF so that it did not go below 1.2. Many people believed it could never go below 1.2 due to this. Many retail traders therefore opted for a strategy that some describe as ‘picking up pennies in front of a steam-roller’. They would would buy EURCHF above the peg level and hope for a tiny rally of several pips before selling them back and keep doing this repeatedly. Often they were highly leveraged at 100:1 so that they could amplify the profit of the tiny 5-10 pip rally. Then this happened. Something that changed FX markets forever The SNB suddenly did the unthinkable. They stopped defending the price. CHF jumped and so EURCHF (the number of CHF per 1 EUR) dropped to new lows very fast. Clearly, this trade had horrific risk : reward asymmetry: you risked 30% to make 0.05%. Other strategies like naively selling options have the same result. You win a small amount of money each day and then spectacularly blow up at some point down the line.
We have talked about short squeezes. But how do you know what the market position is? And should you care? Let’s start with the first. You should definitely care. Let’s imagine the entire market is exceptionally long EURUSD and positioning reaches extreme levels. This makes EURUSD very vulnerable. To keep the price going higher EURUSD needs to attract fresh buy orders. If everyone is already long and has no room to add, what can incentivise people to keep buying? The news flow might be good. They may believe EURUSD goes higher. But they have already bought and have their maximum position on. On the flip side, if there’s an unexpected event and EURUSD gaps lower you will have the entire market trying to exit the position at the same time. Like a herd of cows running through a single doorway. Messy. We are going to look at this in more detail in a later chapter, where we discuss ‘carry’ trades. For now this TRYJPY chart might provide some idea of what a rush to the exits of a crowded position looks like. A carry trade position clear-out in action Knowing if the market is currently at extreme levels of long or short can therefore be helpful. The CFTC makes available a weekly report, which details the overall positions of speculative traders “Non Commercial Traders” in some of the major futures products. This includes futures tied to deliverable FX pairs such as EURUSD as well as products such as gold. The report is called “CFTC Commitments of Traders” ("COT"). This is a great benchmark. It is far more representative of the overall market than the proprietary ones offered by retail brokers as it covers a far larger cross-section of the institutional market. Generally market participants will not pay a lot of attention to commercial hedgers, which are also detailed in the report. This data is worth tracking but these folks are simply hedging real-world transactions rather than speculating so their activity is far less revealing and far more noisy. You can find the data online for free and download it directly here. Raw format is kinda hard to work with However, many websites will chart this for you free of charge and you may find it more convenient to look at it that way. Just google “CFTC positioning charts”. But you can easily get visualisations You can visually spot extreme positioning. It is extremely powerful. Bear in mind the reports come out Friday afternoon US time and the report is a snapshot up to the prior Tuesday. That means it is a lagged report - by the time it is released it is a few days out of date. For longer term trades where you hold positions for weeks this is of course still pretty helpful information. As well as the absolute level (is the speculative market net long or short) you can also use this to pick up on changes in positioning. For example if bad news comes out how much does the net short increase? If good news comes out, the market may remain net short but how much did they buy back? A lot of traders ask themselves “Does the market have this trade on?” The positioning data is a good method for answering this. It provides a good finger on the pulse of the wider market sentiment and activity. For example you might say: “There was lots of noise about the good employment numbers in the US. However, there wasn’t actually a lot of position change on the back of it. Maybe everyone who wants to buy already has. What would happen now if bad news came out?” In general traders will be wary of entering a crowded position because it will be hard to attract additional buyers or sellers and there could be an aggressive exit. If you want to enter a trade that is showing extreme levels of positioning you must think carefully about this dynamic.
Retail traders often drastically underestimate how correlated their bets are. Through bitter experience, I have learned that a mistake in position correlation is the root of some of the most serious problems in trading. If you have eight highly correlated positions, then you are really trading one position that is eight times as large. Bruce Kovner of hedge fund, Caxton Associates For example, if you are trading a bunch of pairs against the USD you will end up with a simply huge USD exposure. A single USD-trigger can ruin all your bets. Your ideal scenario — and it isn’t always possible — would be to have a highly diversified portfolio of bets that do not move in tandem. Look at this chart. Inverted USD index (DXY) is green. AUDUSD is orange. EURUSD is blue. Chart from TradingView So the whole thing is just one big USD trade! If you are long AUDUSD, long EURUSD, and short DXY you have three anti USD bets that are all likely to work or fail together. The more diversified your portfolio of bets are, the more risk you can take on each. There’s a really good video, explaining the benefits of diversification from Ray Dalio. A systematic fund with access to an investable universe of 10,000 instruments has more opportunity to make a better risk-adjusted return than a trader who only focuses on three symbols. Diversification really is the closest thing to a free lunch in finance. But let’s be pragmatic and realistic. Human retail traders don’t have capacity to run even one hundred bets at a time. More realistic would be an average of 2-3 trades on simultaneously. So what can be done? For example:
You might diversify across time horizons by having a mix of short-term and long-term trades.
You might diversify across asset classes - trading some FX but also crypto and equities.
You might diversify your trade generation approach so you are not relying on the same indicators or drivers on each trade.
You might diversify your exposure to the market regime by having some trades that assume a trend will continue (momentum) and some that assume we will be range-bound (carry).
And so on. Basically you want to scan your portfolio of trades and make sure you are not putting all your eggs in one basket. If some trades underperform others will perform - assuming the bets are not correlated - and that way you can ensure your overall portfolio takes less risk per unit of return. The key thing is to start thinking about a portfolio of bets and what each new trade offers to your existing portfolio of risk. Will it diversify or amplify a current exposure?
Crap trades, timeouts and monthly limits
One common mistake is to get bored and restless and put on crap trades. This just means trades in which you have low conviction. It is perfectly fine not to trade. If you feel like you do not understand the market at a particular point, simply choose not to trade. Flat is a position. Do not waste your bullets on rubbish trades. Only enter a trade when you have carefully considered it from all angles and feel good about the risk. This will make it far easier to hold onto the trade if it moves against you at any point. You actually believe in it. Equally, you need to set monthly limits. A standard limit might be a 10% account balance stop per month. At that point you close all your positions immediately and stop trading till next month. Be strict with yourself and walk away Let’s assume you started the year with $100k and made 5% in January so enter Feb with $105k balance. Your stop is therefore 10% of $105k or $10.5k . If your account balance dips to $94.5k ($105k-$10.5k) then you stop yourself out and don’t resume trading till March the first. Having monthly calendar breaks is nice for another reason. Say you made a load of money in January. You don’t want to start February feeling you are up 5% or it is too tempting to avoid trading all month and protect the existing win. Each month and each year should feel like a clean slate and an independent period. Everyone has trading slumps. It is perfectly normal. It will definitely happen to you at some stage. The trick is to take a break and refocus. Conserve your capital by not trading a lot whilst you are on a losing streak. This period will be much harder for you emotionally and you’ll end up making suboptimal decisions. An enforced break will help you see the bigger picture. Put in place a process before you start trading and then it’ll be easy to follow and will feel much less emotional. Remember: the market doesn’t care if you win or lose, it is nothing personal. When your head has cooled and you feel calm you return the next month and begin the task of building back your account balance.
That's a wrap on risk management
Thanks for taking time to read this three-part chapter on risk management. I hope you enjoyed it. Do comment in the replies if you have any questions or feedback. Remember: the most important part of trading is not making money. It is not losing money. Always start with that principle. I hope these three notes have provided some food for thought on how you might approach risk management and are of practical use to you when trading. Avoiding mistakes is not a sexy tagline but it is an effective and reliable way to improve results. Next up I will be writing about an exciting topic I think many traders should look at rather differently: news trading. Please follow on here to receive notifications and the broad outline is below. News Trading Part I
Why use the economic calendar
Reading the economic calendar
Knowing what's priced in
First order thinking vs second order thinking
News Trading Part II
Preparing for quantitative and qualitative releases
Data surprise index
Using recent events to predict future reactions
Buy the rumour, sell the fact
The mysterious 'position trim' effect
Some key FX releases
*** Disclaimer:This content is not investment advice and you should not place any reliance on it. The views expressed are the author's own and should not be attributed to any other person, including their employer.
Factset: How You can Invest in Hedge Funds’ Biggest Investment Tl;dr FactSet is the most undervalued widespread SaaS/IT solution stock that exists If any of you have relevant experience or are friends with people in Investment Banking/other high finance, you know that Factset is the lifeblood of their financial analysis toolkit if and when it’s not Bloomberg, which isn’t even publicly traded. Factset has been around since 1978 and it’s considered a staple like Bloomberg in many wealth management firms, and it offers some of the easiest to access and understandable financial data so many newer firms focused less on trading are switching to Factset because it has a lot of the same data Bloomberg offers for half the cost. When it comes to modern financial data, Factset outcompetes Reuters and arguably Bloomberg as well due to their API services which makes Factset much more preferable for quantitative divisions of banks/hedge funds as API integration with Python/R is the most important factor for vast data lakes of financial data, this suggests Factset will be much more prepared for programming making its way into traditional finance fields. According to Factset, their mission for data delivery is to: “Integrate the data you need with your applications, web portals, and statistical packages. Whether you need market, company, or alternative data, FactSet flexible data delivery services give you normalized data through APIs and a direct delivery of local copies of standard data feeds. Our unique symbology links and aggregates a variety of content sources to ensure consistency, transparency, and data integrity across your business. Build financial models and power customized applications with FactSet APIs in our developer portal”. Their technical focus for their data delivery system alone should make it stand out compared to Bloomberg, whose UI is far more outdated and complex on top of not being as technically developed as Factset’s. Factset is the key provider of buy-side portfolio analysis for IBs, Hedge funds, and Private Equity firms, and it’s making its way into non-quantitative hedge funds as well because quantitative portfolio management makes automation of risk management and the application of portfolio theory so much easier, and to top it off, Factset’s scenario analysis and simulation is unique in its class. Factset also is able to automate trades based on individual manager risk tolerance and ML optimization for Forex trading as well. Not only does Factset provide solutions for financial companies, they are branching out to all corporations now and providing quantitative analytics for them in the areas of “corporate development, M&A, strategy, treasury, financial planning and analysis, and investor relations workflows”. Factset will eventually in my opinion reach out to Insurance Risk Management a lot more in the future as that’s a huge industry which has yet to see much automation of risk management yet, and with the field wide open, Factset will be the first to take advantage without a shadow of a doubt. So let’s dig into the company’s financials now: Their latest 8k filing reported the following: Revenue increased 2.6%, or $9.6 million, to $374.1 million compared with $364.5 million for the same period in fiscal 2019. The increase is primarily due to higher sales of analytics, content and technology solutions (CTS) and wealth management solutions. Annual Subscription Value (ASV) plus professional services was $1.52 billion at May 31, 2020, compared with $1.45 billion at May 31, 2019. The organic growth rate, which excludes the effects of acquisitions, dispositions, and foreign currency movements, was 5.0%. The primary contributors to this growth rate were higher sales in FactSet's wealth and research workflow solutions and a price increase in the Company's international region Adjusted operating margin improved to 35.5% compared with 34.0% in the prior year period primarily as a result of reduced employee-related operating expenses due to the coronavirus pandemic. Diluted earnings per share (EPS) increased 11.0% to $2.63 compared with $2.37 for the same period in fiscal 2019. Adjusted diluted EPS rose 9.2% to $2.86 compared with $2.62 in the prior year period primarily driven by an improvement in operating results. The Company’s effective tax rate for the third quarter decreased to 15.0% compared with 18.6% a year ago, primarily due to an income tax expense in the prior year related to finalizing the Company's tax returns with no similar event for the three months ended May 31, 2020. FactSet increased its quarterly dividend by $0.05 per share or 7% to $0.77 marking the fifteenth consecutive year the Company has increased dividends, highlighting its continued commitment to returning value to shareholders. As you can see, there’s not much of a negative sign in sight here. It makes sense considering how FactSet’s FCF has never slowed down: https://preview.redd.it/frmtdk8e9hk51.png?width=276&format=png&auto=webp&s=1c0ff12539e0b2f9dbfda13d0565c5ce2b6f8f1a https://preview.redd.it/6axdb6lh9hk51.png?width=593&format=png&auto=webp&s=9af1673272a5a2d8df28f60f4707e948a00e5ff1 FactSet’s annual subscriptions and professional services have made its way to foreign and developing markets, and many of them are opting for FactSet’s cheaper services to reduce costs and still get copious amounts of data and models to work with. Here’s what FactSet had to say regarding its competitive position within the market of providing financial data in its last 10k: “Despite competing products and services, we enjoy high barriers to entry and believe it would be difficult for another vendor to quickly replicate the extensive databases we currently offer. Through our in-depth analytics and client service, we believe we can offer clients a more comprehensive solution with one of the broadest sets of functionalities, through a desktop or mobile user interface or through a standardized or bespoke data feed.” And FactSet is confident that their ML services cannot be replaced by anybody else in the industry either: “In addition, our applications, including our client support and service offerings, are entrenched in the workflow of many financial professionals given the downloading functions and portfolio analysis/screening capabilities offered. We are entrusted with significant amounts of our clients' own proprietary data, including portfolio holdings. As a result, our products have become central to our clients’ investment analysis and decision-making.” (https://last10k.com/sec-filings/fds#link_fullReport), if you read the full report and compare it to the most recent 8K, you’ll find that the real expenses this quarter were far lower than expected by the last 10k as there was a lower than expected tax rate and a 3% increase in expected operating margin from the expected figure as well. The company also reports a 90% customer retention rate over 15 years, so you know that they’re not lying when they say the clients need them for all sorts of financial data whether it’s for M&A or wealth management and Equity analysis: https://www.investopedia.com/terms/f/factset.asp https://preview.redd.it/yo71y6qj9hk51.png?width=355&format=png&auto=webp&s=a9414bdaa03c06114ca052304a26fae2773c3e45 FactSet also has remarkably good cash conversion considering it’s a subscription based company, a company structure which usually takes on too much leverage. Speaking of leverage, FDS had taken on a lot of leverage in 2015: https://preview.redd.it/oxaa1wel9hk51.png?width=443&format=png&auto=webp&s=13d60d2518980360c403364f7150392ab83d07d7 So what’s that about? Why were FactSet’s long term debts at 0 and all of a sudden why’d the spike up? Well usually for a company that’s non-cyclical and has a well-established product (like FactSet) leverage can actually be good at amplifying returns, so FDS used this to their advantage and this was able to help the share’s price during 2015. Also, as you can see debt/ebitda is beginning a rapid decline anyway. This only adds to my theory that FactSet is trying to expand into new playing fields. FactSet obviously didn’t need the leverage to cover their normal costs, because they have always had consistently growing margins and revenue so the debt financing was only for the sake of financing growth. And this debt can be considered covered and paid off, considering the net income growth of 32% between 2018 and 2019 alone and the EPS growth of 33% https://preview.redd.it/e4trju3p9hk51.png?width=387&format=png&auto=webp&s=6f6bee15f836c47e73121054ec60459f147d353e EBITDA has virtually been exponential for FactSet for a while because of the bang-for-buck for their well-known product, but now as FactSet ventures into algorithmic trading and corporate development the scope for growth is broadly expanded. https://preview.redd.it/yl7f58tr9hk51.png?width=489&format=png&auto=webp&s=68906b9ecbcf6d886393c4ff40f81bdecab9e9fd P/E has declined in the past 2 years, making it a great time to buy. https://preview.redd.it/4mqw3t4t9hk51.png?width=445&format=png&auto=webp&s=e8d719f4913883b044c4150f11b8732e14797b6d Increasing ROE despite lowering of leverage post 2016 https://preview.redd.it/lt34avzu9hk51.png?width=441&format=png&auto=webp&s=f3742ed87cd1c2ccb7a3d3ee71ae8c7007313b2b Mountains of cash have been piling up in the coffers increasing chances of increased dividends for shareholders (imo dividend is too low right now, but increasing it will tempt more investors into it), and on top of that in the last 10k a large buyback expansion program was implemented for $210m worth of shares, which shows how confident they are in the company itself. https://preview.redd.it/fliirmpx9hk51.png?width=370&format=png&auto=webp&s=1216eddeadb4f84c8f4f48692a2f962ba2f1e848 SGA expense/Gross profit has been declining despite expansion of offices I’m a bit concerned about the skin in the game leadership has in this company, since very few executives/board members have significant holdings in the company, but the CEO himself is a FactSet veteran, and knows his way around the company. On top of that, Bloomberg remains king for trading and the fixed income security market, and Reuters beats out FactSet here as well. If FactSet really wants to increase cash flow sources, the expansion into insurance and corp dev has to be successful. Summary: FactSet has a lot of growth still left in its industry which is already fast-growing in and of itself, and it only has more potential at its current valuation. Earnings September 24th should be a massive beat due to investment banking demand and growth plus Hedge fund requirements for data and portfolio management hasn’t gone anywhere and has likely increased due to more market opportunities to buy-in. Calls have shitty greeks, but if you're ballsy October 450s LOL, I'm holding shares I’d say it’s a great long term investment, and it should at least be on your watchlist.
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Profitable Forex Strategy Reddit
Types of trading strategies The forms of a trading strategy can combine a variety of methods. However, several of the most commonly used options can be highlighted.
Trading strategy based on various complementary technical indicators
Trading strategy using Bollinger Bands
Moving Average Strategy
Technical figures and patterns
Trading with Fibonacci levels
Candlestick trading strategy
Trend trading strategy
Flat trading strategy
Fundamental analysis as the basis of the strategy
Three most profitable Forex strategies
Important!These strategies are the basis for building your own trading system.Indicator settings and recommended pending order levels are for consultation only.If you do not get a satisfactory outcome in the test result or in a live account, that does not mean that the problem is the strategy.It is enough to choose individual parameters of indicators under a separate asset and under the current market situation.
1. “Bali” scalping strategy
This strategy is one of the most popular, at least its description can be found on many websites. However, the recommendations will be different. According to the author's idea, "Bali" refers to scalping tactics, as it facilitates a fairly short stop loss (SL) and take profit (TP). However, the recommended time frame is high, because the signals appear not very often. The authors recommend using the H1 interval and the EUR / USD currency pair. Indicators used:
Linear Weighted Moving Average. Period 48 (red line).
Important!Note that the indicators for the “Bali” strategy are chosen in such a way as to ultimately give an early signal.This gives the trader time to confirm the signal and check the fundamentals.
MA is one of the basics on MT4, the other two indicators can be found in the archive for free here. To add them to the platform, click on MT4: "File / Open data directory". In the folder that opens, follow the following path: MQL4 / Indicators. Copy the flags to the folder and restart the platform. Also Read: Make Money With Trading Conditions to open a long position:
Price penetrates the orange Trend Envelopes line from the bottom up. At the same time in the same candle there is a change of the orange line that falls to a growing celestial.
The candle is above LWMA. Once the above condition has been met, we wait for the candle to appear above the moving one. It is important that it closes above the LWMA red line. It is mandatory to have a Skyline Trend Envelopes on a signal candle.
The additional DSS of momentum line on the signal candle is green and is above the dotted line of the signal (that is, it crosses or crosses it).
We open a trade at the close of the signal candle. The recommended stop level is 20-25 points in 4-digit quotes, take profit at 40-50 points. https://preview.redd.it/t48d55s8faw51.jpg?width=1000&format=pjpg&auto=webp&s=1e93863745e74dec536178539817225767cbeb1c The arrow indicates a signal candle where a Trend Envelopes color change occurred. Note (purple ovals) that the blue line is below the orange line and goes upwards (in other cases the signal should be ignored). In the signal candle, the green DSS of momentum line is above the dotted line. Conditions to open a short position:
Price penetrates the Trend Envelopes sky line from top to bottom. At the same time in the same candle there is a change from the increasing celestial line to the falling orange.
The candle is below LWMA. Once the above condition has been met, we wait for the candle to appear below the mobile. It is important that it closes below the LWMA red line. It is mandatory to have an orange Trend Envelopes line on a signal candle.
The additional DSS of momentum line on the signal candle is orange and is below the dotted line of the signal (i.e. crosses or crosses it).
This profitable Forex strategy is weekly and can be used on different currency pairs. It is based on the spring principle of price movement, what went up quickly, sooner or later must fall. To trade you will only need a schedule on any platform and W1 time frame (although the daily interval can be used).
The bearish candle, which signifies last week's movement, has a relatively large body.
Open a long position early next week. Make sure to place a stop loss at 100-140 points and a take profit at 50-70 points. When it is midweek, close the order if it has not yet been closed at take profit or stop loss. After that, wait again for the beginning of the week and repeat the procedure, in any case do not open operations at the end of the current week. https://preview.redd.it/vuihnqspfaw51.jpg?width=1000&format=pjpg&auto=webp&s=7641e9d7701911cc255c4f0c8a53e1660c35c9fe On this chart it is clearly seen that after each large bearish candle there is necessarily a bullish candle (although smaller). The only question is what period to take where it makes sense to compare the relative length of the candles. Here everything is individual for each currency pair. Note that a rising candle was observed followed by a few small bearish candles. But when it comes to minimizing risks, it is best not to open a long response position, as the relatively small decline from the previous week may continue. Conditions to open a short position:
The bullish candle, which signifies last week's movement, has a relatively large body.
We open a short position early next week. https://preview.redd.it/tv4zmf5ufaw51.jpg?width=1000&format=pjpg&auto=webp&s=61cd1dcfc4aebfa6f80343b6c51f7a6e46358602 The red arrows point to the candles that had a large body around the previous bullish candles. Almost all signals turned out to be profitable, except for the transactions indicated by a blue arrow. The shortcomings of the strategy are rare signs, albeit with a high probability of profit. The best thing is that it can be used in several pairs at the same time. This strategy has an interesting modification based on similar logic. Investors with little capital opt for intraday strategies, as their money is insufficient to exert radical pressure on the market. Therefore, if there is a strong move on the weekly chart, this may indicate a cluster of large strong traders. In other words, if there are three weekly candles in one direction, it is most likely the fourth. Here you also have to take into account the psychological factor, 4 candles is equal to one month, and those who "push" the market in one direction, within a month will begin to set profits. Strategy principle:
A "three candles" pattern (ascending and descending) formed on the weekly chart.
It is preferable that each subsequent candle was larger than the previous one. Doji is not taken into account (disembodied candles).
Stop is placed at the closing level of the first candle of the constructed formation. Take profit at 50-100% of the last candle, but it is often better to manually close the trade.
This strategy is universal and is usually given as an example for novice traders. It uses classic EMA (Exponential Moving Average) indicators for MT4 and Parabolic SAR, which acts as a confirmatory indicator. The strategy is trend. Most sources suggest using it in "minutes", but price noise reduces its efficiency. It is better to use M15-M30 intervals. Currency pairs - Any, but you may need to adjust the indicator settings. Indicators used:
EMA with periods 5, 25 and 50. EMA (5) in red, EMA (25) and EMA (50) in yellow. Apply to Close (closing price).
Red EMA (5) crosses the yellows from bottom to top.
Parabolic SAR is located under the sails.
Conditions to open a short position:
Red EMA (5) crosses the yellows from top to bottom.
Parabolic SAR is located above the candles.
The transaction can be opened on the same candle where the mobile crossover occurred. Stop loss at the local minimum, take profit at 20-25 points. But with the manual management of transactions you can extract great benefits. For example, close at the time of the transition from EMA (5) to a horizontal position (change of the angle of inclination of the growth to flat). https://preview.redd.it/4un92jlegaw51.jpg?width=1000&format=pjpg&auto=webp&s=406a700c00722349622d031e20d0858e4196d18b This screen shows that all three signals (two long and one short) were effective. It would be possible to enter the market on the candle by following the signal (in order to accurately verify the direction of the trend), but you would then miss the right time to enter. It is up to you to decide whether it is worth the risk. For one-hour intervals, these parameters hardly work, so be sure to check the performance of the indicators for each period of time in a minimum span of three years. And now that you know the theory, a few words about how to put these strategies into practice. Ready? Then let's get started!
From the theory to the practice
Step 1. Open demo account It's free, requires no deposit, takes up to 15 minutes, and no verification required. On the main page of your broker there is for sures a button "Register", click and follow the instructions. An account can also be opened from other menus (for example, from the top menu, from the commercial conditions of the account, etc.). Step 2. Familiarize yourself with the functionality of the Personal Area. It won't take long. It is at the most user friendly and intuitive. You just need to understand the instruments of the platform and understand how the trades are opened. Step 3. Launch the trading platform. The Personal Area has the platform incorporated, but it is impossible to add templates. Hence, the "Bali" and "Parabolic Profit" strategies can only be executed on MT4.
Characteristics of an effective Forex strategy Reddit
And finally, let's see what makes a profitable Forex strategy effective. What properties should it have? Perhaps three of the most important characteristics can be pointed out.
The minimum number of lag indicators. The smaller they are, the greater the forecast accuracy.
Easy. Understanding your strategy is more important than your saturation with complex elements, formulas, and schematics.
Uniqueness. Any trading strategy must be "tailored" to your trading style, your character, your circumstances, and so on.
It is very important to develop your own trading strategy, but it is necessary to test a large number of already available and proven strategies. On the Forex blog you will find trading strategies available for download. Before using a live account, test your chosen strategy on the demo account on the MetaTrader trading platform. Conclusion. To successfully trade the Forex currency market, create your own trading strategy. Learn what's new, learn out-of-the-box trading schemes, and improve your individual action plan in the market. Only in this case, the trading results will satisfy you to the fullest. Success, dear readers! >>> Forex Signals With Unbeatable Performance: Verified Forex Results And 5° Rated OnInvesting.com|Free Forex Signals Trial:CLICK HERE TO JOIN FOR FREE Join the community for more articles on trading and making money on the Forex and Stock market. ------------------------------------------------ ------------------------------------------------ Disclosure: This post contains affiliate links, if you click and make a purchase I may receive a commission - This has NO extra cost for you.
Guide to Stock Market (Trading in General) Mentoring/Mentorship Programs in the philippines
Hi, may nakikita akong questions about investing/trading and some about trading mentors/gurus societies etc. This is my opinion depende na sa inyo kung susundin nyo. ZFT - Zeefreaks tribe, First, i do respect "Zee" as a trader,his "tribe" teaches or mentors their students using their system to become their own. Generally, Darvas Box, MAs 20 50 100 and RSI are their weapons but mainly its the Price Action and RSI ang parang laman talaga ng System nila and you can only get better through time as with other systems in general. I think they are good, but yun na nga, just good. Problem: They charge you with a hefty sum na i don't think na ma jujustify nila, because at the end of the day more or less its you ( along with practice) and your psychology that can help you along the way. Okay, may Trading psych coach daw sila , si Ma'am Celeste (Zee's Gf) pero overtime you will learn about yourself in the process naman. Zee is justifying the hefty fee because sabi nya before if im not mistaken na the clients are not paying the mentoring alone pero along with it yung "CULTURE" ng ZFT. I say, bullshit. Di nga nya alam na may mga ZFT "mentors" na that are mentoring other people without his knowledge and charging them less but still a very hefty fee. hehe Akala nya wala na pero meron pa, magaling lang talaga magtago. KIDLAT- hmm , same with ZFT since dun din naman sya nanggaling, Habits you know. T3 ( The Tattooed Trader)- well, this guy is LEGIT. He trades international markets too not just PSEI. Reasonable Fee. Good guy,prangka din. He doesnt tolerate Bullshit. He wont try to impose his system sayo but instead encourages you to go with the process. That's it. Gandah Koh ( Trader's Lounge) - He/She provides free content daw. Yes, FREE content pero at the same time sinasabi nya that he/she is just an average trader. Kicks people who patronizes paid mentorship / who belong sa paid mentorship or kahit magtanong ka man lang ng about paid mentorship rage mode na agad tapos kick na agad. Yung mga followers nya ayaw lang talaga gumastos to learn premium content. Biruin nyo? gusto maging free yung investa? lol. Ironic, why? kasi sabi nya average trader lang daw sya but he/she shuts off people who would want to learn from those who are better than her. To all hehis followers, Eto po tanong ko.
may member ba sa Trader's lounge na consistently profitable na? with rising equity curve?
Do you think the best traders out there did not spend any cent to boost their career to the top?
Simple lang yan. isip isipin nyo. :D BOH- Superb! yung mga quant models nila ay one of the best if not the best. Very technical and systematic yung BOH and their team ay may credentials to back it up. Yung Fee ay affordable, kayang kaya ng ordinary working people. Oakbridge (DAVAO)- not much information about them kasi tahimik lang sila ,but what i know is that bigatin yung mentors dun but apart from that i don't know much kaya i can't say anything more. Bigote (bigote trading financial advocacy) - Eto yung free content na LEGIT. One of the best people i know, he is a caylum trading institute alumni. Eto, you use his system plus master price action. Open journal by Javi Medina, Matt flores, Ken Arcano - If you dig Elliot wave then they are the guys you want to learn from, the information they provide are all backtested, no guess works just pure juicy contents day in and day out. Trivia: They manage funds from various big time clients. Tomatrader, Jet mojica(from BOH), Joanne (from investa), Bearyo ( from investa) and etc Joined Open Journal. Javi Medina - ranked 1st the 2020 US investing competition, also he was an investacup champion. Ken Arcano - top 5 in investacup. Matt Flores- i dont know much about him though, silent kind of guy. OJ's system can be used in trading crypto, Forex , commodities, US stocks and other indices. Caylum Trading Institute - i think di na kailangan e describe pa yung caylum eh. *wink* So there you go. It's your choice kung how you will take my opinion, you can bash me or what i really don't care. At the end of the day, choice nyo pa rin yon. Kung ako lang, id go with
Read the trading code by jason cam.
Download any price action videos/books . Ex. Steve nison books
Try out Bigote's framework or enroll with any one of those services , but i would recommend open journal, BOH, T3 or caylum. If you want ZFT or kidlat then go for it.
At the end of the day, stick with one system , be patient, dont shortcut the process, master one setup at a time and improve your trading psychology. I dont want to spread hate, just spitting out my opinion. You can share this in fb, twitter or any socmed you like or not share this, do whatever you want. That's all. Stay home to help the frontliners.
Factset: How You can Invest in Hedge Funds’ Biggest Investment Tl;dr FactSet is the most undervalued widespread SaaS/IT solution stock that exists If any of you have relevant experience or are friends with people in Investment Banking/other high finance, you know that Factset is the lifeblood of their financial analysis toolkit if and when it’s not Bloomberg, which isn’t even publicly traded. Factset has been around since 1978 and it’s considered a staple like Bloomberg in many wealth management firms, and it offers some of the easiest to access and understandable financial data so many newer firms focused less on trading are switching to Factset because it has a lot of the same data Bloomberg offers for half the cost. When it comes to modern financial data, Factset outcompetes Reuters and arguably Bloomberg as well due to their API services which makes Factset much more preferable for quantitative divisions of banks/hedge funds as API integration with Python/R is the most important factor for vast data lakes of financial data, this suggests Factset will be much more prepared for programming making its way into traditional finance fields. According to Factset, their mission for data delivery is to: “Integrate the data you need with your applications, web portals, and statistical packages. Whether you need market, company, or alternative data, FactSet flexible data delivery services give you normalized data through APIs and a direct delivery of local copies of standard data feeds. Our unique symbology links and aggregates a variety of content sources to ensure consistency, transparency, and data integrity across your business. Build financial models and power customized applications with FactSet APIs in our developer portal”. Their technical focus for their data delivery system alone should make it stand out compared to Bloomberg, whose UI is far more outdated and complex on top of not being as technically developed as Factset’s. Factset is the key provider of buy-side portfolio analysis for IBs, Hedge funds, and Private Equity firms, and it’s making its way into non-quantitative hedge funds as well because quantitative portfolio management makes automation of risk management and the application of portfolio theory so much easier, and to top it off, Factset’s scenario analysis and simulation is unique in its class. Factset also is able to automate trades based on individual manager risk tolerance and ML optimization for Forex trading as well. Not only does Factset provide solutions for financial companies, they are branching out to all corporations now and providing quantitative analytics for them in the areas of “corporate development, M&A, strategy, treasury, financial planning and analysis, and investor relations workflows”. Factset will eventually in my opinion reach out to Insurance Risk Management a lot more in the future as that’s a huge industry which has yet to see much automation of risk management yet, and with the field wide open, Factset will be the first to take advantage without a shadow of a doubt. So let’s dig into the company’s financials now: Their latest 8k filing reported the following: Revenue increased 2.6%, or $9.6 million, to $374.1 million compared with $364.5 million for the same period in fiscal 2019. The increase is primarily due to higher sales of analytics, content and technology solutions (CTS) and wealth management solutions. Annual Subscription Value (ASV) plus professional services was $1.52 billion at May 31, 2020, compared with $1.45 billion at May 31, 2019. The organic growth rate, which excludes the effects of acquisitions, dispositions, and foreign currency movements, was 5.0%. The primary contributors to this growth rate were higher sales in FactSet's wealth and research workflow solutions and a price increase in the Company's international region Adjusted operating margin improved to 35.5% compared with 34.0% in the prior year period primarily as a result of reduced employee-related operating expenses due to the coronavirus pandemic. Diluted earnings per share (EPS) increased 11.0% to $2.63 compared with $2.37 for the same period in fiscal 2019. Adjusted diluted EPS rose 9.2% to $2.86 compared with $2.62 in the prior year period primarily driven by an improvement in operating results. The Company’s effective tax rate for the third quarter decreased to 15.0% compared with 18.6% a year ago, primarily due to an income tax expense in the prior year related to finalizing the Company's tax returns with no similar event for the three months ended May 31, 2020. FactSet increased its quarterly dividend by $0.05 per share or 7% to $0.77 marking the fifteenth consecutive year the Company has increased dividends, highlighting its continued commitment to returning value to shareholders. As you can see, there’s not much of a negative sign in sight here. It makes sense considering how FactSet’s FCF has never slowed down FactSet’s annual subscriptions and professional services have made its way to foreign and developing markets, and many of them are opting for FactSet’s cheaper services to reduce costs and still get copious amounts of data and models to work with. Here’s what FactSet had to say regarding its competitive position within the market of providing financial data in its last 10k: “Despite competing products and services, we enjoy high barriers to entry and believe it would be difficult for another vendor to quickly replicate the extensive databases we currently offer. Through our in-depth analytics and client service, we believe we can offer clients a more comprehensive solution with one of the broadest sets of functionalities, through a desktop or mobile user interface or through a standardized or bespoke data feed.” And FactSet is confident that their ML services cannot be replaced by anybody else in the industry either: “In addition, our applications, including our client support and service offerings, are entrenched in the workflow of many financial professionals given the downloading functions and portfolio analysis/screening capabilities offered. We are entrusted with significant amounts of our clients' own proprietary data, including portfolio holdings. As a result, our products have become central to our clients’ investment analysis and decision-making.” (https://last10k.com/sec-filings/fds#link_fullReport), if you read the full report and compare it to the most recent 8K, you’ll find that the real expenses this quarter were far lower than expected by the last 10k as there was a lower than expected tax rate and a 3% increase in expected operating margin from the expected figure as well. The company also reports a 90% customer retention rate over 15 years, so you know that they’re not lying when they say the clients need them for all sorts of financial data whether it’s for M&A or wealth management and Equity analysis: https://www.investopedia.com/terms/f/factset.asp FactSet also has remarkably good cash conversion considering it’s a subscription based company, a company structure which usually takes on too much leverage. Speaking of leverage, FDS had taken on a lot of leverage in 2015: So what’s that about? Why were FactSet’s long term debts at 0 and all of a sudden why’d the spike up? Well usually for a company that’s non-cyclical and has a well-established product (like FactSet) leverage can actually be good at amplifying returns, so FDS used this to their advantage and this was able to help the share’s price during 2015. Also, as you can see debt/ebitda is beginning a rapid decline anyway. This only adds to my theory that FactSet is trying to expand into new playing fields. FactSet obviously didn’t need the leverage to cover their normal costs, because they have always had consistently growing margins and revenue so the debt financing was only for the sake of financing growth. And this debt can be considered covered and paid off, considering the net income growth of 32% between 2018 and 2019 alone and the EPS growth of 33% EBITDA has virtually been exponential for FactSet for a while because of the bang-for-buck for their well-known product, but now as FactSet ventures into algorithmic trading and corporate development the scope for growth is broadly expanded. P/E has declined in the past 2 years, making it a great time to buy. Increasing ROE despite lowering of leverage post 2016 Mountains of cash have been piling up in the coffers increasing chances of increased dividends for shareholders (imo dividend is too low right now, but increasing it will tempt more investors into it), and on top of that in the last 10k a large buyback expansion program was implemented for $210m worth of shares, which shows how confident they are in the company itself. SGA expense/Gross profit has been declining despite expansion of offices I’m a bit concerned about the skin in the game leadership has in this company, since very few executives/board members have significant holdings in the company, but the CEO himself is a FactSet veteran, and knows his way around the company. On top of that, Bloomberg remains king for trading and the fixed income security market, and Reuters beats out FactSet here as well. If FactSet really wants to increase cash flow sources, the expansion into insurance and corp dev has to be successful. Summary: FactSet has a lot of growth still left in its industry which is already fast-growing in and of itself, and it only has more potential at its current valuation. Earnings September 24th should be a massive beat due to investment banking demand and growth plus Hedge fund requirements for data and portfolio management hasn’t gone anywhere and has likely increased due to more market opportunities to buy-in.
【U.S. Election 2020】Trump or Biden: Who's tougher on China?
Photo:Internet As the pandemic has spread around the world this year, new rhetoric about being "tough" on China has unfurled throughout the political conversation in the United States. Trump VS. Biden: Attitudes to China Biden and his campaign have spoken in broad strokes without offering details about exactly how far he would be willing to confront China on trade, human rights, cyber-espionage, or its growing presence in the South China Sea. Biden also says that he would shore up U.S. alliances, which he says Trump has badly damaged, to present a united front against Beijing and that he would invest in high-tech research and education to make the U.S. economy more competitive. Biden only mentioned China once in his speech on Aug. 20th. In comparison, Trump mentioned China many times in his speech on Aug. 27th. During his speech, President Donald Trump claimed that he has "very good information" that China wants Biden to win because Biden cheers for China. In fact, Trump enjoyed good relations with China leader Xi Jinping early in his administration while the two leaders engaged in major trade talks, and later, after the coronavirus began to spread, Trump praised Xi for his handling of the crisis. Once the relationship soured, and Trump began blaming China for U.S. public health and economic woes. "Joe Biden's agenda is made in China. My agenda is made in the USA," Trump said. Photo: Reuters Trump or Biden? China expects no favours either way Decoupling This word gets used a lot these days. President Trump and his administration talk about it in tweets and in press statements in relation to China. Decoupling basically means undoing more than three decades' worth of U.S. business relations with China. Everything is on the cards: from getting American factories to pull their supply chains out of the mainland, to forcing Chinese-owned companies that operate in the U.S. - like TikTok and Tencent - to swap their Chinese owners for American ones. Make no mistake, under a Trump administration "decoupling will be accelerated", according to Solomon Yue, vice chairman and chief executive of the Republicans Overseas lobby group. While the U.S. has had some success in forcing American companies to stop doing business with Chinese tech giants like Huawei, it is pushing Chinese firms to develop self-sufficiency in some key industries, like chip-making and artificial intelligence. Delisting As part of its focus on China, the Trump administration has come up with a set of recommendations for Chinese firms listed in the U.S., setting a January 2022 deadline to comply with new rules on auditing. While a Biden administration may not necessarily push through with the exact same ban, analysts say the scrutiny and tone of these recommendations is likely to stay. While fears of being delisted aren't high on the list of concerns for Chinese companies that are already listed in the U.S., it's enough to sway the decisions of companies that are looking to float in the future. Take Ant Group, for example, the mammoth Chinese digital financial services group that this week filed for an IPO. Affiliated to the Alibaba Group, which is listed in the U.S. and Hong Kong, it chose Hong Kong and Shanghai in which to sell its shares instead of the U.S. Increasingly other Chinese companies are likely to follow suit, as tensions between the U.S. and China get worse. Deglobalisation China has been one of the biggest beneficiaries of globalisation over the last 30 years. It has helped hundreds of millions of Chinese afford a better quality and standard of life, the bedrock upon which President Xi Jinping's Chinese Dream is based. But that's precisely what President Trump says needs to change: his administration argues that China has become richer while the U.S. has become poorer. During Mr. Trump's term, deglobalisation - where borders are less open, and trade is less free - has become a trend. And it's something that Beijing knows won't change even after the election. Regardless of whether Biden or Trump is elected president, US-China relations Relations have a great impact on financial markets. The global market is anxiously awaiting the end of this election. https://preview.redd.it/n1bgv6csd1n51.png?width=686&format=png&auto=webp&s=5d90f790a9631a69d1e2c121d33bf5eb20fe33c2 https://preview.redd.it/tgns8zhtd1n51.png?width=686&format=png&auto=webp&s=9b3a66ae41cf1e94d6610e97d96a5dc61eb472c0 For more information please download “TOP 1 Markets” at APP store or google play. https://play.google.com/store/apps/details?id=com.top1.trading.forex.commodity.cryptocurrency.indices top1markets： https://itunes.apple.com/my/app/id1461741702 top one： https://itunes.apple.com/tw/app/id1506200136
With Bitcoin Suddenly Surging, Canaan Stock Is Also Going Up Today
In addition, in Forex, with a little bit of money, you are able to control bigger market positions using the leverage or margin trading. Effect of 1:100 is common in the Fore marketplace. It permits you to control numbers 100 times bigger than your capital, whilst leverage of 1:1000 and 1:500 are available with a few businesses that are offshore. The Forex market can be traded anyplace and everywhere. As long as you have access to web and a pc, you have the ability to trade the Forex market. An important issue to consider before leaping to trading currencies is it is worth practicing with"paper money", or"fake money", online demo account. Most foreign exchange agents have demo accounts where you are able to download their trading system and training in real-time with real market information but with"virtual currency". While profitable demonstration trading cannot guarantee your success with real money. best forex brokers There are numerous advantages of the Forex market over several kinds of financial trading. There is 1 type that springs to mind, when speaking about different investments that are accessible to everyone. Even the Forex or foreign exchange market has many advantages over other types of trading. Because it is an OTC (over-the-counter) market, the Forex market is open 24 hours daily, unlike the regular stock or commodity markets. Most investments require a substantial quantity of money until you're able to make the most of this investment opportunity. Everyone can enter the marketplace with just as little as 1 to trade a"micro account", which enables you to open positions of 1,000 units. One lot of 1,000 units of currency is equivalent to 1 contract from account that is micro. Each"pip" or"tick" (lowest currency rate movement down or up ) is worth $0.10 profit or decrease, depending on wheather you are going with the Marketplace or against it Forex is among the most liquid markets. best forex brokers in uk When trading currencies on the spot Forex market you've got complete control of your capital, which means that you can purchase and sell your positions anytime throughout market stage. This is a definite benefit because, if you will need to utilize your account cash, it may be obtained without additional commission or waiting intervals. Many different sorts of investments need holding up your money . Forex dealers may be profitable in bullish or bearish market conditions. Stock market traders want stock prices to grow to be able to take a profit, since short-selling is an issue to limits in stock trades. Forex dealers may produce a profit . Forex Currency trading is considered risky but with a trading platform that was fantastic to very decent money management skills, and a certain level of self-discipline, the risks of Forex trading can be lessened. brokers reviews
Become a financial investor with £300 and make £50 for doing nothing
Good Day! If you are looking for a quick easy way to earn £50 in commission then you are in the right place. Wether you're a student, full-time/part time worker or unemployed you can do this easily in 30 minutes or less. Many people are promoting forex programmes that only benefit themselves and probably offer you a book that explains nothing nothing more than you can learn on babypips.com I offer an educational group on an app called telegram (You can download it off the App Store, Android store or windows store.) And we can help you become traders not by selling worthless signals but by teaching you how to trade independently, a lifetime service for free. Now all this sounds too good to be true right? And what about that '£50 commission you told me about?' Well I work with a brokerage that when I get signed up and you trade with them I earn commission, For you doing so I am willing to give back to my team £50 via PayPal, Skrill or BTC, whatever floats your boat as a way of saying, Since you helped me, i'll help you. Plus I am offering you another investment opportunity in yourself, The way I think about trading on the financial markets is not a 'Get rich quick' scheme, or a 100% Guaranteed profit making strategy. I Just like many other traders have had bad weeks/months on the markets but the way to overcome it is to manage your risk and to make sure your bad weeks or months are nothing compared to your good ones. If you invest £1000 into a savings account and leave it there on say your 0.01% interest rate for a year you now have £1010. Congratulations you bank has now done for you what you could do in a week easily. You can open a trade on the lowest risk possible and make that if you find the right swing in the market, which with the right guidance and mindset and experiment, is not all too hard to do. Depositing with a broker is like depositing into a bank account. I can 100% guarantee there will be someone reading this thinking this is a scam, they are just going tot take your money and run. Be assured that I never see your money, when you hand over money to deposit cash into your bank account do you see your cashier take it and put it in their wallet/purse and then it not show up into your account? You are simply depositing money into your own account that only you will have access too and it is there for you to do what you would like with, you can be risky and trade big though I wouldn't recommend this, if you want to though I think you shout find the swing that would work the best for it, find every confirmation possible and enter where there is lowest risk to your account. But for most traders actually wanting to make a steady investment on their capital they can trade low risk, find the swings exactly how I just mentioned and grow your account bit by bit. As I said previously we offer training in the markets and this is exactly what we are trying to achieve. We don't charge a monthly service fee unlike most in this line of work, instead we actually make our living trading and use the commission from the broker as a service charge, basically like a tip to our weekly profits we use for leisure or to take the Mrs out for dinner :) If you are interested or have any questions drop a message to either me privately or if you think it is beneficial to everyone reading then add it to the bottom of this thread. We are more than happy to speak to you over telegram 1-1 and if you need to you can voice call over the app too. However you must be 18+ have some sort of ID and credit/debit card to sign up with the broker. ** If you are unsure when signing up with the broker you can research them/call them whatever you like. We only work with brokers that are registered under the FCA (Financial Conduct Authority)
funny to see that subject pop up again. it was what drove me insane enough to find this sub in the first place. at any rate, the problem is not the bots. I thought it was, but those are just part of the parasitic ecosystem. but to get that, first we need to take a few steps back on web history, ad serving, UX, tracking technology and media advertising. too lazy to gather links, but you know, do your googlin'. I assume that most of you are fairly web literate here, but I'll try to go down into the bare bones as much as possible for those who aren't. so let's start with a basic question - what is a web visitor anyway? from the standpoint of a normal person, that would be a person browsing a given website or piece of content. from the standpoint of technology however all you know is that some device has downloaded content from your server using the http protocol. thanks to the wonderful technology of web browsers, you can plant browser cookies on a visitor - stuff that's used to remember if they logged in, what their preferences are, stuff that your service can read from the device. it also serves usually very basic telemetry like last visit time, session time, and so on. this, over time has evolved in what we call browser fingerprinting, a convoluted bunch of technology that allows websites and web services to uniquely identify you. it still doesn't know if you're a human or not, but from the standpoint of the web technology, you're a visitor. now back in ye old days of the web, when the first banner ads were springing up, these were important questions. most consumers were still to be reached on traditional media channels, and ad spend would have to be justified somehow on the risky ventures of online business. so beyond traditional polls that would infer the value of visitors, websites would start tracking number of visitors, time on page and so on. these were used to milk the advertising cow so to speak, and it gave in to some funny developments like the creation of the popup ad - if I recon correctly on geocities, where they would just but the ads everywhere until some big auto company noticed that they're appearing on porn sites. so - put the ad in the popup, and you can claim it's not in the context of porn! around this point in time the online ad business is still pretty low tech. you actually have to call a physical human being, they send you ppts and pdfs, you send back image files and excel sheets, you wire money, the ads run, and so on. this is called direct sales, and it's tracked again by counting a bunch of visitors, and telling you how much impressions and clicks your marvelous creatives and ad budget generated. now enter google - or more precisely, a technology firm called doubleclick that was to be acquired by google. they developed a tool for automatic ad serving, later to be called programmatic advertising, that keeps the pesky sales dude out of the loop and achieves reasonable amounts of scale for a more hefty price - after all, if the sales are automated, you get a bidding war for attention between different advertisers, and you're paying for clicks. so you can see how this was a strategic move for google - they already had the most valuable data available in this situation. they were seeing in real time what people were searching for, and using the programmatic ad serving system, you could effectively bid not just for general attention - but for attention with an intent to buy. ...and the way that google got this data is because they indexed the web, using bots. at least GoogleBot would identify itself as a site visitor, but in the meantime they developed a service for websites to comprehensively track their own visitors and where they were coming from and what they were doing on your website. incidentally, you could also put on google's ads on your webpage to earn quite a bit of money, as content relevant ads would be shown through the doubleclick system. this kicked off two things: one, the ability to classify your website visitors into different clusters and segments allowed businesses to start tailoring the appearance of the website or service to fit that specific audience segment, starting off the great fracture - segmentation of the web (in the sense that two people viewing the same website at the same time were not seeing the same thing) two, it created a very strong financial incentive for people to trick google into thinking they were having actual human visitors that would click on ads, when in fact they were bots. in an even funnier twist, some of them were from browser hijackers, commonly known as malware at the time, which google cross-financed. look up download valley and crossrider. at the cross section of the above two, you had one interesting twist: websites that would appear differently to the security bots or the compliance officers of Google as they would to fake visitors or malware jacked human beings. the former would get a benign looking website, while the latter would get bombarded with auto clicking ads. this kicked off the billion dollar arms race called online advertising fraud. I'm not here to shed a tear for big money corps bleeding money. the real fallout lay somewhere else, but for that you have to understand that you never really saw the real internet, you only saw your corner and the one that was personalized for you. but if you ever had the pleasure of watching daytime TVs or off channels and witnessing the ads, you could kind of infer what kind of audience must be watching these shows generally. from quite clear rip offs to magic number lotteries and television fortune telling, these sorts of programming was aimed at the most gullible, bought for pennies, where the smallest audience portion had to be converted into a money making operation. ...and with audience segmentation and data gathering, that was now possible at unprecedented scale, automatically. so big was the scale in fact, that it gave birth to an entire new beast of an industry called affiliate marketing, where instead of a regular payroll, you'd get a cut of the sale should you figure out an angle on where to push whatever fucking bullshit the vendors were offering to whoever the fuck would be dumb enough to click on an ad and buy. (the funniest story I recall was someone pulling five figures a month because he figured out that if you buy ads on anime-hentai pages and sell PUA shit courses and e-books you'd make a killing) at any rate, affiliate marketing brought with it the killer landing page, the thing that's supposed to hammer the nail in the coffin once you get through the banner ad. the earliest form of deceptiveness in memory comes from various pirate sites, that had fake download buttons as banner ads and virus alerts as the landing pages. but then at some point, some schmuck realized that for certain type of products, like diet pills or forex trading or whatever, the best lander is in fact a fake news page that comes packed with comments and all. that would convert like crazy, because it had the appearance of social proof. until at least the lawsuits came raining down, and these sorts of landing pages and campaigns for being banned left right and centre on all platforms. which just launched a new arms race as the campaigns would be disguised for the bots doing the checkups, and aged facebook profiles would start selling for like 5K USD - these people were making 30-40k a day, they could afford to spend that much to continue running the shop. speaking of facebook - it came just about the right time for the shit to brew max total. first they were unprecedented in the amount of data they were getting off of their users, and they came just in time to catch the full swing of what we call the 'responsive web' - that no user at the same time would see the same thing on their page, it was all allocated through an intricate web of recommendations, running real time, based on previously gathered and forecast behavioral data. it also ran on one simple premise: take over the starting page position from google for most people, then they do not have to justify, ever, any ad spend that takes place on their platform, as long as it performs. furthermore, it was completely lacking any revenue share sort of scheme (save for the short period of facebook gaming, see Zynga), thus there was no incentive for the amount of bot traffic that the previous internet era had bred. instead, it came with an entirely different one - bots that would offer social proof in the way of shares and likes, but would not directly risk the business model, thus giving no incentive for facebook to fight them. (note that google didn't do much jack shit either besides indiscriminately penalizing websites it deemed suspicious when they reached critical payout thresholds) the rest of the story you kind of sort of know. how the obama campaign was brilliant in using the new social media to inspire hope and blah blah blah, kicking the door open for big money politics who could hire the best snake oil salesmen in the market, who had the data and as you can see from the above, had the ethical standards of a shoe. at around 2014-2015 the press (the mainstream media) started to raise question about the duopoly, the buzzword of filter bubbles started appearing, not entirely unrelated to the fact that facebook by this time cannibalized their traffic with a fucking embedded share / like button and started charging money for them to reach their own audience. after 2016 the cries of fake news were everywhere, because there was no online space left which everyone was viewing the same way, and you had no way to verify what the person next to you was looking at. since then, we've all become grandpa yelling at the television set, with nobody around us seeing what we're seeing on the screen, so we're being accused as bots and looking for bots under the carpet. but it's been a long way coming, and the bots are honestly the least of our worries. trust me, I went bankrupt over that one. truth or fake doesn't even begin to describe the magnitude of the problem: more like we entered the phase where every word, event or picture is defined by who ever the fuck wins the auction over it, as the marketers of human attention grind the gears of the money mill without even understanding how fast they're digging towards hell. don't believe me? look around the marketing and advertising related subs these days. the priests are eating the indulgences, and we're only now entering the period of deep fakes, good algo generated audio and good enough NLP. and in the meantime, the shadowrunners running up between two corp headquarter-highrises are skinning your belief systems. so the best you can do is really, not litter the remnants of cyberspace which are not being mined, astroturfed or being pulled apart by the algos. no human connections on a nuclear trash heap mate.
Triton Capital Markets — How to Trade with MetaTrader 5
Triton Capital Markets offers the incredible MT5 to its dealers, permitting them to exchange various resources, for example, on forex, fates, and, with adaptable just as no re-cites, no value dismissals and zero slippages. A center advantage of the MetaTrader 5 stage is that you can exchange from anyplace and whenever from the solace of your cell phone and tablet. This empowers a broker to exchange their advantages of decision from any internet browser and any gadget. Moreover, the MT5 stage offers, exchanging signals and, and all the accessible devices and highlights can be utilized from a solitary incredible. Here is the thing that to do to encounter the full intensity of the Triton capital Markets MetaTrader 5: 1. Training As referenced above, MetaTrader 5 is stuffed with various highlights and exchanging assets, which are intended to upgrade your exchanging exercises. It is critical to find out pretty much all the highlights and their pertinence to guarantee that you are well prepared to exploit the full intensity of the stage. From the accessible 7 resource class types, various exchanging devices, pointers, and graphical items, to 6 distinctive request types, numerous robotized systems, and market profundity, you may have the option to completely misuse the crude intensity of the MT5 stage if you set aside some effort to teach yourself on all the accessible functionalities of this natural stage. Triton Capital Markets additionally has various instructive materials explicitly on the MT5 exchanging stage that are open for nothing in our ‘ area. Make certain to exploit the educational and amicable eBooks and recordings that disclose in detail how to exchange money related resources online proficiently. 2. Installation Here are the base framework prerequisites for utilizing Triton Capital Markets MT5 on your PC: Windows 7 Operating System or higher (64-piece framework suggested) Pentium 4/Athlon 64 processors or higher (All cutting edge CPUs ought to have the option to help this) If you mean to be a substantial client (For example, opening different outlines and using numerous EAs), you could think about increasingly incredible equipment choices Follow the means underneath to download and introduce Triton Capital Markets MT5 on your PC: 3. Add Your Request If you have just signed into your Triton Capital Markets MT5, it is presently an ideal opportunity to estimate the costs of your preferred resource. There are a few different ways to put in a request on MT5: Snap-on Tools on the Menu bar. At that point select ‘New Order’ On the Market Watch window, double-tap on the benefit you wish to exchange (you can likewise right-tap on your ideal resource and afterward select ‘New request’) Open the Trading tab on the lower terminal and select ‘New Order’ Press F9 for a single tick exchanging on the outline of your preferred resource At the point when any of the above alternatives is applied, the ‘Request Screen’ will spring up. The screen will have a tick graph on its left side and customizable request subtleties on the right. The tick outline shows the offer and asks costs, and along these lines, the constant spreads (the contrast between the offer and ask costs). The request subtleties on the privilege are: Image — This is the benefit you wish to exchange. Request Type — You can pick between Market Execution and Pending Execution request types. Volume — This is the amount (in part measures) that you wish to exchange, of the chose hidden resource. On a standard record, 1 part size is what could be compared to 100,000 units, which commonly implies that will be around 10 US dollars (USD) on most resources. Stop Loss and Take Profit — You will have the option to join stop misfortune and take benefit orders on the entirety of your exchanges. Stop misfortune orders when the advantage value moves against you, while take benefit orders permit you to book benefits when the benefit value moves in support of yourself. Remark — You can include any notes concerning any exchange of the remark segment. This is perfect for merchants that report their exchanging exercises. Exchange Any Time and From Anywhere The Triton Capital Markets MT5 stage likewise has a web form that is open on both portable and work area programs. There is likewise a downloadable versatile MT5 App that is good with both Android and iOS cell phones. This gives the accommodation and adaptability to exchange from anyplace. Besides, you can likewise sign in over the various stages utilizing single login certifications. MetaTrader 5 — The Benefits of Trading with Triton Capital Markets Triton Capital Markets is an honor winning and which furnishes brokers with all the devices, administrations, and highlights required to satisfy one’s full exchanging potential. Guideline — Triton Capital Markets is a managed dealer, giving merchants genuine feelings of serenity that they are joining forces with an agent that works inside the rules as set out by perceived, global administrative bodies. Natural Trading Platforms — Triton Capital Markets gives its dealers access to a wide decision of top-quality and incredible exchanging stages including the exceptionally famous MT4 and MT5 exchanging stages. A Choice of Trading Instruments — Traders at Triton Capital Markets can get to a decision of exchanging instruments including digital forms of money, stocks, products, records, forex sets, and securities. Wellbeing and Security — Safety and Security — At Triton Capital Markets, every one of the customers’ assets are held in an isolated record. Besides, each record has negative equalization insurance to guarantee that a dealer’s record never goes under zero. Secure Payment Options — For installments, Triton Capital Markets gives access to a wide assortment of, which incorporates charge cards, wire move. Complete Educational Resources — Triton Capital Markets gives its brokers access to a wide decision of instructive materials including recordings, eBooks, online courses, articles just as access to Sharp Trader, our special exchanging foundation. Proficient and Responsive Customer Support — You can contact the multilingual Triton Capital Markets client assistance just as access to a committed record director.
Why I moved on from Robinhood to a proper broker (and am not looking back)
Hello fellow autists. It has now been around two weeks where I've moved on from Robinhood and am now using a proper broker (TD Ameritrade, using their "Think or Swim" mobile app / desktop app). I had been using Robinhood for about 1.5 years, but didn't realize the vast amounts of benefits you get at a proper broker (described below). I wish someone had told me about all this when I first started trading, so now I'm passing on this knowledge to youuuuuu. Perhaps other brokers have most if not all of these benefits, but I don't got experience with them.
Pretty cheap trades - While the main benefit of Robinhood is that its free - you can actually get pretty cheap trades with TDA. What you have to do is open a support request with them, and ask them to price match "Tastyworks" (https://tastyworks.com/pricing.html). You TELL them that you want them to price match their fees, or you'll leave etc... Can even ask for cheaper fees if you want. You can also get 300 free trades when you first sign up , and even free money (up to $600) if you deposit a LOT.
Practically unlimited day trades (for stocks and options) - this one was a big one for me, as I’m poor and have less than $25,000 in my trading account. You can ask for a “tier 2 cash account”, and you can do as MANY day trades as you want … but only if the money is “cleared”. Every time you make a trade, the money will clear the next day. What this means is that you can place a trade with 50% of your money in the morning, and then later in the day make another trade with the other 50%, then you can sell out of both positions. The next day the money will be cleared and you can continue trading. I went from doing that dumb 3 day trades every 5 days… to about 5-20 day trades every single day.
Charts have superb indicators in them - Here’s what my “charts” setup looks like - https://i.imgur.com/EiiWEHe.png - You can see I can monitor multiple charts at once (HUGELY beneficial), and I can see the 200d ma, VWAP, EMA clouds, and low and high of day. Hundreds of others to add if you want, and they all work on mobile too.
Combine having “unlimited” day trades with seeing proper indicators on a chart . . . and you can do my new day trading strategy of buying a few options when you see a setup occur (such as a stock going below the low of the day, or buying after it breaks the 200d ma). Then when the price hits a resistance point (such as the pre market highs), you can sell 50-75% of the contracts and lock in profits. Then you can add to your positions on pullbacks or just let the rest ride.
Good referral system - Refer someone and you can get either $50 or 10 free trades (with Robinhood I only ever for like $5 - $10 stocks)
Paper trading - Think or swim has paper trading, so you can practice losing money before you actually lose your real money
Stop loss on options - In a position but have to step out to a meeting? You can have little fear of the market going against you as you can put in stop losses for your options. As you set the stop loss for the price of the contract, it will even tell you what approximate price the stock will be
Market buy in and out of options - With Robinhood, if I wanted to get out of an option I’d put in a sell and it would put the price in between the bid and ask. Half the time it wouldn’t sell right away, so I’d have to cancel it then put in another (all the while the price keeps tanking). Now I can easily market sell something and boom it’s sold. You usually only want to do this if the option has high open interest / volume / tight bid & ask, which you can easily see. Also there’s no “this option can only be bought in 5 cent increment” bullshits
Buy today’s SPY option - lose your money even faster by getting same day expiry for SPY etc…
Easily see the prices for multiple options - Here’s what I see to buy into options (https://i.imgur.com/Ug8pskt.png). I can easily browse multiple strikes for today, and click into other dates to see those. No more clicking into an option… then clicking into it again to see the open volume etc… You can also see the IV on the very right of the tab name (with the date on it)
Excellent customer support, can live chat - Compared to RH where its practically 0 support and GG if you run into an issue
Transfer your IRA and day trade or do options on it - Lose your retirement funds too if you want. If it's a Roth IRA, gains are tax free (but losses aren’t a tax right off)
You can also link all of your accounts... And then trade with them all at once. So in a few clicks I can take a single trade that gets executed on my day trading account, my Roth IRA, and my traditional IRA
Excellent mobile app and desktop app that syncs - Tons of other features I’m leaving out too
Forex and futures - If you want, you can do forex and futures
Just download “Think or swim” and try out the “paper trading” at least, it's all free. You can also open a regular account and just do all of your chart viewing and option browsing, then go into RH if you want to buy in there. PM me if you have any questions :D
I was going through old emails today and came across this one I sent out to family on January 4, 2018. It was a reflection on the 2017 crypto bull market and where I saw it heading, as well as some general advice on crypto, investment, and being safe about how you handle yourself in cryptoland. I feel that we are on the cusp of a new bull market right now, so I thought that I would put this out for at least a few people to see *before* the next bull run, not after. While the details have changed, I don't see a thing in this email that I fundamentally wouldn't say again, although I'd also probably insist that people get a Yubikey and use that for all 2FA where it is supported. Happy reading, and sorry for some of the formatting weirdness -- I cleaned it up pretty well from the original email formatting, but I love lists and indents and Reddit has limitations... :-/ Also, don't laught at my token picks from January 2018! It was a long time ago and (luckliy) I took my own advice about moving a bunch into USD shortly after I sent this. I didn't hit the top, and I came back in too early in the summer of 2018, but I got lucky in many respects. ----------------------------------------------------------------------- Jan-4, 2018 Hey all! I woke up this morning to ETH at a solid $1000 and decided to put some thoughts together on what I think crypto has done and what I think it will do. *******, if you could share this to your kids I’d appreciate it -- I don’t have e-mail addresses, and it’s a bit unwieldy for FB Messenger… Hopefully they’ll at least find it thought-provoking. If not, they can use it as further evidence that I’m a nutjob. 😉 Some history before I head into the future. I first mined some BTC in 2011 or 2012 (Can’t remember exactly, but it was around the Christmas holidays when I started because I had time off from work to get it set up and running.) I kept it up through the start of summer in 2012, but stopped because it made my PC run hot and as it was no longer winter, ********** didn’t appreciate the sound of the fans blowing that hot air into the room any more. I’ve always said that the first BTC I mined was at $1, but looking back at it now, that’s not true – It was around $2. Here’s a link to BTC price history. In the summer of 2013 I got a new PC and moved my programs and files over before scrapping the old one. I hadn’t touched my BTC mining folder for a year then, and I didn’t even think about salvaging those wallet files. They are now gone forever, including the 9-10BTC that were in them. While I can intellectually justify the loss, it was sloppy and underlines a key thing about cryptocurrency that I believe will limit its widespread adoption by the general public until it is addressed and solved: In cryptoland, you are your own bank, and if you lose your password or account number, there is no person or organization that can help you reset it so that you can get access back. Your money is gone forever. On April 12, 2014 I bought my first BTC through Coinbase. BTC had spiked to $1000 and been in the news, at least in Japan. This made me remember my old wallet and freak out for a couple of months trying to find it and reclaim the coins. I then FOMO’d (Fear Of Missing Out”) and bought $100 worth of BTC. I was actually very lucky in my timing and bought at around $430. Even so, except for a brief 50% swing up almost immediately afterwards that made me check prices 5 times a day, BTC fell below my purchase price by the end of September and I didn’t get back to even until the end of 2015. In May 2015 I bought my first ETH at around $1. I sent some guy on bitcointalk ~$100 worth of BTC and he sent me 100 ETH – all on trust because the amounts were small and this was a small group of people. BTC was down in the $250 range at that point, so I had lost 30-40% of my initial investment. This was of the $100 invested, so not that much in real terms, but huge in percentages. It also meant that I had to buy another $100 of BTC on Coinbase to send to this guy. A few months after I purchased my ETH, BTC had doubled and ETH had gone down to $0.50, halving the value of my ETH holdings. I was even on the first BTC purchase finally, but was now down 50% on the ETH I had bought. The good news was that this made me start to look at things more seriously. Where I had skimmed white papers and gotten a superficial understanding of the technology before FOMO’ing, I started to act as an investor, not a speculator. Let me define how I see those two different types of activity:
Investors buy because the price is less than the value they see in the investment. Speculators buy because they think that someone will pay more in the future than they are paying now.
Investors trade on information (The white paper was really well-written, had a clear technical advantage over other alternatives, and addresses a need that I can understand and value.) Speculators trade on sentiment. (Buy the rumor! Sell the news!)
Investors usually look at the investment and themselves and can describe why they purchase in those terms (ABC-Coin provides (service) that isn’t addressed yet and matches (requirements) for an investment.) Speculators usually describe why they bought something in terms of how other people think (I think that other people think that the price will rise, so I want to get ahead of that.)
Investors don’t necessarily check the price every day. The can, and very often I do, but it isn’t required because fundamentals don’t often change on a dime. Speculators need to be glued to a price feed, because sentiment very often changes on a dime.
Investors like ideas, people, business plans, and market opportunities. Good ones are like Spock. Speculators like trends. They are tribal.
Investors have a longer time horizon than speculators. In cryptoland, the notion of a “longer” time horizon is still laughably small (months) compared to traditional markets, but it certainly isn’t weeks or days or hours, which is whre speculators often live.
So what has been my experience as an investor? After sitting out the rest of 2015 because I needed to understand the market better, I bought into ETH quite heavily, with my initial big purchases being in March-April of 2016. Those purchases were in the $11-$14 range. ETH, of course, dropped immediately to under $10, then came back and bounced around my purchase range for a while until December of 2016, when I purchased a lot more at around $8. I also purchased my first ICO in August of 2016, HEAT. I bought 25ETH worth. Those tokens are now worth about half of their ICO price, so about 12.5ETH or $12500 instead of the $25000 they would be worth if I had just kept ETH. There are some other things with HEAT that mean I’ve done quite a bit better than those numbers would suggest, but the fact is that the single best thing I could have done is to hold ETH and not spend the effort/time/cost of working with HEAT. That holds true for about every top-25 token on the market when compared to ETH. It certainly holds true for the many, many tokens I tried to trade in Q1-Q2 of 2017. In almost every single case I would have done better and slept better had I just held ETH instead of trying to be smarter than Mr. Market. But, I made money on all of them except one because the crypto market went up more in USD terms than any individual coin went down in ETH or BTC terms. This underlines something that I read somewhere and that I take to heart: A rising market makes everyone seem like a genius. A monkey throwing darts at a list of the top 100 cryptocurrencies last year would have doubled his money. Here’s a chart from September that shows 2017 year-to-date returns for the top 10 cryptocurrencies, and all of them went up a *lot* more between then and December. A monkey throwing darts at this list there would have quintupled his money. When evaluating performance, then, you have to beat the monkey, and preferably you should try to beat a Wall Street monkey. I couldn’t, so I stopped trying around July 2017. My benchmark was the BLX, a DAA (Digital Asset Array – think fund like a Fidelity fund) created by ICONOMI. I wasn’t even close to beating the BLX returns, so I did several things.
I went from holding about 25 different tokens to holding 10 now. More on that in a bit.
I used those funds to buy ETH and BLX. ETH has done crazy-good since then and BLX has beaten BTC handily, although it hasn’t done as well as ETH.
I used some of those funds to set up an arbitrage operation.
The arbitrage operation is why I kept the 11 tokens that I have now. All but a couple are used in an ETH/token pair for arbitrage, and each one of them except for one special case is part of BLX. Why did I do that? I did that because ICONOMI did a better job of picking long-term holds than I did, and in arbitrage the only speculative thing you must do is pick the pairs to trade. My pairs are (No particular order):
I also hold PLU, PLBT, and ART. These two are multi-year holds for me. I have not purchased BTC once since my initial $200, except for a few cases where BTC was the only way to go to/from an altcoin that didn’t trade against ETH yet. Right now I hold about the same 0.3BTC that I held after my first $100 purchase, so I don’t really count it. Looking forward to this year, I am positioning myself as follows:
ETH will still be my core holding. It is the “deepest in the stack” crypto investment that I have. “Deep in the stack” is a programming term that gets at the idea that most software is built on other software. If you just think about your notebook, you have your OS, and programs run on that. But even inside the OS there is a stack. The bottom of your stack is the kernel, and on top of that are the drivers, protocols, and other layers that allow the programs to talk to the OS, the hard drive, the screen, the mouse, your printer, etc. You can change your mouse or printer easily. Changing things deeper in the stack becomes harder and harder. ETH is deep in the crypto stack, so is very hard to dislodge – Around 60 of the top 100 cryptocurrencies by market cap run on top of Ethereum, so getting rid of Ethereum is something that would take a long time to do.
DNT, QTUM, ZRX, and OMG are all, to varying degrees, “deep in the stack” tokens that, once established, will be very hard to dislodge.
That said, I am peeling away some of my holdings into USD right now, because big changes are afoot and they are going to cause market disruptions. I’m going to come right out and admit that this is speculative, but I’m also going to back it up with some non-speculative facts.
The SEC has been sending out hundreds of subpoenas to cryptocurrency organizations over the past 3-4 months. These subpoenas are simply asking for information and nobody has been charged with any crimes or misdoings, but it is clear that the SEC is getting together information so that they can begin to regulate cryptoland. When that happens, other countries will follow, and that means:
Some tokens will be deemed outright scams and people will be prosecuted.
Some tokens will be deemed securities and will be regulated.
Some tokens will not be deemed scams or securities and will continue as they have.
Looking at this, it is clear to me that the tokens that escape prosecution and regulation should do better, but the short-term impact will be brutal and ugly. It would not surprise me at all to see a 50% drop in overall market cap within Q1-Q2, with Q1 being more likely.
Cryptoland has always been a bit nuts, but it is more nuts now than I have ever seen it. Back in 2011-2014 it was a freaks-n-geeks show where people were all about the technology and I would sit around for a 3-day weekend installing a *nix VM on my Windows machine so that I could compile the most recent source and run a CUDA SHA-256 routine rather than thrash my CPU. If that doesn’t make sense to you, you wouldn’t have even thought about being involved.
Now, people see Bitcoin advertisements in their Facebook feed and think “I gotta get on the BTC train!” before going to Coinbase and buying some with a credit card. They don’t know anything about crypto, and they are getting eaten alive – It is no coincidence that BTC peaked after the Thanksgiving holidays when people sat around the table and Janice got Uncle Mike and Cousin Bob all excited as she talked about going to Cancun for Christmas because of her crypto winnings. Huge amounts of fiat got transferred from newbies to BTC whales during this period, and once the whales were done, BTC had dropped from $20,000 to $12,000. It’s now back at $15,000, but for people who bought at a higher level, this sucks. As a result many have moved from BTC to ETH, with the single biggest money flow in crypto in December being the BTC à ETH flow. As a result, it’s no coincidence that ETH is at all-time highs now. The thing is, though, that even most people that moved from BTC to ETH really have no idea what they are doing. They are acting on buzzwords and emotion. They are speculators and are going to get crushed.
The stock market is quite high right now, but people are starting to worry that it is too high and that we are going to enter into a period of inflation again. This has caused gold to go up a lot the last quarter and is likely also responsible a bit for the rise in cryptos. If this view is correct, then cryptos stay stronger than if that pressure wasn’t there. If wrong, then cryptos will swing down as money exits cryptoland for more traditional markets.
I am spending most of my time and money on the arbitrage effort. The nice thing about arbitrage is that it works as the markets go up, and it works as the markets go down. When markets are too volatile, however, arbitrage can get very messy and dangerous, with each trade generating a loss instead of a profit, so I am working right now to tune the algorithms to take into account rate-of-change and add in some circuit breaker triggers. Once this is done I will expand those operations.
I am getting much more serious about systems security.
I have a Nano Ledger and recommend that anyone with >$1000 of crypto have one. The Trezor is also supposed to be good, but I haven’t used it.
I will set up a dedicated *nix notebook that is used for nothing except my crypto work. All it takes is one keylogger to get on your PC/Mac and your crypto is gone. What is on your Nano Ledger will be OK, but they will sweep out your exchange account or Coinbase account faster than you can type. A standard Linux installation with Chrome and nothing else is as about as secure as you can get in the civilian world.
If you don’t use LastPass or a similar password manager yet, you need to do that. Your password to LastPass should be at least 16 characters long and should not have a recognizable English word in it. If you think that “Iluvu4evah” is a secure password, you’re wrong.
Hackers know that “4”=”for” and “u”=”you”. Writing a script to substitute those in is trivial if they want to write the script, but it’s much easier for them to download one of the many, many programs out there that already do this.
If your password contains any string of numbers from anything that can be associated with you at any time in your life, it is insecure. Take those numbers out of the character count because they are an insignificant barrier to cracking your account.
The good news is that you probably won’t be targeted, but if you ever mention online that you are doing anything significant in crypto, that chance increased enormously.
*Never* talk with *anyone* about how much you have in crypto. You’ll notice that I haven’t here. There is no reason to tell even a family member how much you have unless you are sharing a tax form. Sure, you may trust them, but all it takes if for someone to overhead someone else mention at a party that a relative got into crypto a long time ago and made a bunch of money. That person can also then be subjected to the $10 hack and force you to send all your crypto to them.
Your password to LastPass (Or equivalent.) should look something like this -> 6k0jQMoziX&D#4W8
Yes, it’s a headache. Imagine your headache, though, were you to open your account one day and find all of your money gone.
Looking at my notes, I have two other things that I wanted to work into this email that I didn’t get to, so here they are:
Just like with free apps and other software, if you are getting something of value and you didn’t pay anything for it, you need to ask why this is. With apps, the phrase is “If you didn’t pay for the product, you are the product”, and this works for things such as pump groups, tips, and even technical analysis. Here’s how I see it.
Technical analysis (TA) is something that has been argued about for longer than I’ve been alive, but I think that it falls into the same boat. In short, TA argues that there are patterns in trading that can be read and acted upon to signal when one must buy or sell. It has been used forever in the stock and foreign exchange markets, and people use it in crypto as well. Let’s break down these assumptions a bit.
i. First, if crypto were like the stock or forex markets we’d all be happy with 5-7% gains per year rather than easily seeing that in a day. For TA to work the same way in crypto as it does in stocks and foreign exchange, the signals would have to be *much* stronger and faster-reacting than they work in the traditional market, but people use them in exactly the same way. ii. Another area where crypto is very different than the stock and forex markets centers around market efficiency theory. This theory says that markets are efficient and that the price reflects all the available information at any given time. This is why gold in New York is similar in price to gold in London or Shanghai, and why arbitrage margins are easily <0.1% in those markets compared to cryptoland where I can easily get 10x that. Crypto simply has too much speculation and not enough professional traders in it yet to operate as an efficient market. That fundamentally changes the way that the market behaves and should make any TA patterns from traditional markets irrelevant in crypto. iii. There are services, both free and paid that claim to put out signals based on TA for when one should buy and sell. If you think for even a second that they are not front-running (Placing orders ahead of yours to profit.) you and the other people using the service, you’re naïve. iv. Likewise, if you don’t think that there are people that have but together computerized systems to get ahead of people doing manual TA, you’re naïve. The guys that I have programming my arbitrage bots have offered to build me a TA bot and set up a service to sell signals once our position is taken. I said no, but I am sure that they will do it themselves or sell that to someone else. Basically they look at TA as a tip machine where when a certain pattern is seen, people act on that “tip”. They use software to see that “tip” faster and take a position on it so that when slower participants come in they either have to sell lower or buy higher than the TA bot did. Remember, if you are getting a tip for free, you’re the product. In TA I see a system when people are all acting on free preset “tips” and getting played by the more sophisticated market participants. Again, you have to beat that Wall Street monkey.
If you still don’t agree that TA is bogus, think about it this way: If TA was real, Wall Street would have figured it out decades ago and we would have TA funds that would be beating the market. We don’t.
If you still don’t agree that TA is bogus and that its real and well, proven, then you must think that all smart traders use them. Now follow that logic forward and think about what would happen if every smart trader pushing big money followed TA. The signals would only last for a split second and would then be overwhelmed by people acting on them, making them impossible to leverage. This is essentially what the efficient market theory postulates for all information, including TA.
OK, the one last item. Read this weekly newsletter – You can sign up at the bottom. It is free, so they’re selling something, right? 😉 From what I can tell, though, Evan is a straight-up guy who posts links and almost zero editorial comments. Happy 2018.
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