Trading markets

It appears some of us are interested in the business of trading, hopefully for both fun and profit.
Here's a place to talk about that. I suggest two main categories. How to trade (timeless), and what are you trading now, and why, and how it turned out. Those tend to be missing from the pro boards, so pundits can have selective memory....but that's not all that is important. Being wrong is part of the game, and how to handle it and make money anyway is crucial, for just one example.
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The usual. Be nice, be informative, tell it like it is.

Re: Trading markets

Postby Doug Coulter » Thu Nov 11, 2010 12:05 pm

Well, looks like Curtis was right (often the case). I didn't check my email til it was too late to do anything yesterday, but I'd been selling a bit of this and that anyway, which I'll go and correct/edit in the log. I trade such weird stuff anyway, some of it is highly green today despite a huge tanking in the indexes, so I'm seeing only a "sigh" amount of losses against recent winnings. Happens pretty often when my pals see a big market move and say one of "you must be real happy/sad" -- but most of the money I make is on moves that don't affect the major indexes much -- I don't play those anyway, except in exceptions. Most of the time, it seems I make the most when the market averages are more or less flat.

Most of my net worth is tied up in other stuff too. All this land (about 50 acres now), which is about half trees, and half of the grass is pretty sloped for cropping, good for cattle, which is what it was used for before I got it. Buildings, tools, toys, vehicles and so on. Of course, most of my wealth isn't money -- it's people like those here, and oh yeah, I have a little money besides.

Gotta go run and sell the green stuff at least, while it's still green. I'd like to hear from Curtis if he thinks this is "it" or the beginning of another serious dip, or just a bad day because of Cisco etc.

I can't see how one guy+wife could really be self sufficient here -- we are trying for the game of it value, and the fun value. But the only way we could do it at our ages is with considerable help from gasoline powered tools. I think a chainsaw might be the best use of gasoline there is, really takes advantage of the energy density to do what amounts to harvesting energy gain from the woods. I get enough from just dead things or things I need to thin to keep the woodlots healthy, so I'll never run out of that unless climate changes quicker than the species of trees I have can adapt, or some pestilence shows up that kills a lot of them. Having said that, my favorite chainsaw is a 3 hp electric one I can run off the solar system or a small generator when in the woods.

Slightly more setup, but much more productive once going -- never have to start it, tune it, just sharpen it and use it, it has more torque than most gas ones that weigh twice as much, and it's fast. I may rig a generator on the PTO of my tractor and get rid of that need for lugging another, but usually just put one in the tractor cart. While not as slopy as W VA here, it's still a challenge to get around in any vehicle, including 4 wheelers -- they tend to be too wide to get between the trees, and can't handle the steep and deep gullies the creeks run in. But that tractor is a narrow Simplicity hydro-drive with weight and torque like a big one, and it goes anywhere -- need a road? It will make one. I commonly use it to pull big trucks out of the ditch when some idiot thinks a 4wd will get them out of anything. Not here! They all laugh at the tiny thing until I ask if they want out of the ditch or not, and then pull them out without even putting it in low gear, engine at idle.

I agree the base problem is simply too much human density, but I have zero clue how to address that one in any way that people would think of as "good". I think Malthus was right, just way too soon -- none of the things we are facing would be any problem with a lot less people. But, how to reduce, and who chooses? Very nasty territory to get into, philosophically.

And strangely (or not) we are already in trouble due to the reducing population growth anyway, with our systems that have the young caring for the old -- not enough young to do it with a decent loading on the young, which is inevitably going to lead to "issues" down the road a little. Our government for example, has stolen the money for our social safety net -- all those accounts are simply full of IOU's we can't pay. All that did is speed up the problem, it would have happened anyway at some point.

But we eat a lot more than we can decently grow without that being a more than full time job. We have water here and there in springs and small creeks, but getting it to where the crops would be is a real hassle, for instance -- the good spring is half a mile from where I sit and keeping a system working from there to here is so much work I gave up and just go over there with a tractor and haul it back as needed. Mostly we garden to get the very finest quality food available, it's clearly better than what you can buy in stores, tastier and of course very fresh.

What concerns me is that issue of productivity per man hour -- it's at an all time high at this level of unemployment which is in the 25% range when honestly measured. To me, this means that those laid off are the unproductive ones, and just having them in the workforce also costs productivity for the good people -- so this way might be more efficient? I know that when I look for help, I don't get the good quality I used to be able to find -- all those guys still have good jobs, so I've quit looking for now -- I get a flood of very nice looking resumes but in person, nah, all losers. So, what do we do with them? If we just cut them off, we got riots and crime. If we feed them, then it becomes attractive to become one of them, and causes ire among those providing for them. It's just a really hard question. We used to have things like world wars which seemed to handle that, but that's a pretty icky way to do that too, and it's not properly selective, though it does tend to cut down the "naturally violent" types ahead of the rest (who tend to volunteer), probably good that way if there's anything that can be said that's close to "good" about all that (not really).

I'd love to hear thoughts on that one, but probably on another thread here in water cooler. I spent a few hundred pages talking to "bionerd" about this in email, and she couldn't solve any of it either -- that's one square&level-headed lady, btw, we really covered the map with it all, and no one got emotional about it (which is unusual), just honest attempts to discover a solution to it all, no luck, but we both came away with a better understanding of the issues to be sure.

BTW, a self-back-patting fiction here in the USA is that we rose to dominance because we are something kind of special. I don't really feel that way -- we rose because the rest of the world except for us had just been bombed into the stone age -- while we had been building factories for the war effort. That made it kinda all too easy...
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets -a new manipulation trick

Postby Doug Coulter » Tue Dec 07, 2010 1:33 pm

I don't have a clue who is doing this, for starters, as it could be done by a lot of different players -- doesn't take much money.
Over the last 10 days or so, I've caught it twice and once made good money off it.

Someone is making odd large trades in premarket when there's zilch liquidity, and driving prices either way up or way down doing it.
The one I made money on was TBT -- in premarket the other day it was WAY down, which is weird because it's tied to US treasuries via options that don't trade then, and the underlying (usually) doesn't move that fast. Spotting that I bought a bunch early, premarket, and got that gain plus the 1.8% or so gain it made after market opened with it flat from the day before. It was worth picking up a day trader flag on.

Today, 12/7/10, someone did this with XRT, the retail ETF. It spiked huge in the morning due to premarket activity, then fell back to trend. If I'd had a trailing stop on this one (now I do!) it would have tripped out nicely above where XRT fell back to in the first few minutes -- the trendline.

It should be obvious how an alert trader can take advantage of these kinds of things, so I won't do detail here on that. If somehing goes WAY off, and there's no news, no reason, and it's like I said WAY out -- you can pretty much count on some kind of mean reversion or reversion to the trendline. Of course, there is often news when there's no news, obviously the big players got leaks from 60 minutes Ben Bernanke interview during the day the other day, before we got the leak on the news that night....and used it as a buy signal despite the markets being down over the lousy jobs reports. If that doesn't satisfy some definition of insider trading, well, it should.

Now, what is interesting to me is a possible slight variation on this one. Obviously in the two cases above, no one was fooled -- trading just more or less resumed at the trendline almost right away.

But what about a quick rise off the go in something that doesn't even trade extended hours (I'm thinking of say, BTE which very rarely has any trades out of normal hours). Or a quick gap.
Could it be that since no one is aware of this possibility it doesn't then just hop back to trend? Or in things that do trade almost 24/7 (gold) - should we accept a gap one way or the other without first checking overseas prices? Hmmm. Could things that have a lot of "religion" associated with them be easier to manipulate this way? People find it a lot easier to believe what they already believe should be true, after all. In the two cases above, it didn't "work"....but maybe sometimes it does.
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets

Postby Doug Coulter » Tue Feb 01, 2011 2:49 pm

Looks like my log has gone away due to lack of posts on it, but here's something fun I saw today.

http://seekingalpha.com/article/249984- ... macro-view

This guy had been a flaming democrat type, who I finally chided enough (both parties are full of it and it's pointless to argue one of them or the other) to get over that and back to what works in the market right now (later is for later). Funny video at that link.

My own trading has been going half decently or better, better insofar as I follow what market club tells me to do and don't get nervous and sell just before a big jump up, or too cowboy and put in too much too late just before the end of a runup, trying to be a little quicker than they are. Lemme tell you -- it's not worth it, just follow the rules (takes more patience and discipline than I often have) and you do better. I'm keeping up with the money I have been pulling out of the IRA by direct transfer, monthly, is about what you can say there -- good enough for now.

Gotten some good results off BTE (still VERY long, but it's scary-high valued right now, makes me nervous), CCJ, nice runup and back out, TKR, in and out, PALL in and out (should have just stayed in that one). Minimal precious metals other than that right now, they are looking pretty sick until the next thing triggers the fear premium solidly again. I think we may have a correction coming, this looks like a blowoff top to me (and a lot of others). Getting ready to short some things, like China...no, you heard right. It's a matter of time for them, and a little exposure might not be stupid. Cities with no inhabitants at all, same bank issues we had -- and the government is finding they don't have the command control over that they thought, they just go off-the-books (sound familiar?). So they remind me a lot of us, in about 2007 or so....right now, and I doubt they can fix things any better than the Bernank when it hits the fan. They do have a lotta real money in the bank, but it's not very liquid, so it's not really available -- Greek bonds, anybody? I don't think that with even less experience than we they are going to get the soft landing thing done -- no one ever really has managed that. Not looking at that for a next week trade, understand, just that it's in the picture at this point, something to look for. I've been short since about $47 on FXI...see chart.
Screenshot-2.png
China 3 month
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets

Postby Doug Coulter » Thu Feb 10, 2011 10:33 pm

Sorry about my lack of attention to the board in general, been busy buildint a new preamp etc setup for another neutron detector tube and trading. Meanwhile, having a somewhat interesting (for traders or macro economists) discussion with the Inflation Trader over here.

I'll post the cool stuff in a little while. Almost done, calibrated and put in service.
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets

Postby Doug Coulter » Sat Mar 05, 2011 9:59 pm

Well, these markets are so choppy right now even a day trader is losing hair, so I'm mostly out (needed a break and to do some fusor work anyway), but for a little energy, some junk bonds, and some PM's (all with trailing stops in the money!) -- got palladium when it went on sale some days back, nice pickup. Here's a fun video of T Boone Pickens telling an interviewer he's not even wrong. Gotta like that guy! He even says "it's just that simple" re where the real problems are in energy. ROFLMAO.

http://www.youtube.com/watch?v=d0nERTFo ... r_embedded



A good rap between the Keynesians and the Austrians. Well, not quite to the point, but good anyway. The real issues are the disparity of wealth distribution, which neither handle.
The trouble is discipline. What we have here now is fake Keynes -- spend when times are bad -- and even Kenny Galbraith would be spinning in the grave over this. They never are there when Keynes says "but also, store up money in the good times, so you have it without deficit spending in the bad" -- conveniently forgotten in all democracies where the plebes have learned they can vote bread and circuses for themselves with "someone else's money". That single fact -- that people receiving government largess can also vote -- has been effectively the end of every empire in history...And the trick of the socialists is to prevent any spread of that meme by simply insuring that everyone sees some of it, so in the limit, if you passed a bill that removed voting from those on the dole, it would remove everyone....and no one will go for that, right?

What inflation? The fed tells us it's no problem. I refute it thus (sans broken toe).
saupload_futures_performance.png
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Re: Trading markets

Postby Doug Coulter » Mon Mar 14, 2011 11:57 am

Well, Japan has really tossed us a transient. Looking back, this is either a repeat of the summer correction (which I think is most likely) or the start of the dreaded double dip.
I am personally nearly out of everything, in cash right now, a good thing it seems. Today has seen things like Uranium on fire-sale, CCJ down 16% so far. All the "precious" metals with industrial demand also down a goodly bit, along with most of the base metal miners and rare earths.

Some of this is obviously reduced demand as TM and others have shut down -- and cars are a big user of say palladium (PALL) and RE's (electrics).

But it seems to me, from a macroeconomic view, that all the demand reduction in these things is pretty temporary. Toyota won't be down for long, they'll be back making cars as quick as they can, you can count on that.

So, with due care, this looks like a buying opportunity is coming soon. After all, broken reactors and a need for power imply not less, but more demand for uranium. Demand didn't just go away for palladium, iron, RE's either -- just down a little bit. So if this is simply panic selling (and much of it sure looks like that) or a bunch of trailing stops triggering, we could bounce pretty well.

Or, like that summer correction, we could see a series of head fakes that at least in my case, I didn't read very well and made some losses in. But by money management I didn't lose much, and was "in" when things finally kicked in and climbed nicely again. I'll try to avoid that first part this go around.

Maybe this time we can get it right, catch no falling knives, and do OK if it really isn't that dreaded double dip. Time to be watchfully waiting! Be looking for opportunities in this mess. Even my local bank, STEL, which is a good money maker for me as it swings, got hammered hard. Nothing about Japan or really even most of the economy affects them, they are just sinking in the falling tide for no other reason than general fear, and if history repeats, will trade back up in normal range again as soon as the panic is over with -- they don't own a bunch of bad mortgages or anything like, though they did get stuck with some real valuable land around the lakes here when the developers failed. That will turn out to be a pretty decent accidental investment at some point anyway.

So, if this is what I'm guessing, we should see some real hard bounces here in some things. Could be wrong, and it might be good to be watching real close for awhile so as not to miss out if it's merely panic and not fundamentals. This is for me, the most difficult part of trading actively -- the hurry up and wait part. Clearly too soon to buy -- things are still heading down, but then if they turn up a bit, will that be a head-fake, or just a return to normal? Can't know, but....definitely time to pay attention. My luck in things (patterns) that look like this is I get burned going short either too soon or too late, so this time I may just do nothing for awhile.
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets

Postby Sergei Barna » Mon May 09, 2011 1:59 pm

The traditional view is that high short interest relative to float is a good thing for bulls since there is a "built-in demand" from the shorts and a possibility of a short-squeeze. But I've been thinking about this some, and wondering if it's really that simple. When someone sells shares short, not only the short interest goes up, but so does the long interest. For example, if XYZ has 300 shares outstanding and Al, Bob and Curt each own 100 shares, and along comes Doug who borrows Bob's 100 shares and sells them short to Curt. Since Bob still technically owns his shares and can sell them at any time, the longs between them hold 400 shares. So when a stock has large short interest, it doesn't only have a large built-in demand but also a correspondingly larger supply of potential sellers. In fact, if negative news comes out after the short positions have been established, there might be a lot more selling by the longs who are now holding more shares (100% + short interest%) than the float, and the price may fall a lot further if there was no short interest. Conversely, if positive news come out and the price goes up, the shorts will want to cover but there are also correspondingly more potential sellers. In other words, it's not clear to me that whenever we see large price increases in heavily shorted stocks that it's due to a short-squeeze.
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Re: Trading markets - why I don't use trailing stops

Postby Doug Coulter » Tue Dec 13, 2011 2:10 pm

A picture is worth a lot of words here. With Level II data, you see these all the time, it's a great way to manipulate markets by trigging stops on other players. This can be done just as easily with a rogue trade reported way high too.
TrailFail.png
Rogue or late reported trade would trip your stops!

In this case, it didn't seem to trigger a wave of sellings - but I've seen it all too many times. And of course, you'd be sold at the bottom if the "flash crash" lasted more than a couple trades or seconds. So, there's as yet no substitute for doing this manually and having to pay attention. Gotta write that trading code with a median smooth for this one!

Note, if the rogue trade isn't too far off market, this trick can give you some awesome buying and shorting opportunities, but if it's in the 10% off range - your trade is going to be canceled.
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets

Postby Doug Coulter » Mon Apr 21, 2014 9:01 pm

This had me genuinely laughing.
"Uncomfortably true charts about everyday life" - Monday humor

http://www.zerohedge.com/news/2014-04-2 ... ryday-life
Posting as just me, not as the forum owner. Everything I say is "in my opinion" and YMMV -- which should go for everyone without saying.
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Re: Trading markets

Postby Donovan Ready » Mon Apr 21, 2014 10:26 pm

Some of those are funny, some are truly sad. But Tyler's site is a good place. I'm glad you read there some!
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