On a side note I'm also watching closely Commerzbank !

First, let me preface this by showing the below picture...showing exposure levels:




THIS IS WHY IT IS VERY IMPORTANT FOR FRANCE that greece do not drown.....

They need their money back...all that exposure is not going to be good.

I dont follow these banks...actually, i am pretty much offlimits with regards to banks...too toxic for me...but you seem to be doing well with them.

COMMERZBANK latest news: $419 million in profit.
http://dealbook.nytimes.com/2012/02/23/c...h-quarter/

One has to look at the fundamentals and factor in how they will react or reacting to the greece situation. That will be complicated job especially, when dealing with a multinational/international exposure bank.

technicals: It looks bullish. i have attached charts below with annotations:

LAtest news on credit agricole
http://www.marketwatch.com/story/credit-...=bigcharts

Like i said, i am not into any bank...including goldman sachs. This toxic derivative shit makes me allergic to all of them.

I think ACA is bearish to neutral. That is, if you look on the 3 year chart you will notice a consolidation between the levels of 4 and 6. I expect resistance at 6. Basically, it looks like the stocks is moving back and forth between those two price points: direction neutral.

Now, if you go to the YTD chart...you can see the double top formation + the trendline break to the downside...this technically indicates a bearish condition.

Many thanks Entropy!

Quote: (02-23-2012 03:55 AM)julio26 Wrote:  

Many thanks Entropy!

No problem, boss. You can see the early formation of head-and-shoulder on the ACA too.... for the commerzbank...i will prefer that it breaks 3 before initiating long entry.

This is in response to multiple PMs i have received with regards to forex trading. I think i should just post this here and reference it rather than writing/answering each person individually. (special thanks to Blanco for permission)

____________

ON TRADING: no pain, no gain.

Yes, it is nearly impossible to win. Penny stocks are easy in comparison; and penny stocks trading is quite challenging. It was the first thing i mastered successfully. Non OTC stocks is easier in comparison. It is honestly one of the most challenging endeavour i ever set my sights on.

Before you do anything...go to babypips website and read it from top to bottom. Achieving good results in forex is going to take a couple of years. There are no shortcut to hardwork. It took me 2 years of intense study to master stocks and 1 year to master forex(and i did not have a mentor, i sorted out the crap from the wheat all by myself). My cumulative trading experience shorten the time frame to 1 year. (people might tell you that it is easy, it isnt. It is simple and yet difficult.) No pain, no gain. Forget signal services. Learn this stuff on your own. Start at babypips and read/digest everything thoroughly.

I said that it is NEARLY impossible to win. That is the blunt truth. I wont sit down here and bullshit you trying to get you all very excited about forex. That will be bullshit. The failure rate is above 98%. You are reading that correctly,....+98% failure rate. Of course, there is going to be people like me that will belong to that group of 1% to 2% that will win consistently. We paid our dues. You will have a better chance of getting into medical school and become a full-fledge neurosurgeon doctor after internship and residency than of making it in forex trading. Will a successful neurosurgeon tell you that it is easy to become one? Of course not. Then i cannot be expected to tell you that becoming a successful forex trader is easy. I will give you hard charging ugly truth. Then, if after that, you want to go ahead, that is fine.

You need the right mental attitude...a tough mental attitude....but...that is not even enough...hardwork. Insanely hard, very hardwork. Bloody hardwork. And smarts. Even with all that, it is still going to be a long hard road filled with setbacks and painful obstacles.

I am just been honest. It has been a challenging evolution for me. Honestly, I have no idea why i never gave up. Most people do. Perhaps, there is just something in me that just want to win badly enough. That just wont quit, deep down.

People talked about discouraging themes...yes, they are there for a reason! THIS IS NOT GOING TO BE EASY.

It is going to be tougher than you imagine. It is for everybody. I remember when i first got started in forex trading...in stocks trading for that matter...i completely disregard the negative attitude and think "i am different", i am a winner. i usually excel at things i put my mind to...sports, academics, etc. name it. I was honours and assistance captain of football(soccer team), represented in sprint and hurdles, etcetera..... How hard can this be?

I was in for a surprise.

In the very end of it all, i came out consistently profitable...BUT...I learn humility and pain and long hours....it was tougher than i imagined. This experience is true for everybody. Ask any successful trader. ANY. If they say otherwise, they dont know what the heck they are doing. Read the market wizards(3 set of books) by jack schwager. All of them rose, fell, rise, fall, and summonted multiple obstacles to become multimillionaires/billionaires. Their stories were inspirational and yet discouraging sober.

There are millions of people doing this. smart people. hardworking people. dedicated people. mentally tough and intellectually sharp people. And yet, over 98% fail. What makes you think you are any different? any special?

It is 1 or zero. there is no "almost there" or "almost got it" in trading. You are either right or wrong...and you pay the price with a diminishing account size and psychological pain. It is a zero-sum game.

ARE you sure you want to do this? Are you sure you have what it takes? Otherwise, find other mode of generating income.

I leave you with this video(it is about sport...but...they could well be talking about FOREX TRADING...or any trading for that matter)






IF you are truly fucking serious about this and not messing around...i will do my best to assist....after you've read and digest babypips...we will take it from there. I truly wish you the best of luck.
.

my trading station. I am prepared for anything!



Now, you see why i tends to bag those pips!

Quote: (02-15-2012 10:35 AM)Entropy Wrote:  

Quote: (02-15-2012 09:43 AM)choichoi Wrote:  

thanks for starting this thread. i just started taking a course through MTI in December. About a month later I did a demo trade with the GBP/USD and got 32 pips my first try. Beginner's luck. i'm gonna keep at it though because I can't keep punching the damn clock anymore. I'm 25 and wasting the best years of my life working in bullshit jobs.

Nicely done, choichoi. More like it. Feel free to discuss your trading methodology...i think i can make out some FIB levels(retracement and extensions) on your chart...some MEASURED MOVE analysis too...inverted hammer/shooting star candle analysis....some trendlines....some 1,2,3 or M-top formations...something that looks like gartley or bearish butterfly formations...at the end of the day, whatever works is my motto.

Never heard of MTI before...but if it works for you, rock on.

Working bullshit job is not the way to go. Fuck my science job too. It can take it in the hind. That is the reason why i have been grinding at this trading like crazy...slowly and steadily heading towards my goal.

Best of luck to you, nice to have you here.

Will do and thanks. I'm doing some lessons on trend lines right now so I now see I did my lines incorrectly but that's the great part about learning. Feel free to make any add-ons to it. And here's a link to MTI

Quote: (02-06-2012 02:55 PM)Entropy Wrote:  

Excerpt from trading journal:razorjack

I'm sure everybody on this forum knows who George Soros is, but does anybody really understand how he trades?

Quite a fascinating individual. I'm currently reading "The Alchemy of Finance". His theory of reflexivity, I believe, goes beyond the markets - How do our expectations of outcomes in our lives actually affect those outcomes?

Quote: (02-01-2012 11:58 AM)Entropy Wrote:  

My goal here is to start discussion about trading the forex market. Through the use of both fundamentals and technical analysis. From the fundamental point of view, emphasis is on: risk on/risk off; global currency flows, bond rates and their reaction to various central banks decision(especially, european/usa monetary policies); carry trades equilibrium, commodities appreciation and depreciation(especially gold and oil) with regards to currency correlations(e.g usd/cad, aud/usd); fundamental reports(gdp, inflation numbers, quantitative easing policies, pmi numbers, current account balanceetc) and market reaction as indicators. Of course, observing how various stock market indices, such as the DAX, FTSE, CAC, S&P handles market info. All this to ascertain the major direction of each nations currency with respect to the others. I am sure i am missing a couple of things.

From the technical point of view. My main focus is the use of S/R levels and trendlines. Confluence trading using s/r levels and trendlines intersection to determine trades. With an eye towards the fundamental and technical structure of higher time frames(monthly, weekly, daily) to guide the direction of the trend. Some of the things that i have noticed about trading S/R and TL confluence on larger time frame is that, whenever or where ever they occur, they hardly occur in isolation. They also tends to be part of another pattern, i.e., the TL could be part of a pennant formation or a channel or a head and shoulder or a double top/bottom, ascending/descending triangle, or flag formation, or Gartley formation, etc.

For the S/R Levels or demand and supply zones, it is not uncommon for some of them to concide with flat top/bottom triangles or rectangle formations. All these different formations probably serves to bring in other players looking at different things to put their money at that spot of confluence.

Also, it is not at all unusual to see FIB levels zones of 38 or 50 or 61 in close proximity to the confluence spot. Which probably brings in the fib players.

Since focus is on H4 and above, most likely the confluence spot will fall very close to a round number psychological area, which has its attraction for some people.

Even candlesticks comes into play here, because when you zoom into candlesticks, there are times when a candlestick is just a classic chart pattern when viewed from a lower time frame. Try this, go to monthly time frame and choose any random candlestick. Mark its boundaries. Then go to lower and lower time frame to view those boundaries. I can almost guarantee it, that the weekly candlestick will morph into one of many classic chart patterns within those boundaries when viewed from lower time frames. In essence, the candlestick trader could be trading S/R and TL confluence while trading his candlesticks.

Basically, what i am saying is that the reason why S/R and TL confluence on higher time frames shows such remarkable success rate could be because of the converging different styles of traders focusing on the confluence spot for whatever personal reasons.

Maybe this is why confluence on higher time frames(where it gets more noticed by different traders with different style)works so well. Due to many different style of traders putting their money down around that spot for whatever different reasons.

Bottomline here is this: the way i see it is that i dont even need to see all these other patterns, when all i need is a confluence of S/R and T/L. That is it. That take care of everything. Which goes to a hypothesis: most technical chart patterns and candlesticks are simply S/R and TL, or (S/R or TL) when you really think about it.

HOW DO I MAKE THE MOST OF THIS?

In trading, it is my core belief that we have to balance win ratio with return on risk. The higher the win ratio, the lesser the return on risk; and vice versa.

A trading system that combine win/loss of roughly 60% along with a regular 8R to 20R(r:r of 1:8 or 1:20) are very rare, if they even exist at all. That is my little observation about trading.

AXIOM: Any system with a high R/R ratio must use a higher time frame for setups and lower time frames for entry. The greater the differential, the better.

Now, how does one take care of the poor win:loss ratio that plagues such a system.

There are other solutions, of course. But the one that has worked for me is to combine/hybridized a scalping system on a lower time with a trend trading system of higher time frame. That is, enter at the entry point of the scalp(1mins to 15mins), but use the PT of the trending trading system(H4 to weekly). If the scalping system has a respectable win/loss of say, 60% and above; and the trend trading system has a respectable win/loss of say 60% and above. We are in business. Of course, there is going to be a sizable dose of breakevens, this is the nature of the beast. It is essentially a trading system within a trading system. A hybrid. This is optimal for high risk/reward, of say, 8R or 20R with a win rate of 60%. It is risking around 4pips to 15 pips to make 100pips to 243 pips or higher.

Trend trading breakouts for my higher time frame strategy has this structure: higher highs/lows or lower lows/highs. (i cant really post image links until i have 10 posts - roosh rules)

The higher time frame methodologies are: swinging/wave movements and polygonal breakouts on the daily frame using lower 1/8th or 1/4th b-p-c.(BREAKOUT - PULLBACK - CONTINUATION). I am sure there are others, but these are the ones that i personally know to result in 60% win rate or higher.

For the scalping method: One trading method that i found to have at least 60% success rate at 1min to 15mins time frame are ascending or descending triangle breakout, that ran, pullback, and then continue in the direction of the breakout. With entrance at the reversal candle at the bottom of the pullback.
From my own personal study, i notice this method works in all time frames. Lets called this by acronym: TBPC

(would love to post image links...but...i cant until i have 10 posts -- roosh rules)

As such, the combination of the two:using the higher time frame trend trading to set the PT and the lower time frame TBPC to set the entry yields a high win:loss with a 10 to 20 r:r.

This is the framework. There is nothing groundbreaking here. It is simply a combination of two elegantly simple techniques. I will start posting live setups

IN A NUTSHELL:

All these systems are simply little variations of the same thing.

(1)find a robust, simple system on a higher time frame with a good win/loss of 60% or higher; with a 1:1 to 1:3 r/r

(2) find a simple, robust system on a LOWER TIME FRAME with a good win/loss and a decent r/r of say 1:1 to 1:3.

(3) merge the two together. Use as your entry the lower time frame methodology, while using the TP of the higher time frame for exit. Sometimes, it is the same system from a 4hr or daily time frame that is now replicated on a 5mins or 1mins time frame, inside itself. This is how i know to get a decent win/loss ratio with a respectable R/R of say, 1: 8 to 1:20(especially, if the setup is weekly or monthly, and the entry is 1 or 5mins.). Of course, breakevens increases. and win/loss drops due to the noise of 1mins...that is why i look far away from red-labeled news.

(4)Use purely price action. Trade with the trend. Avoid red-labeled news.


THIS IS THE CORE OF MY FOREX TRADING PRINCIPLES. I will start posting chart setups as soon as possible.

I graduated summa cum laude with an economics degree from a top US business school, and I’ve worked in investment banking for 8 months, and this post basically sounds like a foreign language to me, haha.

Props for mastering this challenging topic

Quote: (02-25-2012 11:41 AM)nmmoooreland20 Wrote:  

Quote: (02-01-2012 11:58 AM)Entropy Wrote:  

My goal here is to start discussion about trading the forex market. Through the use of both fundamentals and technical analysis. .......THIS IS THE CORE OF MY FOREX TRADING PRINCIPLES. I will start posting chart setups as soon as possible.

I graduated summa cum laude with an economics degree from a top US business school, and I’ve worked in investment banking for 8 months, and this post basically sounds like a foreign language to me, haha.

Props for mastering this challenging topic

Thank you sir.

Check out zeeman's new thread: http://www.rooshvforum.network/thread-10798-...#pid167217 .

Feel free to add and contribute. It is for all our benefits.

Quote: (02-24-2012 03:01 PM)choichoi Wrote:  

Quote: (02-06-2012 02:55 PM)Entropy Wrote:  

Excerpt from trading journal:razorjack
I'm sure everybody on this forum knows who George Soros is, but does anybody really understand how he trades?

Quite a fascinating individual. I'm currently reading "The Alchemy of Finance". His theory of reflexivity, I believe, goes beyond the markets - How do our expectations of outcomes in our lives actually affect those outcomes?

REFLEXIVITY...I wrote a little about it...at least, how i use it to trade discrepancies between fundamental analysis and price action on penny stocks here(excerpts below )

REFLEXIVITY as it applies to penny stocks trading.(in my opinion)

The core principle here is to look for a situation where the fundamentals and the perception(i.e price action) are totally, incredibly out of phase. Then to take advantage of that gross misalignment.

This gross misalignment is most apparent in penny stocks: Fundamentals are total garbage but price of the stock are flying through the roof. This was the place where i first cut my teeth.

I used it with penny stocks back in the day...when i was starting out....until i made enough money that i could not accommodate myself with pennies due to liquidity issues(they are thinly traded)...and market crash...at first, i compensated for this liquidity problem with the help of a market tactic called: tape reading....but, that soon reached its limits too.....remember those were the days when we had penny stocks that rose 1,000% in one day...yes, you are reading that correctly:1,000% gain. Some stocks, especially, green technology stocks during 2006 can move 1,000% between opening bell and closing bell. On multi-weekly basis, other types of stocks can post 13,000% gain in a few weeks is not uncommon...stocks like FHAL, ENAB, MMTIF, GETG, NCEN, HEPI, ZAAP, GEECF, BWMS, NXCO, SMTA.....some of these stocks ranges from $0.001 to $5 in pps. Most are probably delisted by now because they are garbage. Stocks gain of 100% per day were daily occurrences. Even now we still have some of these +100% gainers in one day. Check it out the list from last friday. Look at %Chg on the right. They are updated daily. These stocks were rife with fake reverse mergers, fake earnings...fake business deals with non-entities...nonsensical stock splits....all sorts of garbage shell stocks...phony PIPES...shortsqueezes(real or imagined)....etc....Those were the days when i used to troll IHUB watching the irrational exuberance and then making money from the bloodletting...it was quite ugly actually:You get to meet shady characters that pump and dump like "shakerzz aka King of Pennies" and BB and MOMO.

The boss of them all: STOCKSTER.. See the SEC charges against him.

I studied these scam artists bullshit like crazy and then reverse engineer the fucker out of it.

Here is a primer on how i used to trade those penny stocks for serious gains:

ENTRY PARAMETERS:

1. Go for stocks that have ran up from breakout point(from a consolidation) by at least 80% gain or more; preferably at 52 weeks high; that is now collapsing on +$100,000 worth of volume.(you will need to multiply the pps with the trading volume to get this.). The breakout must be from a consolidation that have congealed for 6 months no less. (reasoning behind this: I noticed that those scammers tends to pump of stocks with solid consolidation base of a few months...i also noticed that when price return to those consolidation bases...the scammers will generally start another run..that is why i placed my buy entry 3% above those levels.)

2. Initiate buy entry at 3% off the breakout point.(this is the point where the euphoria began in the 1st place)

3.Stock pps should be $0.1 or above(i used to go for as low as $0.0001...experience taught me otherwise).

4. Avoid stocks that fell on PR(negative or positive) news by at least 2 days margin. This is the world of penny stocks...positive news is bullshit...negative news is also bullshit.(reasoning behind this: i used to try and use positive news to trade them...i realize through a lot of followup exercises, that they are MOSTLY lies. Even some negative news are released just to artificially depress the pps of the stock for the players to buy back at discount before the CEO release a bullish news to squeeze shorts.)

5. Establish 1st and 2nd resistance levels; establish 1st and 2nd support levels. Look for pivot points 1st and 2nd levels...see if it snuggles nicely to S/R levels.( reasoning behind this: i noticed that pps will create these levels from churning: large volume trades with lots of PR news with little price movement. Which means: smart money players are selling to fools or bulls and bears are battling it out. i take note of these levels to watch if history repeat itself.)

INTRA-TRADE MANAGEMENT:

6. Use the 10, 40, 50 SMAs. I tried all the smas and indicators...every fucking last one of them with penny stocks...i realize for fast in and out...the SMAs 10. 40. 50 works best.. (reasoning behind this: the SMAs are simply averages...like velocity or stochastic averages...it is a probabilisitic distribution of price behaviour...pennies operate on a much smaller timeframes than regular stocks...that is why 10 days or 40 days or 50 days smoothed averages are more applicable..something that have less relevance with bigger stocks(50, 100, 200)

7. Zones that are are free of these 3 SMAs are runners zone. When these SMAs are clusters around resistance points they are almost unstoppable. (the reasoning behind this should be self-evident: we have mean zones of probabilistic distribution coupled with areas where smart players like to dump their cargoes...what do you think will most likely happen at such a point?)

EXIT PARAMETERS:

8. If your pps closes below these SMAs get out before market closes. If your entry point rests on these SMAs....you have a winner. (again, the reasoning behind this should be self-evident)

9. Use those three SMAs and/or 2nd resistance zone and/or 2nd day close in the red to determine exit. 10sma is the deadliest.(again, the reasoning here is self-evident)

10. Profit potential: From as little as 30% gain to as high as a 400% gain. I dont push my luck by aiming for 1,000% gain...i just want to take the middle. Penny stocks move soo fast up and down, you wont believe. Period of trade length: 5mins to a week. By fastest gain was a 50% return within 4mins. You should at least have +30% gain by at the latest, day 2 of trade.

(** as you can see, the basis here is that the fundamentals of penny stocks is a lie. which is true. everything about it is a lie. which is also true. I DONT CARE HOW GOOD AND BELIEVABLE IT IS. I have seen enough bloodletting to know otherwise. I look for a stock with a clear case of pumping bullshit and observe patiently the pattern exhibited by the scam artists...wait for it to start repeating itself because scammers are like that...that is when i then get in and out like an expert tightrope walker. In a nutshell: All i am doing here is exploiting behavioural psychology to profit. This wont work very well if the fundamentals are good.**. It is imperative that the fundamentals and price action DIVERGE considerably. hence the use of penny stocks.**)

Now, if anybody has something like that for options, bonds, futures that is actionable...that is different but similar in psychology, i am all ears. I found it hard to transplant into regular stocks or other financial instruments....do i use the VIX, Put/call ratio, COT index, % of institutional investment, % of shorts in determining sentiments? If so, what degree is good enough?

My two cents.

Entropy what are your feelings on the Bloomberg terminal? Do you think it would benefit you enough to compensate for the price if you purchased one?

just a little update on eur/cad and eur/gbp.

eur/cad up by 400pips in the positive. eur/gbp up by +200 pips.

of course, i am not trading till march...but...just think i should take a peak and say hello.

Quote: (02-26-2012 07:22 PM)rozayINTL Wrote:  

Entropy what are your feelings on the Bloomberg terminal? Do you think it would benefit you enough to compensate for the price if you purchased one?

Depends on your trading style...if you really need your news fast and it is critical to your trading decision...yes, i will suggest you get bloomberg terminal. I personally dont need my news that fast.

anyways, although not trading till march...already made 50% for february.....i feel the urge to provide the eye candy of the trading week:




and of course:

I fucked up and bought the TVIX in December. Down about 50% on it. I bought it in July also and made over 100% on it so not to bummed about it.

I hope the markets get shaky again soon.

Good thing I hedged with NOR and WFC but only covered half my losses.

Quote: (02-27-2012 07:59 AM)Sly Wrote:  

I fucked up and bought the TVIX in December. Down about 50% on it. I bought it in July also and made over 100% on it so not to bummed about it.

I hope the markets get shaky again soon.

Good thing I hedged with NOR and WFC but only covered half my losses.

First off, let me just say congratulations on your earnings. Always good to bag them. In addition, i did a check, NOR and WFC both went up today.

Now, if i may say so, i don't seem to understand your hedging strategy.

The way i understand hedging is that you find correlated financial instruments and you take opposite trading decision in them to balance out any adverse portfolio risk.

There are hundreds of way to do this, but let me give three or so examples:

Let us assume that you think that AMZN is a solid company with a kick arse business model and that her counterpact, NFLX, is a stupid company with a dumb business model. They are both in the online retail space. So, you go LONG shares of AMZN worth say $50k, then you turn around and go SHORT shares of NFLX worth say $50k.

two scenarios: You make money in both of them (2)You make money in one and lose money in the other, thereby neutralizing each other. option #3 where you lose money in both is rare unless you havent done your homework.

Example #2: You like AAPL...so you went LONG shares of AAPL and as insurance against unforeseen events, you use PUT options to hedge against potential downside.

Example #3. You are an American Midwestern farmer of Hogs or Cattle. You do not know if the drought in Ukraine or mad cow disease in Britain will affects your profit potential this year...since you are a farmer that implicitly means you are already LONG these farm animals. So, as a hedge against price fluctuatons against you, you sell commodity futures at the CBOT in hogs or cattle as a hedge against adverse drop in price of cattle.

Example #4. You are an international conglomerate....massive currency devaluation of the euro against the USD is going to squeeze the crap of your profit margin....So, you went short the EUR at the currency futures or spot forex or PUT option to hedge against EUR devaluation deleterious effects on your profit margin.

Example #5. You are an airline company...the rising price of jetfuel due to terrorism and global instability is killing you. So, you bought CALL options on kerosene futures to hedge against the rising cost of oil on your bottomline....the profit you make going long upsets the rising cost of jetfuel for your company helping to make your flights cheaper and beat the competition.


There are many other examples, of course. Multiple ways to slice and dice. It is just that i fail to see the connection between using wells fargo bank(WFC) and aluminium(NOR) to hegde volatility index(TVIX) of the market. I will appreciate your education in such matters. I always like to learn new things.

THE NEWS:

http://finance.yahoo.com/news/stock-futu...28008.html


Dow, S&P hit milestones on confidence, lower oil

By Caroline Valetkevitch

NEW YORK (Reuters) - The Dow closed above 13,000 for the first time since May 2008 on Tuesday and the S&P 500 also hit a milestone, as buoyant U.S. consumer confidence data and a sharp drop in oil prices nudged the nearly five-month rally forward.

The S&P 500 closed above 1,370, its May 2011 intraday high, a move that could invite momentum buying as money managers chase performance, though low volumes lately have raised concerns about the rally's longevity.

"I don't see anything technically favoring a downturn right now," said Chris Burba, short-term market technician at Standard & Poor's in New York.

"No doubt (the market) has been overbought since the beginning of February, but in a powerful uptrend, price will continue higher for some time amid overbought conditions."

Technology shares ranked among the best performers, and the Nasdaq was trading at its highest since 2000. Micron Technology Inc (NSQ:MU) shot up 3.7 percent to $8.88 after Intel Corp said it will sell its stake in two wafer factories to Micron and buy chips from the company.

Intel advanced 1.3 percent to $27.24. The PHLX semiconductor index <.SOX> rose 1.6 percent.

The Dow Jones industrial average (DJIJI) gained 23.61 points, or 0.18 percent, to close at 13,005.12. The Standard & Poor's 500 Index (MXP:SPX) rose 4.59 points, or 0.34 percent, to end at 1,372.18. The Nasdaq Composite Index <.IXIC> climbed 20.60 points, or 0.69 percent, to finish at 2,986.76.

The S&P 500 is up about 9 percent since the start of the year, largely because of data showing stronger momentum in the economy and signs of progress in managing the euro zone's debt crisis, including a debt deal for Greece.

Low volumes overshadowed the gains, however. With just one trading day left in February, daily volume on the New York Stock Exchange, NYSE Amex and Nasdaq has averaged 6.89 billion shares. In February 2011, the daily average volume was 7.81 billion.

Tuesday's volume was about 6.4 billion shares on the NYSE, NYSE Amex and Nasdaq.

Consumer confidence in the world's largest economy jumped to a one-year high in February, according to a report from The Conference Board, a private business research group. This indicator is noted because consumer spending accounts for more than two-thirds of U.S. economic activity.

The drop in oil prices from recent highs also relieved worries about the outlook for consumer spending. Brent crude oil futures fell more than $2 to settle at $121.55 a barrel.

Some of the economic optimism was tempered by a government report showing orders for U.S. durable goods in January had the biggest fall in three years. Durable goods, which are generally meant to last three years or longer, range from big-ticket items like aircraft down to consumer goods like refrigerators and even toasters.

Retailers got a lift from the earnings of Office Depot Inc (NYS:ODP), which surged 18.9 percent to $3.59, and AutoZone Inc (NYS:AZO), which rose 2.9 percent to $376.41.

Fourth-quarter earnings have been less impressive than in recent quarters, however, with 63 percent of companies beating analysts' expectations, below the average 70 percent beat rate in the last four quarters. Results are in so far for 472 of the S&P 500 components.

Advancing stocks outpaced decliners on the NYSE by about 15 to 14, while on the Nasdaq, decliners beat advancers by about 13 to 12.

Primer on the Euro Breakup

Scroll down....it is a 53 pages article: http://blog.variantperception.com/2012/0...o-breakup/

Quote: (02-27-2012 06:24 PM)Entropy Wrote:  

Quote: (02-27-2012 07:59 AM)Sly Wrote:  

I fucked up and bought the TVIX in December. Down about 50% on it. I bought it in July also and made over 100% on it so not to bummed about it.

I hope the markets get shaky again soon.

Good thing I hedged with NOR and WFC but only covered half my losses.

First off, let me just say congratulations on your earnings. Always good to bag them. In addition, i did a check, NOR and WFC both went up today.

Now, if i may say so, i don't seem to understand your hedging strategy.

The way i understand hedging is that you find correlated financial instruments and you take opposite trading decision in them to balance out any adverse portfolio risk.

There are hundreds of way to do this, but let me give three or so examples:

Let us assume that you think that AMZN is a solid company with a kick arse business model and that her counterpact, NFLX, is a stupid company with a dumb business model. They are both in the online retail space. So, you go LONG shares of AMZN worth say $50k, then you turn around and go SHORT shares of NFLX worth say $50k.

two scenarios: You make money in both of them (2)You make money in one and lose money in the other, thereby neutralizing each other. option #3 where you lose money in both is rare unless you havent done your homework.

Example #2: You like AAPL...so you went LONG shares of AAPL and as insurance against unforeseen events, you use PUT options to hedge against potential downside.

Example #3. You are an American Midwestern farmer of Hogs or Cattle. You do not know if the drought in Ukraine or mad cow disease in Britain will affects your profit potential this year...since you are a farmer that implicitly means you are already LONG these farm animals. So, as a hedge against price fluctuatons against you, you sell commodity futures at the CBOT in hogs or cattle as a hedge against adverse drop in price of cattle.

Example #4. You are an international conglomerate....massive currency devaluation of the euro against the USD is going to squeeze the crap of your profit margin....So, you went short the EUR at the currency futures or spot forex or PUT option to hedge against EUR devaluation deleterious effects on your profit margin.

Example #5. You are an airline company...the rising price of jetfuel due to terrorism and global instability is killing you. So, you bought CALL options on kerosene futures to hedge against the rising cost of oil on your bottomline....the profit you make going long upsets the rising cost of jetfuel for your company helping to make your flights cheaper and beat the competition.


There are many other examples, of course. Multiple ways to slice and dice. It is just that i fail to see the connection between using wells fargo bank(WFC) and aluminium(NOR) to hegde volatility index(TVIX) of the market. I will appreciate your education in such matters. I always like to learn new things.

Entropy,

I guess I would say my way of looking at hedging is not textbook.

When I think hedging, I think of protecting my investments.

I was an extremely active trader April 2011 - December 2011. I was up everyday at 6:30 in the morning trying to find trends. Made good money at 22% return with a $15K portfolio. It's now worth over $18K

Anyways in December, when markets were still extremely shaky and noone knew if the gains would hold, I decide to go long (Long for me is more then one month without touching it) on WFC and NOR.

I got WFC at a little under $26 & NOR at $8. and put $2K into each equity.

Due to the market volatility, I wasn't sure which way markets would move.

I stopped looking at the markets the first week of December because I started traveling.

So in case shit went south, I decided to put another $2K in the TVIX.

I got in around $35.

The way I looked at it, if the market collapsed, my TVIX would jump up to around $60 and WFC and NOR would dip down to around there 52 week lows.

Well, finally the market calmed down and I wish i would have not gone with my hedging strategy.

Definitely not your traditional way of hedging, but I am not traditional when it comes to most things in life. i listen to my gut and that is what my gut wass telling me to do..

You seem like you know your stuff Ent..
Would you consider that a hedge? or what should my investment strategy be called?

edit

Quote: (02-24-2012 02:40 AM)Entropy Wrote:  

my trading station. I am prepared for anything!



Now, you see why i tends to bag those pips!

I get what you are doing. You decide to be long two stocks because you like them for whatever reasons...but because the market can be nasty due to insane volatility of global macroeconomics. You decide to limit any adverse movement against you by going long the vix...so, if shit happens to dampen your profit in Nor and wfc, you will make profit from vix to offset those two loss.

Yeah, i can see how that works.

I can see the reasoning behind that....

However, after you've bought the TVIX....the volatility went down causing a loss in the TVIX but a gain in NOR and WFC.

HMMMMM.......

If i may offer my humble opinion on such matter, of course, hindsight is always 20/20, i will suggest intermarket analysis. The volatility was high in the fall(helping the tvix longs) because of the pain the EURO was in...
Deals were being made and cancelled and getting re-scheduled and getting canceled and made and.....dancing around like a headless chicken...IRAN nuclear talk was also in high fever.....
you can see the drop in the EUR during that time too...as money shifted from risk on to risk off mode...that is, money started flowing into the USA to avoid exposure to euro shite. . You see in this EUR/USD chart the decline in the eur starting in october.


This also concides with the climax of the TVIX in october.



I dumped my short EUR during DEC actually...DEc 14 TO BE EXACT.....




Are we going to have another volatility like this? maybe as march 23rd d -day for greece approaches and if things look dicey, who knows?

It makes sense when playing volatility to watch out for macro events that may affect the financial markets....without them...the tvix will just calm down.

Just to re-iterate, i like the reasoning: take a position, and then use volatility index to hedge against it. The problem?

(a) it requires solid knowledge of intermarket analysis
(b)Accurately gauging volatility of the whole market.
©familiarity with risk on/risk off and global money flow patterns.
(d)good historical context.

In that way, you can decide just how bad things will get and use that to sensibly determine how much money you will commit to exploit the mess.

Another thing is that, if you can find some EUROPEAN volatility index of some sort, that might have been a better play than US volatility index. Take a look at the EUO...that is the etf for ultra short euro...

(just look at the performance from (sept to january of this year)


Anyways, i am not that terribly familiar with etfs that much....but these are my two cents.

Quote: (03-01-2012 03:30 AM)Sly Wrote:  

Entropy,

I guess I would say my way of looking at hedging is not textbook.

When I think hedging, I think of protecting my investments.

I was an extremely active trader April 2011 - December 2011. I was up everyday at 6:30 in the morning trying to find trends. Made good money at 22% return with a $15K portfolio. It's now worth over $18K

Anyways in December, when markets were still extremely shaky and noone knew if the gains would hold, I decide to go long (Long for me is more then one month without touching it) on WFC and NOR.

I got WFC at a little under $26 & NOR at $8. and put $2K into each equity.

Due to the market volatility, I wasn't sure which way markets would move.

I stopped looking at the markets the first week of December because I started traveling.

So in case shit went south, I decided to put another $2K in the TVIX.

I got in around $35.

The way I looked at it, if the market collapsed, my TVIX would jump up to around $60 and WFC and NOR would dip down to around there 52 week lows.

Well, finally the market calmed down and I wish i would have not gone with my hedging strategy.

Definitely not your traditional way of hedging, but I am not traditional when it comes to most things in life. i listen to my gut and that is what my gut wass telling me to do..

You seem like you know your stuff Ent..
Would you consider that a hedge? or what should my investment strategy be called?

Quote: (03-01-2012 12:55 PM)NuMbEr7 Wrote:  

Yo Entropy,
Where did you learn about trading? Any books, courses etc that you can recommend?
We have a 'fake' JSE that is going to run here and its for school kids and university-goers so it's good practice for the real thing...

Which one are you interested in?

stocks? bonds? forex? options? futures?

that will help in regards to your question.

Entropy,

What chart software do use use for your screen shots? Metatrader 4?

I am currently using OANDA for my demo account, however if you take a look at the attached photo, the dormant action on the weekends is also displayed. This will affect the drawing/slopes of my trend lines will it not? If this will throw off any trend line analysis I am doing I need to find a solution.

I am currently using a Mac, so my charting software options are limited in comparison to the PC.