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USDCAD H1 - Stress-Free Clear Charts.Stress-Free Clear Charts. (Required 10 years in R&D.) In this layout, we see these indicators: (From top to bottom of the screen) -Angle: Shows the Angle of the Trend. -Bear&Bull Powers: Displays who are in Power, the Bulls or the Bears. -Strength: Shows the Strength of the Trend. -Template: Always clearly shows the direction and precisely where to open and close (where to flip position). We open at the beginning of the Trend and stay in all the way till the end, stress-free. Turns perfectly. -Performance: We see where to enter and close, the pullbacks and the performance. -Odds: Shows the Odds everywhere. -Probability: Shows the Probability all the way. -Compare Forex: We see the performance of each currency of the Pair on chart. Each line is one currency. USD in Red. CAD in White. When the USD is above the CAD, the USDCAD pair goes up. And vice versa, when the USD is below the CAD, the USDCAD pair goes down. The background color displays the intensity of the trend.

Alpha Ai Reversal: A High-Performance Strategy with 412% Returns Key Highlights: NASDAQ:NDAQ Net Profit: A solid $82,516.99 USD profit , reflecting a gain of 412.58%. This showcases the strategy's ability to multiply capital impressively over time. Total Closed Trades: 157 trades have been completed, indicating a good amount of market engagement, providing ample data to gauge the strategy's reliability. Percent Profitable: A high success rate, with 79.62% of trades closing in profit . This means nearly 8 out of 10 trades are winners, a confidence booster for any trader! Profit Factor: A profit factor of 3.296 indicates that for every dollar lost, the strategy earned over three dollars. This is a strong indicator of risk/reward management. Max Drawdown: The maximum observed drawdown was $13,564.86 USD, or 50.61%. While this is on the higher side, suggesting periods of significant losses, the overall profitability more than compensates for this. Average Trade: The average trade brought in $525.59 USD, representing a 1.14% gain per trade. This consistent performance adds up over time, as seen in the cumulative profits. Average Number of Bars in Trades: Each trade lasted an average of 17 bars. Given the 8-hour timeframe, this means trades were typically held for about 5-6 days, balancing between quick profits and sustained positions. The strategy seems well-calibrated for traders looking for high probability setups with significant profit potential. The strong profit factor and percentage profitability are particularly appealing, suggesting a strategy that can consistently outperform the market, even if the drawdowns require a strong stomach. For those willing to ride out the occasional rough patch, the Alpha Ai Reversal strategy offers a compelling balance of risk and reward, promising attractive returns in the long haul. This strategy could be a game-changer !

00:33

by Alpha-Capital

How to Build Your Portfolio Like a Professional Institution Investing at the institutional level involves a sophisticated blend of strategies, risk management, and performance measurement to achieve optimal returns. One of the cornerstones of creating an institutional-grade portfolio is the use of optimization methods, with particular focus on ratios such as the Sharpe Ratio, Sortino Ratio, and Omega Ratio. In this guide, we'll delve into what these ratios are, how they differ, and when to use each to construct a robust institutional-grade portfolio. Understanding the Ratios Sharpe Ratio Definition : The Sharpe Ratio, developed by Nobel laureate William F. Sharpe, measures the performance of an investment compared to a risk-free asset, after adjusting for its risk. It is calculated by subtracting the risk-free rate from the return of the portfolio and dividing by the standard deviation of the portfolio's excess returns. Usefulness : This ratio helps investors understand how much excess return they are receiving for the extra volatility that they endure for holding a riskier asset. A higher Sharpe Ratio indicates a more attractive risk-adjusted return. Sortino Ratio Definition : Similar to the Sharpe Ratio, the Sortino Ratio also measures the risk-adjusted return of an investment portfolio. However, it differs by only considering downside volatility (negative returns) rather than the total volatility of returns. Usefulness : This focus on downside risk makes the Sortino Ratio particularly useful for investors who are more concerned about potential losses than the overall volatility. A higher Sortino Ratio indicates that the portfolio is efficiently earning more on its downside risk. Omega Ratio Definition : The Omega Ratio is a more comprehensive measure that divides the returns above a certain threshold (typically the risk-free rate) by the returns below that threshold. It considers all the moments of the distribution of returns, not just the first two moments (mean and variance) like the Sharpe and Sortino ratios. Usefulness : This ratio is especially valuable for portfolios that do not follow a normal distribution of returns, providing a more holistic view of performance across different risk levels. A higher Omega Ratio indicates better performance per unit of risk. How They Differ The primary difference among these ratios lies in how they measure risk and returns: Sharpe Ratio considers the total volatility (standard deviation) of portfolio returns, treating all volatility as equal. Sortino Ratio improves on this by focusing only on downside risk, which is more relevant for investors concerned about losses. Omega Ratio goes further by considering the entire distribution of returns, offering insights into the performance across all levels of risk. Situational Use Sharpe Ratio : Ideal for general comparisons of portfolio performance where the investor is concerned with both upside and downside volatility. It's particularly useful when comparing portfolios or investments with similar risk profiles. This ratio is commonly used by most large financial institutions due to the large sums of money they manage and ensuring portfolio stability is prioritized over larger profits. Sortino Ratio : Best used when the investor's primary concern is with the downside risk rather than total volatility. This ratio is suitable for portfolios where strategies are aimed at minimizing losses rather than capturing every potential upside. This ratio is used by investors who are able to stomach more volatility in their portfolio in return for a higher probability of gains while effectively reducing equity downside. Omega Ratio : Most beneficial for analyzing portfolios with non-normal distributions of returns, such as those including options, leveraged investments, or hedge funds. It provides a nuanced view of performance across different levels of risk, making it suitable for sophisticated investment strategies that aim to manage risk in a more granular manner. Due to the nature of this ratio, only investors who have a larger risk appetite and require aggressive growth should use this ratio as the omega ratio will not necessarily be affected by high portfolio drawdowns as long as the runups are significantly higher. This means a portfolio could experience a 60% drawdown, followed by a 1000% runup, and the Omega Ratio calculation would return a high value as the probability of gains still outweigh the probability of losses. Conclusion Constructing an institutional-grade portfolio requires a nuanced understanding of both the opportunities and risks present in the investment landscape. By leveraging the Sharpe, Sortino, and Omega ratios, investors can better assess the risk-adjusted performance of their portfolios, tailoring their investment strategies to meet specific risk and return objectives. Whether you're managing a conservative fund focused on minimizing losses or a dynamic portfolio seeking to capitalize on market inefficiencies, these ratios provide critical insights that can help optimize your investment approach for superior risk-adjusted returns.

Education

[EDU]Doing this will Massively improve your Trading!Hello fellow traders , my regular and new friends! Welcome and thanks for dropping by my post. DRC stands for Daily Report Card To be all transparent I adopted this from smb capital. Credits and Kudos to them. I used it and did some modifications to suit my purpose. So you can do the same to what I have over here and modify according to your requirements. The purpose of the daily report card is to help you keep track of your whole trading day. If you do have a day job or what not, you can adjust the DRC to be cater for a week or few days. It's up to the individuals. So, this Daily report card of mine basically looks something like this as shown above in the charting space. And let me give some details on each of this sections. Daily Analysis In this section, you should start off with how you have felt in the morning. Do you feel refreshed and pumped up, or grouchy as you have had not enough sleep? Or are you feeling miserable or unhappy over the big lost you had yesterday? You can put it down over here. Then continue on for how you would prepare your trading day by first analysing the market that you are trading on. Goal This will be link with the goals that you have set fore for yourself. Try to put a goal that you wanted to achieve by end of the week, month or quarter. This doesn’t necessarily be the big goal you have. It can be subset of the big goal you have. Some examples can be, to increase my position size from 1% to 2%. Or to be able to hold my trades longer, sticking to pre-defined exit strategies and improving my risk to reward ratio etc. This goals does not necessarily needs to be monetary. Reminders / general truth or principle You can put some reminders and principles for yourself here. You can start off with things like focus on your goals and not the PNL, focus on your trading as required and remove any distractions (e.g. social media). These are just some examples of the many and I will leave that for you to fill them up. What I learned/improved upon today? To this, you can write something that you find interesting or learn about the market. For example, if you are day trading, GBP could have a particular time that you have observed where it reverses it trend. OR it could just be that you come to realize some interesting trading setups using a particular indicator etc. Important trade, if any Over here, you should document down trades you find it important for your to remember or refer back to later on in the week or future. This can be trade that you have did well or a trade that you performed badly. Jot it down so that in the future you can revisit and learn from it again. Change need to be made from today? Here are some things that you felt that you should act on it immediately for example, if you lost yourself and be emotional on losses. Put it over here and evaluate what has happened and act upon it. Or you have entered a trade haphazardly ,in fear of FOMO etc. Overview Just a 1-2 sentence to sum up your day.Nothing in particular but jotting down your thoughts of the day. Finally take a look at the top left hand corner of the table I had for you. There is a X /5 which denotes the score you gave yourself on that day (if you are doing it on a daily basis). Over here, have your own scoring system to give yourself score and hold yourself accountable for it. You can do something like, giving a score of 1 for daily analysis section, 2 for goal and 1 or important trade etc. Just to evaluate how you have done for each of these section is a quick way. It's the year end and if you have yet to evaluate your trading performance and not sure how to go about starting, do check out the link i provided below for the post i have put up recently. Do Like and Boost if you have learnt something and enjoyed the content, thank you! -- Get the right tools and an experienced Guide, you WILL navigate your way out of this "Dangerous Jungle"! -- ********************************************************************* Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. *********************************************************************

Education

by Shadowing_The_Big_Boys

You don't know how to manage your portfolio I had a talk with my mentor earlier today, and we talked about how we each calculate the signal for our allocation towards ETH compared to BTC. It got me thinking that a lot of people actually aren't aware of why they allocate capital to different assets in the same class! Case in an upwards trend When the trend is up and you want to maximize your returns in crypto, with the least amount of risk... What do you do? Well, you know that alts are higher beta (they move more than BTC), but you don't know when BTC will alts... In the case for my conservative portfolio I only hold ETH and BTC, but how do I allocate between them? What I first and foremost do is look at the dominance chart for BTC: Here we see the dominance of BTC going down a lot, this is while the market is up (between 18th of jan 2021 and 19th of may 2021) The TPI informed us about the entire trend for the dominance chart. What you do in this scenario is now determine how much ETH you hold relative to BTC in this period (in your conservative portfolio) Open the ETH/BTC chart (I use binance personally) In this period we see ETH outperforming BTC a lot! When the TPI is bullish for the ETH/BTC pair, it means that ETH is likely to outperform BTC, how did that prediction go? As BTC dominance falls, and we see strength in ETH compared to BTC, we have a higher allocation towards ETH. But Omar, how do I quantize the amount of ETH compared to BTC? No one asked, but I will answer still: The TPI gives values between -1 and 1, I normalize these values between 0-1 for the ETH/BTC pair, where 0 is 0% allocation and 1 is 100% allocation towards ETH: Equation for normalization: minValue = 0 maxValue = 1 (TPI - minValue) / (maxValue - minValue) => (TPI - 0) / (1- 0) Since the TPI had been bearish with a TPI value at -1 for ETH/BTC since the 13th of march, 100% of my conservative portfolio is in BTC! Case in a downwards trend The method is the same, but reversed! When we look to maximize our returns on a short we want to short the asset that is underperforming! ETH was underperforming BTC by a large portion during the LUNA drama: This means most of the conservative portfolio was short ETH, rather than BTC Quite simple, but very effective! In conclusion I want you to ask your self, why am I allocating x% of my capital towards this asset (long or short), and is my allocation optimal? If you can't answer these two questions, then you probably need to look at your system Numbers don't lie, this method works! The TPI is truly the holy grail for a swing trader who wants to use statistics and data to maximize their returns and minimize their risk! Kind regards Omar I've linked an idea below from a dear friend of mine (much bigger than on this platform) who has marked out crutial levels for the altcoin market based on what the FED will do, give it a watch!

Education

Daily trading summary 09.12.22 So today i took 3 trades which were 1 loser and 2 BE (For someone with different broker the trades could been 1 winner, 1 loser and 1BE because 1 of the trades was 0.2 pip away from TP1) and i made total of 3.30% profit. Overall the week was profitble one. See you next week and have a great weekend traders! Pairs traded: FX:GBPUSD and FX:EURUSD

"S**T COIN" INVESTMENTS, WHICH IS BETTER, $SHIB OR $DOGE?💩🚀This chart maps the performance of Shiba Inu vs. Dogecoin. While this type of investing is not very highly recommended at this time, I have created this to show which may be a better performer in the near future, should anyone decided to make such risky investments/trades. IMO this chart shows and imminent break of the current support level, giving $DOGE the upper-hand for a "short" while. Then $SHIB will take over as it begins to overperform against $DOGE. More than likely (IMO) this will be caused by an initial, substantial rise in $DOGE. Then FOMO over those profits gained by investors will cause others to seek similar profits, directing them towards the next "gamble", which will more than likely be $DOGE's "sibling", $SHIB. Because of $SHIB's wider margins, it will then outperform $DOGE in terms of growth. Also, this may be a strong, bullish signal that retail has now fully entered the market and overall crypto prices may begin to recuperate.

by DoozerInvest

Updated

$SHIB or $LUNA? Best gamble trade to be taking today. 🚨⚠️🚀💩A month ago this idea wouldn't have even been a thought in anyone's mind. However the recent super-crash of $LUNA has put it in the same risk-category as any sh** coin. IMO $SHIB will have some opportunities coming for anyone who would like to trade the retail hype. At the same time I personally believe that $LUNA has become somewhat of a "meme-coin" itself at this point, however more like a "meme-stock" with massive pump-potential. (Should things play out in the right way) Because of this, I have charted the performance of $SHIB vs. the performance of $LUNA. It seems that $SHIB will be somewhat battling against $LUNA for the immediate future, but will then be overtaken, with a possible massive rise in performance by $LUNA against $SHIB. This could also turn out to be a nice "double-play", as a trader COULD POSSIBLY use this ratio to make more $SHIB (if $SHIB stays lower while $LUNA rises) then sit in that $SHIB position until a take-profit level is hit by $SHIB. **This is all my own personal opinion, based on chart data. Not Financial Advice**

by DoozerInvest

Updated

Finding your optimal performance 🏃‍♂️Most traders spend a good bit of time looking at charts. Well here is a chart we traders should all take a look at. The chart shown is the Yerkes-Dodson Law. The Yerkes-Dodson law is a proposition that people perform best at intermediate levels of arousal, and that performance is lower at high or low levels of arousal. The theory behind this is visually represented by the graphic in this idea. No arousal levels or a bored/laidback approach to life will mean no stress but no real performance in what you are trying to achieve or do. However when arousal and stress gets too high by pushing to hard, performance starts to decrease. It's about finding the right balance to achieve an optimal performance. A certain level of stress about what you are trying to achieve motivates you to study, learn or train in order to do your best. A sportsperson has to get bumped up before an event as well as train hard, But getting to worked up and training to hard could cause a decrease in performance when it comes to the event. Pushing not hard enough to pass an exam will lead to a fail as you haven't studied or don't care, But also pushing to hard could lead to a fail as you've let stress and anxiety take over forgetting everything you studied. Moderate levels of arousal is best for overall performance. This theory can be applied to your trading. Take a non interested approach or bored approach and you performance in this area will be affected. Less potential profits etc. Get to focused on your trading or trade to hard could lead to poor performance along with a load of stress in your life. You as an individual will have to self reflect and determine where you fit on the curve in the idea graphic. If you fell more success, achievement and happiness can be had, by all means crack on and go for it! However, if you are getting to a point where you feel you might have reached your limit, it could well be time to dial it back a bit. Don’t push to hard for it that you go down the opposite side of the curve. This theory can be applied to every aspect in your life by using it to balance all aspects of your life will also help your trading as well as work, relationships and everything else we all go through day to day. Thanks for taking time to read this. Darren 🙌

Education

by pow_removetheguesswork

$SHIB or $LUNA? Best gamble trade to be taking today. 🚨⚠️🚀💩A month ago this idea wouldn't have even been a thought in anyone's mind. However the recent super-crash of $LUNA has put it in the same risk-category as any sh** coin. IMO $SHIB will have some opportunities coming for anyone who would like to trade the retail hype. At the same time I personally believe that $LUNA has become somewhat of a "meme-coin" itself at this point, however more like a "meme-stock" with massive pump-potential. (Should things play out in the right way) Because of this, I have charted the performance of $SHIB vs. the performance of $LUNA. It seems that $SHIB will be somewhat battling against $LUNA for the immediate future, but will then be overtaken, with a possible massive rise in performance by $LUNA against $SHIB. This could also turn out to be a nice "double-play", as a trader COULD POSSIBLY use this ratio to make more $SHIB (if $SHIB stays lower while $LUNA rises) then sit in that $SHIB position until a take-profit level is hit by $SHIB. **This is all my own personal opinion, based on chart data. Not Financial Advice**

Long

by DoozerInvest

Updated

Bullish sentiment for 2022 on High Performance Blockchain (HPB)High Performance Blockchain (HPB) could finally be in a position to realize the potential that many industry experts predicted for the chain back in 2018. The HPB chain is a layer 1, main-net Ethereum EVM-compatible chain, but it's unique feature is that it combines dedicated, custom-developed blockchain hardware, with the Ethereum Virtual Machine (EVM) software. The custom hardware, known as the " Blockchain Offload Engine " (BOE) accelerator card, is in some ways similar to a computer graphics card, only the BOE card was developed from the ground-up by HPB CEO Xiaoming Wang , to specifically run the HPB blockchain network. It is currently the only blockchain the world to fuse hardware and software in this way. The BOE card is what allows HPB to run at 5000tps (transactions per second) when compared to the Ethereum Network which runs at 15tps. In addition, the associated "Gas" fees with the HPB chain are around $0.0001 per transaction, compared to Ethereum's $50 per transaction at certain times of the year. HPB is faster, cheaper and more eco-friendly than Ethereum, utilizing a Proof of Performance (PoP) consensus mechanism, but the real jewel in the crown is the "Hardware Random Number Generator" , referred to as HRNG. The reason people in the industry are becoming so bullish on HPB right now is because many industry experts predict that " GameFi " will be the next big thing in blockchain. Gaming, with connections to blockchain, is estimated to be worth $55 Billion USD in 2022 according to Crypto.com - One of the elements critical to the success of GameFi, is the ability to harness PROVABLE random numbers , which are used to allow games to be completely non-deterministic and unbiased. Up until now, blockchains have typically used "pseudo" random number generators (PRNG) which are flawed. They used a seed value to generate random numbers, and these random numbers are based on mathematical calculations and algorithms. The issue with this type of mechanism, is that if someone knows what the seed algorithm is, then they can ultimately deduce the "random" number derived from it. Quite simply, users could not trust a platform where the random numbers are not truly random. There is room for misuse with this type of pseudo random number generator, and it is part of the reason why games, casinos and lotteries have struggled to make an impact thus far in the blockchain industry. HPB aims to solve this issue with HRNG which is known as a "True" random number generator (TRNG) as instead of deriving random numbers from a software-calculated seed value, it derives its seed value from the BOE accelerator card hardware. TRNG's can only be certified as provably fair if the seed value comes from naturally-occurring phenomena. High Performance Blockchain use their BOE card to monitor tiny micro-voltage fluctuations (down to 0.0001 volt) on the ever-changing power-draw of the BOE card, and then use an analog-to-digital hardware chip to convert those values into a 256-bit hexadecimal string. This constantly-changing string is then used as the seed value to generate truly provable random numbers. Better still, the random numbers can be generated for free by software developers wishing to develop DApps on the HPB chain. Unlike competitor oracle solutions such as Chainlink (LINK) VRF, which can cost up to 0.2 LINK tokens per random number called (approximately $5 in early 2022), the HPB HRNG supplies the provable random numbers at every 6-second block for free. This could revolutionize the blockchain industry, and DApp developers will be looking to take advantage of HPB random numbers as the GameFi sector matures. In addition, HPB are now making strides to provide the necessary developer tool-sets that DApp developers come to expect, and they are also developing a decentralized Random Load-Balanced (RLB) crypto bridge to connect to other EVM chains including Polygon, Binance Smart chain, Avalanche, Fantom, Tron and others. To put some perspective into upside potential of the HPB project, the current MCAP of High Performance Blockchain is £3 Million USD - It is a layer 1 main-net blockchain and the only chain in the world to fuse hardware (BOE card) with software. This is in comparison to a layer 2 sidechain such as Polygon which cannot generate TRNG random numbers on chain, and has a current MCAP of £11 Billion USD - So in effect, HPB would need to 4000x in value to reach parity with a chain that many blockchain technical experts believe to be an inferior chain to HPB. HPB is also running a hackathon competition on DevPost in May, inviting developers from all around the world to come and try out the chain. The HPB Global Telegram community have never been this bullish.

Long

by crypto-market-analyst

FEW SIMPLE TIPS TO IMPROVE YOUR TRADING PERFORMANCE Today we prepared for you few simple tips that may help you improve your trading performance. Please feel welcome to share your own tips in the comment section. Educate yourself. No trader can become successful without spending plenty of time studying charts, fundamentals and technicals. Nowadays, there are plenty of financial gurus and trading courses which claim to offer knowledge that will transform you into a professional trader in just a short amount of time. Unfortunately, most of these services offer only shallow information that has no use in the real trading world. In our opinion, literature written by renowned traders and economists offer more profound knowledge and usually at better cost. Analyze your trades and strategies. Analyzing your past trades and strategies can help you learn from your mistakes. Additionally, it can help you recognize what you did correctly and what works for you. Do not trade without a proper trading plan. Each trade should have a proper trading plan. This plan should at least consist of entry/exit points and risk/reward evaluation. However, creating different scenarios for each trade can help you navigate the market even better. Evaluate your risk/reward associated with each trade. Each trade has a risk/reward ratio tied to it. Generally, a risk/reward ratio of 1:3 or more is preferable. Do not chase the market when you are not sure where it is headed next. There are times when the market is very volatile and experiences swings from side to side. Often, in such times, a trader may be unable to tell where the market is headed next. On such occasions it is usually better to take a step back and not to trade. This can help avoid loss of capital due to whipsaws. Take a time off after the winning streak. Winning streaks often result in confidence being gained by a trader. However, many traders tend to get overconfident which usually leads to loss of capital that has been amassed through the winning streak. Therefore, it is usually better to take some time off trading after substantial gains were made. Take a break from trading after the losing streak. Losing streak can negatively affect a trader's decision making. It can often result in loss of confidence and a needy feeling to make money back. However, a trader should resist these urges and take some break from trading. This is mainly because if a trader does not have confidence, it is much harder to execute trade properly. Do not overtrade. Sometimes there are no good trading opportunities. In such times it is usually better to take the role of market observer instead of trying to make money at any cost. DISCLAIMER: This content serves educational purposes only. It is not financial advice.

Education

by Tradersweekly

🔬 STOCK MARKET UNDER MICROSCOPE 🏦 Fed did not raise rates today! 🙅‍♀️ It could have happened but it was unlikely . They did walk back their talk a bit, saying a rate hike would "soon be appropriate" which is a ways of saying they will continue to evaluate the situation. All of this should be short term bullish for stocks, ideally into the end of the month. I'll give this a little time to see if there is anything else that makes sense to add here. I want to keep exposure modest . 🧩 SECTOR OVERVIEW As you can see from the MARKET SCREENER : ⬆️ Outperforming sectors: SEMIS 📲 TECH 💻 FINANCIALS 💰 ENERY ⚡️ ⬇️. Underperforming sectors: CONSUMER DISC 💍 COMMUNICATION ☎️ REAL ESTATE 🏡 The MARKET SCREENER tell us who is leading and who is lagging. I personally always have it open while trading to get a feel of where money flows and observe sector rotations. If you like the MARKET SCREENER, it is free to our community - links in bio or signature. Join for instructions.

by TintinTrading

Want To Improve Your Trading Game? Play Poker!In virtually any field of athletics it is advised that you should cross-train in order to both avoid injury and increase performance . For example, Football players are encouraged to take up pilates, yoga, and swimming. Runners can reduce injury and increase performance by incorporating Rollerblading, Barre, and Zumba into their routines. So what should traders do in order to "cross-train" that will make them better traders, to help them "avoid injury" (as in lose money ) and "increase performance" (as in make money )? My answer: Play Poker! Yes, Poker and Trading are both "sedentary" activities where you are sitting at a desk or table. It is the brain that needs to be toned, limbered up, and made flexible, not the body. (Though you need to make sure your body is healthy too!) So it is safe to say that the peak performance trader needs a mental cross-training routine, not necessarily a physical one. So why is Poker the ideal cross-training exercise for traders? 1: Poker Teaches Risk Management Unless you're a novice or not seriously playing in a virtual poker App, there's little chance you will go "All In" at the poker table. I can count on one hand the number of times I went "all in" and I won every time. Such opportunities rarely happen. When I did move my pile of chips to the center of the table it was because I knew what was in my hand. I "managed my risk". Likewise, the trader or investor should almost never go "all-in", putting their entire account into asset X, Y, or Z because "the market will market" on you and you will lose it all. In trading terms, you can very easily "blow up your account." As Kenny Rogers says, "You've got to know when to hold'em... and know when to fold'em." Good risk management requires that even if you lose say, 5 times in a row, you will live to trade another day. I frequently talk about never risking more than 1% of your account on any single trade . A 5% loss is easy to recover from with two 3-R wins, or one 7-R win. Likewise in poker, with a $100 buy-in, you usually have $1 antes, allowing you to play up to 100 hands (even if you were the worst poker player in the world) risking only 1% per hand. In poker, only if the "odds are in your favor", that is, you have two-pair, or you have three or four-of-a-kind, or a straight, would you consider raising the stakes to 2, 5, or even 10% of your bankroll. If you can make 20R from a 4R "risk" with the odds in your favor, you are now thinking like a professional trader where Risk Management is "Job One". 2: Poker Teaches Emotional Management I like to teach that our goal as a trader is to be totally mechanical - totally rules-based. Our goal is to "Trade like a Vulcan" or "Trade like Spock: Trade long and prosper!" What's the poker analogy? Having a " Poker Face ". Or as the old antiperspirant commercial said, "Never let'em see you sweat." We may have an awesome hand, but we can't display a "woo-hoo" face because no one will bet against us. We may have a terrible hand, but we can't put up a "oh, good grief!" face and let others know that they have even the slightest chance of beating us. We have to play every hand waiting for the last card drawn (the river) because that last card can make or break what we are holding in our hand. And very often it is that last card dealt, "the river", that can make or break a poker hand. 3: Poker Teaches You to Play the Probabilities Growing up in Brooklyn, New York, I remember the famous slogan from the New York Lottery: "You gotta be in it to win it!" They threatened (coerced?) every New Yorker with "fear of loss" if they didn't play the lotto... "Well, yeah, we all know the odds of you winning are are actually close to zero, but of you don't play then they really are zero so you better play or you will feel more like the loser than you already are!" Thankfully, the odds in winning at Poker are much higher than winning a set of numbers printed on ping-pong balls, which teaches you that when you have an "edge"... when you have a "system" that has the odds in your favor (a winning trading system) you can't try to outsmart the system – you need to play every hand that meets the criteria of your system. As hockey great Wayne Gretzky said, "You miss 100% of the shots you don't take." So as Poker players and as traders, we have to play every hand, or every trade that appears that meets our trading plan's criteria, otherwise if we try to "outsmart the market" we will lose every time. And more often than not, even with a terrible hand, say a 2 and 4 of spades, you might find that if you don't fold, every once in a while three spades will appear on the table giving you one of the high-probability hands: the flush . So play every hand . And in trading, take every trade opportunity that appears that qualifies under your rules-based trading system. 4: Poker Teaches You To Stay Humble My poker buddies and I play every month or so. Early in my tenure when I learned to play poker I realized "Hey, I'm pretty good at this.... I'm gauging the probabilities, I'm keeping my risk-per-hand low, I'm taking small profit after small profit and leaving with twice the money I bought in for or more. Drinks are on me!" Then I got cocky... Walking into game four I thought to myself "I'm the Vulcan, emotionless, rules-based, odds-calculating poker player, right?" And that night my proverbial hat was handed to me. It was one of the worst games I'd played to that point. I over-bid, I bluffed (something I had never done before and my opponents knew it!), and I raised bets on hands I know I should have folded. I re-bought in after losing my original buy-in and lost all of that! And I went home with a valuable lesson: Don't think you can out-smart the probabilities. The reason we win at poker is the same reason we win at trading. We must always play the odds, we must never play the low probability hands, we must always keep our emotions get the best of us, and when it's time to fold, it's time to fold!" Last week our poker group met again. I bought in for $50 and left with $135. In trading parlance, that was a 170% return. I was grateful. I learned my lesson. I've got to stay humble and let the hand come to me, let the trade come to me, and never think I can out-smart the table or the market. 5: Poker Teaches You To Set a Financial Target One of the reasons that casinos give their players free drinks, free upgrades to already expensive suites, and free food is they know that "the more you play, the more you'll pay." You can be up $5,000 for the night, then go get yourself some free lobster tails paired with filet mignon, a bottle of wine, and a decadent dessert. Then you return to the tables all fat, happy, and lubricated and proceed to hand all your winnings back to the House. I know more than one poker player who has a rule: "When I double my money, I'm done . I may walk in with $500, and when I'm $500 to the positive, I quit and go on to enjoy the rest of my night, otherwise I'll just give it all back." Similarly, I know many a trader (yours truly included) who may have been up a sizable amount wonderfully early in the trading session, then proceed to give all those winnings back to the market an hour or so later. Setting a daily "win" will prevent you from getting mentally "fat and sassy" where you will become overconfident and then hand your winnings back to the market. As a Poker player, you may want to make a certain amount of money per game. As a trader, you might want a daily amount of "R" or dollar amount to the positive. In either case, when you hit your goal, even if it's in the first 20 minutes of the trading session you need to close all open trades and enjoy the fact that you did what 90% likely did not do that day: end the day in the green! On other words, "Quit while you're ahead!" 6: Poker Player Are Part of a Vibrant Community Full of Fun People! Like traders, the number of people who are committed to improving their poker game are few. We need to belong to a strong community of passionate poker players to perfect our craft just as we need to belong to a strong community of passionate (and profitable) traders in order to continually perfect our skill at taking money from the markets each and every day. There are online poker communities you can join (think: Simulated Trading) and there are global in-person Poker communities that can link you up with other players once you're ready to "go live". These communities are generally free to join and will help you build up the skill to become a proficient and profitable Poker player which, more importantly, will help you become an even more proficient and profitable trader. Is there anything else about Poker that you think needs to be added to the list? Leave a comment below. As always, Trade well! (And maybe I'll see you at the table!)

Education

Performance distribution of retail investors and hedge funds My thoughts about performance. This kind of info is not very available so I have to do some guesswork. We that spend all day in front of the computer expect to get better returns than 10% a year. But we have no idea what is possible and where we "rank" compared to others. All academics look at ever is day traders, yes 99% of day traders lose money and 1% earn peanuts while taking huge risk, we get it. And sometimes they look at passive investors. Cool. But no one ever says anything about active investors or Forex speculators, just that "on average active retail investors outperform", how wonderful, the average, yes I'd call myself the average normie definitely LOL! And regulators are even worse, all they care about is protecting dumb money and scaring people away from day trading. The french "market authority" on television was literally screaming "flee Forex it is dangerous, you should fleeeeeee!", I kid you not. First we look at retail investors. So the french "market authority" (AMF) looked at FX & CFD brokers representing about half of the individual FX & CFD investor population. 14799 persons in the 2009-2013 period. They found that over 4 years close to 90% of traders lost money. This is another of their deceptive tricks. It's just as with science these days, the data says something, the abstract says the opposite. So according to the extremely biased french AMF OWN DATA: - 30% of traders are in the "0" column, and according to their own data there aren't that many traders with tiny accounts, so ~30% breakeven. - They refuse to give any % result, some may be recalculated by overall we do not know, therefore I will assume it does not look as bad (or they'd show) - 5% of all investors make 2/3 of the losses, or at least half - 1% of all investors only are actually making significant returns (and 2/3 of the total) - As always day traders that destroy the stats are mixed with the rest - Most "winning" traders are barely above 0, making just a few hundreds to thousands a year www.amf-france.org From other sources and the AMF sort of confirms this, we know that: - Losers (especially big losers) that stick to investing, the ones that never give up never surrender in the face of adversity, the courageous ones with "heart", ye these guys, their losses get bigger and bigger actually. - Most winners continue to win and their profits get bigger. Here page 19, this is for stocks, we can see the net monthly market-adjusted returns of 62,439 households a large discount brokerage firm from January 1991 to December 1996: - On average, as they keep hammering us with, they underperform the market by 0.14% (each month!) - The average individual investor gross returns are slightly above the S&P 500 index returns (page 3) - The average individual investor net returns are slightly below the S&P index returns (about 91% of the S&P) - The S&P returns a bit less than 1.5% monthly - The worst of the worst managed to return -20.85% below index monthly, probably a permabear day trader or something - The 1st percentile is at -4.86% below market, 5th at -2.45%, and 25th -0.73% - The 99th percentile is at +4.44%, 95th +2.15%, 75th +0.50% - The best individual investor got 48.35% above market MONTHLY - The best individual investor difference between net and gross is minuscule, obviously it is not a day trader, probably some lucky investments - The gross median return is at -0.01%! faculty.haas.berkeley.edu So it seems this is how it goes, a normal distribution: We do not have that much info, and what little there is is rather hard to find, and hidden behind mountains of trashy scams "how much money can I make day trading join my course". I really only care about my own performance but it's always interesting to see how it's all distributed, what is possible, etc. For some reason I am interested in patterns and statistics. Funny. The info does not get shared a lot. Based on research and what gets exchange it seems most "traders" are VERY interested in money and "lambos" and very few are interested in stats, patterns, numbers. Ye I mean what do stats and figures have to do with investing right? It's not about some numbers it's about how much money you can make trading on a phone and what you will do with all of that money right? Honestly if we eliminate day traders that already make up at least 2/3 of FX investors, and all the lambo trolls that hate numbers but "it's ok I manage my emotions", it's not 10% making money but 30% at least I am sure, and 10% making decent money (enough to start a real career). Would be nice if they could just once separate day traders and look at FX investors with a time horizon greater than 1 day. All we can do is guess more or less, obviously more than 10% of these make money, but has to be less than 50% very probably. 10 to 50%, that's pretty wide. Probably in the 20-40 range, that's all I can say with high certainty. Hedge funds next. Hedge funds were doing great in the 90s and Morgan Stanley has a doc about them here: www.morganstanley.com Page 6 we can see discretionary funds making 18% a year with a max drawdown of only 5%. For all strategies except perma-bear the max drawdown is smaller than the annual returns. With all the regulations and harder market (and little fixed income) the results today are probably not as good but I do not think they are extremely different either. My guess on how hedge funds fulfill their max drawdown obligations is they place most the money somewhere safe (92% of the whole in case of an 8% drawdown) and then they risk the entire 8%, they might give a bit of it to each of their traders that go aggressive, and if they return 100% on the 8% that's an 8% return overall. I'm pretty sure that's the idea. But they might not freeze the entire capital and go 10X leverage, maybe they do something more complicated, with 50% in cash/bonds, 30% in "safe enough" investments, and 20% in high risk active trading with a max drawdown of 25% on these 20% (so 5% overall). The definitely do something like this, have to. The serious ones at least. The S&P returned 17.2% with a max drawdown of 15.4%, and page 4 we can see again a normal distribution: - The median directional return yearly was 16.3% (0.9% below market!) and median max drawdown 28.5% - The 75% percentile made 20.5% (3.3% above market), remember retail 75ers were 0.50% above mkt monthly - The 25% bottom only make 11.1% which is 6.1% below market for the year - Stock selection has similar drawdown and the returns of the 25, 50, 75 are 12, 17.2, 20.9 - There are no giant losers or giant winners but there aren't 66000 funds, and they have restrictions - In particular So actually pretty similar thing. The major difference is around 15% of the retail stock investors lost money in a raging bull market and no hedge funds did (except the few bears I guess). Otherwise, same normal distribution but with less extremes for hedge funds, they're more compact around the center (market).

Education

Warren Buffett performance from 14 to 83 Boomers love to say "Warren Buffett made most of his money when he was old". Sorry but no, not really. They are mostly coping. They had 60+ years to do something with their lives, bit late to wake up all of a sudden if you ask me. Was Warren Buffet lucky? Considering the era he lived in he was UNLUCKY. His best years were during the worst market period. The market was strongest when he was a kid and an old man. Teens and twenties raging bull, thirties market slowing down, forties flat market, fifties to nineties mostly up up up. Think performance matter? Think the market is efficient? So the oracle of Omaha has always outperformed the market until his late 60s, and "on paper" his best was in his 30s, but in his 40s the market was flat and he still managed to produce very large returns. According to academic research on employees and scientists they peak in their late 30s, and chess sites also say the best players reached their peak ratings between 34 and 43. Coincidences? If you look at it relative of market returns, dividends reinvested, those are his performances: So even by looking at it this way, that seems more fair, his peak was still he 30s. This period where he "only" made 23% a year was the period that marked all these mindless boomers that have been saying for decades "put your money in the bank". Please do not give me advice you noobs. How are these boomers for real? In that skull of theirs, is it empty? Bank deposits used to return something stupid like 15% and now it's 1% or less, so why are they advising this? It blows my mind, they're actual parrots repeating something without knowing why or what it means. Today meta is: - There are zero no risk investments and on the flip side borrowing is free - Stonks only go up (until they won't anymore), for years, with central banks that have unlimited "money" supporting the equity markets - Forex is much harder (too difficult) for amateurs, and does not trend for long - Day trading is incredibly stupid, it was a terrible way to get very poor returns 3 decades ago and negative returns today - Bank deposits, day trading, mindless price action trend following: All haven't "worked" for over 30 years, amateurs still haven't figured it out Another great tip boomers and noobs give: "go sit in class and wait for time to pass that's rly important for ur future", "you don't have to have kids early you have time". Absolutely idiotic. Cool so by 35 you might know what you want to do, and it's already too late. I've told people over the years "sorry but young people don't do great and even if they do they always end up blowing up", this should not be translated as "Get started when you start having grey hair". You start earlier you'll gain more experience. If people "natural" peak is at say 37 and they start at 35, you really think they will reach their peak in 2 years? Of course not. Especially with investing. Investors might learn fast by being complete one tricks but even that would take a few years to really get decent. You can't really be a complete OTP with everything correlated, and you'd still have to learn more than just 1 stock to make money unless you're really lucky or something. The modern western zombie can't help but be wrong, they're imagining the "dynamic" 20 year olds and the "experienced" 60 year olds. No? Why are zombies like this? Are they actually trying to be wrong? They enjoy saying false things to look open minded? Or just dumb? "Dynamic" = excited. If you are excited in your investing you are doing it wrong. I am excited when my investment has been going up in a straight line for a year but not each time I enter a limit order. Even if you started investing at 5, at 20 your brain isn't even fully formed anyway. Garry Kasparov and Magnus Carlsen did become chess world champions at 22 - MC learned to play at literally 5 and GK at 7 (or before) and he started going to a chess school at 10. And still they were far from their peaks. Now who starts investing at 5 years old? Plus honestly, it's much more complex and you take your decisions over days, weeks, months, not a few minutes (I think the average chess game is 40 moves for a total of 1-3 hours). Also in chess you do not get drowned in a sea BS info and peer pressure, and sorting through all this crap takes a lot of rational thinking, something that appears later on. Now concerning this "experienced" 60 yos. These guys really think Warren Buffett was a mindless fool at 40? He'd been investing for 30 years boys way longer than you at your 60. How much more do you think you learn? There are obviously diminishing returns. I don't have any numbers but it got to be something like in the first 10 years you learn 100x, the next 10 you learn 15x, the next 10 you learn 5x, and so on. Also you need to keep up, a lot of things are changing, a lot of the "new things learned" will just replace the old ones that have changed. The majority of people can't even keep up with things as simple as "keeping your money at the bank does not pay anymore" or "day trading has always been bad but now it does not pay at all" after over 20 years... A last word, and it is soul crushing: I heard from a broker that they analysed the perf of the hundreds of thousands of clients they ever had and of the consistent losers (losing for 6 months) not a single one had turned into a winner (they're all short term, obviously you can't tell if someone is a winner or loser after just 6 months if they're long term and the market is in a downturn for 12). Not a single guy "learned" to be profitable. Out of hundreds of thousands. Not one. So hey, at least there is something positive here: you do not have to waste your time. You can actually know quite fast if you stand a chance or if it's best to quit. This is consistent with the french market authority (AMF) report as well as some academic papers showing that people do not "improve" over time and even lose more and more. Day traders (at least 85% of this guy clients) in 6 months had more than enough time for luck to even out, so that makes sense. By 6 months they'd have taken 250-500 trades minimum so their skill is quite certain by then, large enough sample size. These academics and regulators are a bit dense so forgive them, not their fault, investors DO IMPROVE. The regulators and "scientists" simply struggle with words, what they are trying to say is that investors that lose do not start winning, ever. But they all improve! Winners improve at winning and win more, losers improve at losing and lose more. Scientifically proven. In my personal opinion I think you don't even need 6 months to know if you'll make it. You know what brokers do? They mark some accounts as risk. It has nothing to do with years experience or account size. They look at 1 thing and 1 thing only. "Are this account winners bigger than its losers", if the answer is yes it gets marked as "risk" and the broker will hedge all of their positions in the market, if the answer is no the broker will just let it go to zero with a big smile on their face no need to hedge according to this broker there is literally 0 chance they will ever make money (makes sense, they close their winners before they can ever get dangerous). It's crazy how simple it is. Proves how useless it is to repeat these things. No one doesn't hear the basic tips. On day 1 investors will hear the words "follow the trend, cut your losses, don't day trade" and on day 1 will be decided if they are losers or not. They either go in the right direction or the wrong one. If they didn't listen on day 1 they won't listen on day 600, no matter how much proof is shown, no matter how often it has been repeated to them. This is crazy, do humans (99.99%) even possess self-awareness? Or are they just mindless NPCS that repeat something over and over no matter what? Someone has sweaty hands, is all shaky, and incapable of cutting their losses: there is no hope for them. There is a french expression (works with everything) "Pleutre un jour, pleutre toujours" (coward one day, coward every day/forever). People improve at all sorts of things but the hollywood wonderboy 180 story does not exist. There is an example of "Hollywood 180" story: Ryan Lochte is an American competitive swimmer and 12-time Olympic medalist. At 14 years old, his loss at the Junior Olympics changed his attitude. He later commented: "I suddenly said, 'I'm sick of losing'. After that I trained hard and I never lost there again.". Wow what a turnaround. He 👏 was 👏 already 👏 competing 👏 in 👏 the 👏 Olympics. Top 1% of the top 1%. He was competing in the Olympics without even training seriously. Duh. He didn't go from struggling kid bottom of the class that can't even beat some random average Joe to 12 olympic medals. "Boy is it hard I've been losing for 5 years I'm going to make it with the right indicators and the right course ok new years resolution" ye man sure good luck. Great traders are born, not made, but it takes decades of practice and learning for them to reach their best.

Education

Updated

10 ways to speed up the process & improve our bottom line 1- Get good: make sure you spot patterns and avoid mistakes by practicing First of all obviously, and I did not find this in the "how to improve performance lists" I looked at on the internet, obviously you want to avoid mistakes as much as possible and also we want to make sure we never miss out. So every single day checking the news and/or charts and any other source we may find helpful. And then also regularly going through past trades, taken or backtested, going through the whole process, and even using tradingview replay button on past price action to train our recognition skills, learn to not fomo in, and more. The first 5 years are the hardest they say, and then the price action pops out more easily. 2- Get good: keep reading and learning I'm sure many if not most ideas & strategies see their first spark when we just spend time reading about markets and looking at charts without specifically looking for a strategy, it just comes naturally we spot patterns with time. So keep spending time taking an interest in everything, when you get a little light appear over your head go check if it has any value if a strat can be derived out of it, and this all should just happen by itself over time. 3- Trade lower timeframes, higher timeframes You could get into statistical arbitrage, crypto arbitrage and market making, or any other short term activity. The barrier to entry is here, the skill floor is not down to zero, so there is a large investment to make just to get started. If you are currently hardstuck, it might be interesting, probably not very, from what I have seen most of the money is made using expensive technology and day trader data to take money from the usual retail victims (100% of day traders are "retail" traders). But if there is a bone with a bit of meat left and it's not too much effort for the reward, even getting an extra 2-3% a year might be worth it. Another solution, more intelligent but less attractive to the average "retail" beginner is to look at higher timeframes. One could have no short term activity on a currency that is very choppy and very slow but take a long term position and get a little bit of extra profit. Also with aiming for long term when possible we can get more out of the market, bigger winners (more "pips") = more profit, and spreads become insignificant. 4- Build another business It can take the focus away, the smart entrepreneur will avoid getting too ambitious and beign a jack of all trades master of none, if one is hopelessly stuck at a ceiling they can't breakout of it could be a good idea to stop forcing and look somewhere else, the ceiling might be easier to break later on. A business can add more stable cash inflow, reduce risk and net worth or income volatility, and keep us from tearing our hair out when we aren't getting the amount of setups we want in the markets. 5- Increase position size Go big like Bill Hwang, then blow up like Bill Hwang. This guy over the years (15 years I think) made more than 60% a year return without much people knowing about it as he was running a family office, he grew in 8 years if my source is correct 200 million into 10 billions. At first he tried to speed up the process by cheating, he got caught up in several insider trading scandals so then he tried something else which was leverage. And blew up. His positions being so big makes it even worse, and being concentrated, such a whale exiting crashes these stocks completely. Even the big company Baidu lost 50% of its market cap. Us plebes don't even come close. Even a "large" 1 million dollar account is 1/10,000 th of his 10 billion. I am not encouraging anyone to be a degen gambler I'm saying someone that lives in the west and has been profitable might think "I am willing to risk these 5000 euros", such an account can be built back even by simply working at mcdonalds for a while. The gambling type that risks everything is not the type that ever manages to be profitable. Still, while small we might want to take on a bit more risk, a reasonable amount, to hopefully speed up the process a bit. But this is not the only tool and used after all the other stuff improving etc. So here's perhaps an idea to be looked at. Several companies share prices dropped massively, that's not some legit regular price discovery, the price was destroyed because of a whale causing a fire sale. The term "oversold" could maybe be applied here. Where are all the retail gamblers? Aren't they buying this time? They always chase crashes. Scared? Or maybe too small, or maybe they sold already when the price slightly bounced and they were up 1% LOL! 6- Improve a strategy RR & WR OR allow for a lower PF but get more signals Once you have a working strategy you still improve as an investor but the strategy itself should not be getting optimised all the time or something is wrong. Until we get it right we keep backtesting and working out the contours and details of our strategy, we insist on it to trade it correctly like improving a skill, then once this is done we look for something else and just run it making sure to still give it some time. 7- Add another strategy An obvious way to get more setups hence more profits is to get a new strategy, but this is done only when the previous one(s) is mastered. You can expect this to take 3 months to a couple of years. And it can interfere with your focus of the other one, it can also be somewhat correlated so have to watch out for that. It is a big project. Does not mean we can't always be on the lookout for new strategies and new knowledge, just don't always try trading new strategies, just put the "potential" ones in a corner of your head (and excel DB) and progressively come back to it until at some point after months or years you gathered enough info and really get into it all in. There are several strategies, for stocks in particular I have been looking at, for example I have been posting here and there on this site about the "dead stock bounce" thing but I never traded it, maybe one day I'll start doing so. For now I still have a whole lot to learn about Forex plus a couple of commodities. The easier way to avoid correlations and other troubles is to have a strong trend following strategy, and then another one for other scenarios. And of course when you end up taking a trend following buy on a currency make sure your other strategy buy is not on a correlated one... 8- Trade more assets More uncorrelated assets, if they do not hurt performance = more cashing 🤑🤑🤑! Especially when not much is moving with Forex, just going back and forth, and here you have the S&P 5000 that broke 4000 without hesitation after whales got liquidated and banks had to take the hit, it even gapped up, a bit early to cry victory and stonks time horizons are not the same as Forex ones, but for now it is STRONG and it sure got my attention. Been buying since September/October but been more eager recently. Not a simple snap of fingers and here we go, adding instruments to our activity is a big project, just like a business that sells printers to China starting to produce protection for cellphones for Taïwan or whatever. People think abstract = easy. I'm laughing since it is the opposite. The more intellectual something is, the more difficulty gets ignored, "let's just use a magic wand to make covid disappear" ye good luck with that, what a mentality. Next let's ask devs to code 10 thousand lines a day like it's physical labor and let's ask a scientist picked at random to find the cure for cancer it's easy very little manual labor. There is such a lack of respect for mental activities, it's beyond. 9- Push these winners to the limit S&P again. I've said a while ago I wanted to get really aggressive with the S&P 500 and Bitcoin, I just contained myself 1-2 hours ago to not buy more S&P because I am already ***** deep at that point. This is not the same as being the typical dumb money and greedy pigs that gamble and get wiped out and never are heard form again. If you have this urge to go on the offensive real hard, but within reason as a skilled trader, you can improve your performance. Just don't go all Bill Hwang. Ah if he went aggressive but was 40/40/20 in stocks/forex & cme futures/safe holdings and a bit less concentrated (or in larger cap stuff) he'd be alive now. Humans evolved to "survive against all odds", agility intelligence and social structures helped. "Never give up and survive against all odds" this is not what the markets reward. Markets rewards ambush predators. Get your example from the cheetah, these superfast cats are like bullets. They patiently watch their preys, as we should. Then they run. And 90% or more of the time the prey gets away. The cheetah could easily catch it but is it worth it? NO. A cheetah will not take a diminished risk reward, it will "give up" all the time, "oh noes" says the slow human meatbag, "never give up". Well the cats that survive, that's who. Capitalism 101. The longer they chase, the more calories they spend. Costs go up. Risk also goes up, as they get tired they become more vulnerable AND these seconds they spend chasing they are not paying attention to anything else. So they become less likely to escape or fight off danger, while being much less alert of danger for a long while. The risks are not worth it, and the costs either. Even while being patient and carefully choosing their prey and the moment they go in, 9 out of 10 get away. So they might lose let's say 200 kcalories each time. But now is the good part, once they get one secured, they don't just take a quick bite and run away like all these bagholding profit snatching retail traders. They are destroying that prey. 30,000 calories at once. One big meal. They eat everything. Winrate 5-10% reward/risk 150. Now that's a good trader that extracts all he can from his winners. 10- You can't so learn to be patient RIP. We can always keep improving and doing more and the sky is the limit, but no matter what we do we have to accept that we are going to have to be patient and no one just goes from poor to super rich overnight. It's so hard, but there is no choice. Got to be patient. We are not the FED or the ECB we do not own a money printer.

Education

SPY SECTORS $SPY SECTOR PERFORMANCE

by Breakout_Charts

YTEN 10/10 First pullback , second pullback and now we are on the third pullback . That is the actual situation after getting a +93.10% performance over the course of the week. Right now biotechnological and medical stocks are rising because of the news, but be careful on getting into this stock, it might be too late. Usually stocks do not bounce a fourth time after three pullbacks. Even though, if we analyze the situation using Elliot waves, we could see a new uprising wave, but it is possible because of the volume showing on the candles that are slowing down the downtrend. And the last tool used to analyze this market was the Fibonacci retracement. If prices go below the 38.2 mark, it would be very unusual to see a new high. Have a great day!

Y

by Fernando_132

6 IRRATIONAL BEHAVIOR AND THINKING PATTERNS - THINKING CLEARLY !Hello everybody and welcome, I hope you'll have a pleasant time reading this. And I also hope it'll somehow be useful to you. --------------------------------------------------------------------------------------------------------------------------------- Let's face it, your biggest enemy in trading is not the market, not the hedge funds, not the banks, it's you. Thinking clearly is one of the hardest things to do when trading/investing. We've all, at least once, done something and asked ourselves afterwards, "why did I do this ?" or "how didn't I see this" ? Did you know that this is called the "Hindsight bias" ? Yes, it's a well-known phenomenon in psychology. Before we begin, let me explain the diagram. Developing clear thinking takes time. You'll find it very hard at first, but as time goes by, if you keep your focus on it, you'll notice your performance increasing exponentially (this also applies to your life in general !). --------------------------------------------------------------------------------------------------------------------------------- 1. Confirmation bias The confirmation bias, is the distortion of information to make sure that it fits our beliefs. Let's think about it that way : if you think that the world is an awful place, you'll find facts to back your belief about the world. What happens when you encounter a fact that denies your belief ? You either ignore it or distort it in order to make it fit your belief. It's about the same thing when you're trading. Sometimes, especially new traders, hold bags, meaning that they hold on to losing positions for a long time, hoping for a recovery. No matter what, the trader will find himself putting more weight on the information that confirm his belief (that he's right) and will ignore the information that refutes it (that he's wrong and should sell). In order to avoid the confirmation bias, you need to weigh every new information the same way . 2. Hindsight bias The hindsight bias, is directly correlated to the confirmation bias. We tend to understand things better in hindsight than we do in the present moment. To take the previous example of the trader that holds bags a little further : what happens when the trader decides to cut his losses ? He immediately says : "Oh, all the information I had indicated a clear downtrend, why didn't I cut my losses earlier ?". The hindsight bias. In hindsight, everything appears to make sense. In Trading, the best way to avoid this bias, is to react to the market information that's available to you, rather than trying to predict it or to hope for something to happen. In other words, when you have an edge, you trade your edge and you remain open to any information the market gives you, be it information that confirms or invalidates your initial belief. 3. Loss aversion We feel better losing nothing than winning something - say hello to loss aversion. Overall, humans are more sensitive to negative things than to positive things. Think about how much we complain. Sometimes, it's justified, but often it isn't. We complain about things we don't have, but omit to be grateful for everything we have. In trading, loss aversion, is the pattern that makes us hold on to a losing position for a long time. After all, an unrealised loss is less painful than a realised one. To avoid loss aversion, you have to work on your mindset and start thinking in probabilities. 4. Outcome bias This is another very, very important psychological trait that messes with our trading. Human beings tend to judge a decision by its outcome, rather than gauging the decision process. In the best case scenario, you have an edge and you act on that edge every single time you see it appearing on a chart. The problem is, because trading is all about probabilities, sometimes, your edge won't work. Does this have something to do with the process ? Absolutely not, it's just how trading works. But, when you aren't aware of it, you start questioning your trading strategy, even though, the outcome is not correlated with the process. Just be aware that the outcome is not a reflection of the process . 5. Action bias Whenever we do something to compensate for our inaction, we fall for the action bias. We rather do something useless than nothing at all. If you watch football, you've probably witnessed this bias a lot of times. When the opposing team shoots a penalty, the goalkeeper, either dives left or right, even if chances are that the opposing player shoots right in the middle. Why ? Well, diving looks way better than just standing still, whatever the result is. As Jesse Livermore would say, " Money is made by sitting, not trading ". Considering this bias, for us human beings, it is hard to sit and do nothing. Just think about what you do when you have to wait, be it in a waiting room or at the bus stop. This could be an explanation why most traders fail. They struggle letting their trades unfold and get caught into thinking that their inaction is harmful. Eventually, they end up overtrading, taking trades they otherwise wouldn't, to avoid inaction. "All of humanity's problems stem from man's inability to sit quietly in a room alone", Blaise Pascal. 6. Overconfidence effect Overconfidence is a very evil trait to trading. When we are overconfident, we tend to overestimate our knowledge and take bigger risks. Financial markets are unforgivable with overconfidence. Markets really are unpredictable, therefore we shouldn't even try to predict them. We need to go with the opporunities that the markets make available to us . The best traders are aware of it, therefore they try to be humble and respect the markets. As an example, we could imagine a trader that is on a 5-trade winning streak. He feels great, he feels invincible. What happens ? He takes bigger risks and one day he'll inevitably issue a huge loss.

Education

by UnknownUnicorn6734025

FINDING THE BEST ROI BETWEEN SIMILAR ASSETS 📚 With Alpha's PoP 💬Introduction : Today we are comparing the Dow Jones, NASDAQ, and the S&P by their annual performance to show how our open source indicator "Alpha Performance of Period" (PoP) can be used and why the results are useful. We will also look at other markets later in the writeup to see how they compare and to get a sense of which markets provide the best risk-to-reward and ROI. The idea here is to compare highly correlated markets over time to see which of these markets preforms the best overall represented by a period chosen by the user. This will help tell us which of these indexes is the best/worst to trade/invest with on average. For this article we will assume "best" equates to "best for long positions", but the indicator could be used for other purposes such as best shorting opportunities (largest drawdown amounts). Comparing these indexes shows that the NASDAQ has historically outperformed, while the DOW underperformed, and the S&P has been somewhere in the middle since the tech bubble on a year-over-year basis. You can also see this on the chart as represented by the indicator's metrics contained within its label, but we will summarize it below: NOTE: The figures below are rounded up to the nearest .01%, see charts for exact %'s. Equity Indices Total Annual performance results: (main chart) (Jan. 2000 - present) SPX = +111.79% NDX = +156.10% DJI = +117.65% Now let's look at the quarterly and monthly performance: Equity Indices Total Quarterly performance results: (Jan. 2000 - present) SPX = +104.57% NDX = +160.75% DJI = +111.65% Equity Indices Total Monthly performance results: (Jan. 2000 - present) SPX = +91.22% NDX = +125.274% DJI = +101.68% Equities Summary: While the NASDAQ has had periods of underperformance (for example the dot com bubble burst), on each of the charts you can see that not only has the NASDAQ outperformed (and the Dow underperformed) over time, the NASDAQ has also generally outperformed during each different period measurement. We won't do the math for each period here as that's the main purpose of this indicator, but you can apply the indicator on your own chart and take a look at it yourself. The main takeaways for us are this: 1. You are better off trading and/or holding the NASDAQ when compared to the 3 main indexes. 2. You are better off trading the S&P than the DJI. 3. The performance of the NASDAQ during COVID isn't an anomaly, and it doesn't necessarily indicate a tech bubble, outperformance in a specific period and overtime is the norm with this index. Now that you see how this works on the indexes, let's showcase how it can work for other markets. ----- RARE EARTH METALS~ Rare Earth Metals Total Annual performance results: (Jan. 2000 - present) GOLD = 193.87% SILVER = 186.72% PALLADIUM = 361.27% Rare Earth Metals Total Quarterly performance results: (Jan. 2000 - present) GOLD = 201.80% SILVER = 197.60% PALLADIUM = 304.04% Rare Earth Metals Total Monthly performance results: (Jan. 2000 - present) GOLD = 206.59% SILVER = 209.60% PALLADIUM = 283.25% Rare Earth Metals Summary: As you can see, despite the general public's love of Gold, Palladium vastly outperforms it. Meanwhile, we can confirm Silver underperforms. Many people wouldn't suspect Palladium was superior, but we now know from the resulting data (Hooray!). ----- FOREX~ Main Forex USD pairs Total Annual performance results: (Jan. 2000 - present) EURUSD = 19.48% GBPUSD = -9.03% AUDUSD = 23.90% Main Forex USD pairs Total Quarterly performance results: (Jan. 2000 - present) EURUSD = 20.75% GBPUSD = -16.53% AUDUSD = 20.98% Main Forex USD pairs Total Monthly performance results: (Jan. 2000 - present) EURUSD = 19.57% GBPUSD = -16.70% AUDUSD = 21.93% Forex Summary: As you can see against a USD base-pair, GBP is the worst performing from the 2000's by all periods. One might assume the more popular EUR pair preformed better than for example AUD, but the reality is AUD takes the cake and preformed better than both EUR and USD by each period over time. ----- CRYPTOCURRENCY~ Main Crypto USD(T) pairs Total Annual performance results: (Jan. 2017 - present) BLX = 1351.18% ETHUSDT = 8967.62% LTCUSD = 5012.80% Main Crypto USD(T) pairs Total Quarterly performance results: (Jan. 2017 - present) BLX = 504.60% ETHUSDT = 1124.81% LTCUSD = 824.44% Main Crypto USD(T) pairs Total Monthly performance results: (Jan. 2017 - present) BLX = 357.63% ETHUSDT = 739.39% LTCUSD = 530.67% Crypto Summary: Crypto has the largest period losses, but it also has the largest period gains (by far). Of all the crypto pairs, ETH offers the best ROI. Interestingly, ETH offers the best ROI of all markets mentioned in this article as well (although it also has the biggest losses and highest risk associated with its uptrends). Some might find it odd that Litecoin outperforms Bitcoin (although like with ETH, the drawdown is notably more intense). ----- Conclusion: Use "Alpha Performance of Period" (PoP) to compare markets for what is best suited to your portfolio depending on your individual risk appetite. It is meant to be used on highly correlated markets, but as you can see you can also compare different sets of markets together to get a sense of which offers the best risk-to-reward, ROI, etc. This tool thus has many uses related to figuring out which markets you want to trade based on historical data and offers a simple way to quickly compare past performance. Hope you guys enjoy it! :D Resources: apple.news Hit that 👍 button to show support for the content! Help the community grow by giving us a follow 🐣

Education

by AlphaBotSystem

Updated

Gold-Stocks Ratio Brakeout - A Historic Risk-off Flag The Gold-to-Stocks ratio breaking above the 200-week moving average. The last time this occurred was 2001, and for more than a decade investors were better avoiding stocks and holding gold.

by capriole_charles

Updated

Monthly Performance Review - February 2020 February has been a big month for me in terms of process improvement and profits. I picked up some big winners with SPCE long, CZZ short, XPEL short, and TTWO short however I missed a lot of runners as well. February has also been a crazy month towards the end with this current crash in the markets. Amazingly, I managed to switch my bias early and profit off the dip by shorting CZZ, XPEL, and TTWO. Of course there were a lot of losers as well and my strike rate this month was 35% with a 3.35 W:L ratio. In terms of process improvements, I've changed some of my trading rules to eliminate some of my short comings I noticed last week. For the past month I had been stalking trades on ZM, PAAS, SSRM, and NUGT, however I missed them all. The main reason for this was that all these stock broke out pass my acceptable entry zone right at market open. I had a rule which states "Do not take any trades within the first hour." I only had this rule because that was what one of the professional traders I follow does. I took a deeper dive into my past performance and noticed some of my bigger winners occurred when allowing entries within this time. This makes sense because if a stock is going to breakout, they usually do it right in the morning. I eliminated this rule and I was actually able to catch XPEL short later in the week. Another improvement I made to my process was introducing Anchored VWAP and the High Volume Node (HVN). Anchored VWAP is best used by Brian Shannon to find sentiment and I now use Anchored VWAP on SPY, QQQ, and IWM for market analysis. The second tool I now use deals with Volume Price Profile, which I have been using for awhile, however after looking through some of my recent trades, I noticed most of my losers had high volume nodes right above the entry. These high volume nodes become areas of resistance which is something I do not want to see when entering a setup. I introduced a new rule to ensure there are no significant HVN between the entry and my target when taking on new trades. My main goal next month is to simply improve my strike rate. I believe my entry and exit methodologies are acceptable, however I took a lot of unnecessary trades that could have been avoided by simply following market timing rules or using HVN to find nearby resistance. With this current dip, I don't think I will be taking on too many new trades at the beginning of the month until direction, up or down, is confirmed.

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