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Systems

Stock feedback loopStock market is a adaptive system or a stock, with feedback loops (for inflow, outflow function). Where nobody knows the outcome or future, but feedbacks (corrections or resistance) gives tells (makes inflows or outflows). Without a common leader. Economists think in models (price is the result of supply-demand, or inflow-outflow) that helps to explain system behavior (short term moves), but models are just ideas to explain complex world (models work until they dont). System thinkers study the stock not aggregate behavior . Looking at markets trough perspective of "eco system" helps better understand the drivers or moving forces?
FOREXCOM:SPX500Education
by citsvar
The most common malpractice in all of Trading: Back-testingGiven ANY in- or out-of-sample time series, including purely random, synthetic data, anyone can generate (inflate) ANY Sharpe Ratio by repeatedly applying different trading or investment strategies to the same time series sample! By definition, purely random data has no discernible structure. Consequently, no method can exist to predict such a sequence - I.e., Sharpe Ratio = 0 must hold in all instances. Yet, ... See main graph! In the past It has been shown just how easy it is to generate Sharpe Ratios of 4, 5 or even >6, on any data, including on purely random, synthetic time series data when in fact, the only possible value in those instances should be S.R. = 0. As a matter of fact, this misleading (self-defeatists?) practice is so common and wide spread in finance and trading that the American Statistical Association considers it "unethical" (American Statistical Association ). (More importantly, it is a remarkably expensive way to fool oneself.) The above stems from applying the same rejection threshold for the null hypothesis under multiple testing will grossly underestimate the probability of obtaining a false positive. Unlike in the "other sciences", there is no "replication crisis" in finance or trading, simply because such checks don't even exist there - since those would be impossible to carry out. (Is that why the only two kinds of academic papers which never get revised or retracted are written in the fields of Finance and Theology?) The bottom line; In the common case of testing a trading or investment system, given a set of out-of-sample time series, one MUST increase the rejection threshold for the null hypothesis in proportion to the number of times ("peeks") such tests are carried out! (Good luck fooling yourself that way!) Anything less is just simple curve-fitting! For more in-depth explorations: Marcos López de Prado, Michael J. Lewis codemacher.com
CME_MINI:ES1!Education
by Nemo_Confidat
5
Retail gamblers found the holy grail... To be a rogue trader!I just had a little look into "robots". I've known from reading some of the BIS reports that Forex quants mostly vanished after 2008. But I wanted to go on these FX retail sites that are heavy in the "automated" very short term "trading", which is not actually day trading as they run these programs 24/24 there is no "end of the day so let's stay out of the market for 2/3 of the time to compound profits faster" 😄 Here is how I expect an exchange with an "automated" day gambler would go: My day gambling strategy works muahahaha it does well on backtest for 1 years.   Me: "That's simply because the pair you tested it on has been trending for 1 year you numbskull" Well you just have to apply it in the right conditions!   Me: "With your crystal ball? If you know what they are, why not just manually take 1 trade?" Aha! Because of the power of compounding! Rather than risk 1% to make 5% I will make 2% 25 times.   Me: "Your brain on holiday? Forgot you would also compound spread costs and losses?" Well forget it, if you rly zoom in and can't see anything it looks magical! Doesn't depend on the 1 year trend!   Me: "Then it depends on the 1 month trend?" No! no matter what you say I have an idiotic answer! Usually starts with "You just have to"! I'll throw idiotic answers at you until you get bored and give up on me because I am hopeless!   Me: "Well done I give up" "Thanks for the laugh though" 😂 Take a good friend of mine, UDNCNY: I can tell you for a fact that an "automated strategy" of the kind I am going to describe would work. Don't even need to backtest it. The strategy is as follow: Take about any indicator (RSI, Bollinger Bands, etc). When the price goes down (< 30 RSI or lower band) then goes back up to the middle (RSI 50 or center of Bollingers) you sell. And of course the same on the opposite with buying. Yes that strategy would work, we can quickly eyeball it: In practice this is not even what they do. A risk-to-reward ratio as enormous as puny 1-to-1.8? That's like 1% of retail. Never! What they do is have super distant stops, or no stops. And quickly by looking at USDCNY you understand how they can win. Shorts at a loss are all in a pullback, and the price never goes very far, so by just waiting they will turn into winners at some point. In my example which wasn't the best part of the USDCNY trend, there are 6 short signals, and 3 longs. The longs that are not winners quickly, will "never" recover so they'll take a loss on a far away stop here. But some longs are winners, and most to all shorts are winners, the smaller the reward and bigger distance the stop is, the close to 100% winrate it gets on shorts. To sum up, with their ridiculous high winrate strategies applied in the right conditions: - The vast majority of trades are going to be winners no matter what - Maybe 1/3 of the losers are in the wrong direction and will be big bags - Maybe 2/3 of the "losers" are in the correct direction and eventually will recover These troll retail gamblers are zooming in a flower to the molecule level and wondering why it suddenly went invisible. Must be magic! They have no clue. There is an insect on the flower, that's why you can't see the flower molecule anymore you numbskull. This indicator strategy I mentioned works on a trend, how about a nice thick really gross sideways? Constantly stopped! But have no worries for the retail gamblers have a trick up their sleeve! With a very wide stop such as the risk is 20 times the size of the reward you will keep winning! Hurrah! Martingale! And then it will start trending in the wrong direction and the clowns will get wiped out. And I can assure you, this happens more often than 1 in 20 times 🙂 Now we are getting to my favorite part: The holy grail in the title. I went to myfxbook take a look at system. By default they show you only the ones with positive returns, and many of those are very recent. No no no no no. let me change that filter to at least 1 year of activity, and any returns. What's this? More than half show red returns? Oh my that's a lot of -99% 🙂 Most people quit before getting to -99. How about I pick one of the "winners"? Weird, why are their open trades private? Another one. Private. Another. Private. And another, private again! Oh I found one! TrumpBot. Interesting, that's a lot of red sir. 70 open trades, almost all in the red. USDCAD, EURUSD, USDJPY. All EURUSD are sells, and all the ones ones are buys. He took plenty of short term trades (well long term now as he's been holding the bag for a while) LONG on the USDOLLAR. Oh no! Remember USDCNH? Well these bags go back to early in the USD downtrend. He's been holding for nearly a year 🙂 L - O - S - E - R Just takes 1 L to wipe out these clowns. They can hack some site to make losses vanish, and obviously the dum dums that buy these kinds of systems are too lazy to really do their research so they never notice it, but if it's real money IT'S REALLY GONE. There are some guys that have been struggling to make money for 20 years and have sold robots for 10. Is it cruel if I... roll myself on the floor while I laugh to tears? 🤣 What about all these "private" systems? They're holding bags too? There is a name for this. It starts with an F. And ends with raud. It is the rogue traders specialty. They do a bit more (pros), call them "hedges", manipulate accounting for example, take opposite positions to cut their losses while keeping them secret (unrealized)... Here is a regulator release on famous Karen Bruton, known as "the supertrader". She was made famous by Tom Sosnoff that had her appear on his show. The SEC fined her and a partner to over a million dollar. She lost way more than that. No jail. www.sec.gov Tom Sosnoff is a market maker from the 80s that created a popular trading platform that he sold, and now teaches people to sell option spreads. With no edge or risk it will return little money, like 1%. Karen the Supertrader got superresults by leveraging that strat. Which causes it to LOSE money. Looks like Karen couldn't figure out high school level maths, nowadays this got to be 2nd uni year, the levels has collapsed it's amazing, my sister aiming for med school doesn't even HAVE math classes since 16 year old, science with no maths, genius government. "But kids don't like it", ye so let's make them even dumber than they already are! Yes but Karen convinced investors, and even Tom Sosnoff and his colleagues, that she made money! Ye, just like all the myfxbook trolls. She never closed the losers. Plenty of realized gains, and much larger unrealized losses. Pathetic. And the flip side? Warren Buffett has held unrealized gains on Coca-Cola since 1987. Never held losses very long. Ever. Some uni nerd looked at it. We know because he has to report all positions. Losers (and crooks) hold losers. Winners hold winners. That simple.
Education
by MrRenev
867 China Medical Systems Breakout / Long IdeaHello Tradingviewians, CMS has been in a long consolidation to digest lowering growth rates. Additionally it has been under fire by short sellers, alleging CMS of faking revenue numbers. Should the numbers be genuine, and factors like consistent insider buying suggest it, CMS represents serious value at this point. Technically, a two year downtrend collides with the support line of the superordinate uptrend. Should ladder win, a short squeeze may follow to previous interim highs. After a phase of returning confidence, all time highs could be reached again. This is my first published technically supported investment idea. Let me know what you think. Thanks! BR
HKEX:867Long
by UI00
Community Health Systems Overvalued Those who have been following Community Health Systems since the firm's stock tumbled in October 2016 following the $7.6B merger with HMA may be wondering if the hospital giant has found its footing after three consecutive quarters of being EPS positive, rallying stock prices to a 52-week high record of $11.04/share. Today, I am here to tell you that this stock is very much overpriced compared to the firm's current market value. Highlights (Quarter by Quarter Fundamental Analysis) Short-term assets such as Cash and Cash equivalence have increased again by 17% to 1.8B, while receivables and inventory have decreased, signaling that Community Health Systems could be improving their asset turnover or we will see a decrease in net income next quarter. Total assets have slightly increased while debts have slightly decreased resulting in a 2% decrease in debt-to-assets, however, the firm has continued the trend of financing assets with more debt with a 5% increase in debt-to-equity from 28.1% to 29.5%. CYH also maintains an enterprise value far greater than their market cap value. CYH has continued the trend of cutting SGA expenses. Although we see a reduction in FCF, it remains positive. Using the DCF model, we have a fair-market-value of about $6.30/share. (One-year Chart using Technical Analysis) Upon reviewing the charts, we will most likely see a decline in the stock's price. The RSI and MACD are bearish while the price is testing the 20 EMA. Analyzing the volume, we are seeing that the bulls are starting to lose momentum. Short/put - $5.70 (low confidence) to $6.30 (high confidence)
NYSE:CYHShort
by OrangeTrader93
Unisys: Long-term Sell opportunity.UIS made a massive +60% weekly rise after it agreed to sell its federal government contracting division to SAIC for $1.2 billion. The result technically, was an extremely overbought 1D chart (RSI = 80.509, MACD = 0.480, ADX = 39.766) with the price approaching the 21.00 Resistance (Since September 2018). There is an interesting technical pattern when the RSI hits its 81.500 - 83.000 Resistance Zone after the formation of a Golden Cross. The price of the stock makes a top, a few days after the RSI hits that Resistance level. What follows after is a strong and lengthy decline (around 1 year) towards the 6.45 - 6.70 Support Zone. This pattern appears to be cyclical and has been in effect since 2016. Since Unisys' earnings are end of February (2020) we may be seeing that top then near the 21.00 Resistance. Our advice to sell then and take profit on any level you feel comfortable towards the 6.70 Support. ** If you like our free content follow our profile (www.tradingview.com) to get more daily ideas. ** Comments and likes are greatly appreciated.
NYSE:UISShort
by InvestingScope
1
ES Update - Breaks 61.8%!Following from my last, I mentioned that the full half way back would be an area of interest for shorts if lower time-frames confirmed. I am still not in any swing positions because no confirmation was given. In fact, the full half way back 61.8% has failed suggesting from my way of framing the markets that price is due to head higher. This recent move up in a V shape has taken out previous highs thus far, so I will be looking for a pull back to the respective 50% level. Currently this stands at 2808. However, I would require a confirmation on the lower-time frames before entering into any positions. Price is quite far from the area of interest, and who knows, it could continue higher without giving any opportunities. If price is to continue moving higher, I will just trace my fibonacci levels accordingly to get my next pull-back levels of interest. Although there is support levels visually around 2729 which may be a reason for the reversal to the upside on ES, I don't consider myself with the subjective nature of support and resistance. One can say my approach of Fibonacci analysis is subjective too. The only difference is that I have used this approach for a long enough time that I am able to objectively identify my levels in a consistent way. Anyway, if price is to continue higher, the larger long setups from the beginning of the year have not hit target yet at 3110 region. So, if price is to continue higher in "waves" (term used loosely - not Elliott waves), this is the target I would be looking at to begin with because there has been no confirmation of longs failing YET. Some comments I would like to summarize with: 1. I am looking for long opportunities. Currently area of interest is at 2808.00. However, this could change with price movement so I will be looking at continuing to trace the ES in real time too. 2. The long setup from the beginning of the year has not failed yet. 3. I am not going to remain biased though. If there is evidence using my approach to suggest long opportunities fail, I will consider short opportunities. 4. If you also day trade like me, you can capitalize on short-term opportunities in either direction. 5. Patience is key and confirmation is required before entering into any setup. 6. Always trade whichever setup trades first. If you are in a situation where you are between a long and short opportunity, trade the setup that trades first.
CME_MINI:ES1!
by vyas2468
A simply trading method using EMA's and price actionHere I describe a very simple systematic trading method using a set of four Exponential moving averages (9, 20, 34, 50) along with price action as your trigger for long and short signals. This is a simple trend following system where you are following the trend via buying pullbacks in up trends and shorting rallies in downtrends, therefore you are playing the trend at hand vs fighting it. This method spots well timed and systematic entries that are very mechanical with defined entry points and initial stops. It is also not curve fit and can be used across any time frame from 1 min, 5 min, 60 min, daily, tick charts, etc. You don't need special custom expensive indicators, standard indicators like these work just fine!
CME_MINI:ES1!
by frailey91
2