Jump to content
House Price Crash Forum

For Those Who Watch The Stockmarkets


anonguest

Recommended Posts

0
HOLA441

Im in a skype chat room with other like minded folk. Send me a PM if you want an invite if you guys are serious about trading.

As for IG index, I use them every day and I chart independently from them. They don't scam. The reason why stops get hit is people in the market doing it, a market will reverse when the least amount of people are on for the ride. It's natural, it's physics.

Edited by honkydonkey
Link to comment
Share on other sites

  • Replies 213
  • Created
  • Last Reply

Top Posters In This Topic

1
HOLA442

Here's Vodafone. These things are often shrugged off when people don't understand this but very small details give the clues, it never jumps out at you and shouts OH MY GOD CHECK THIS OUT!!

This is a weekly chart but I'll narrow it down to a smaller timeframe to really show you how it's done over the weekend.

GINCaTD.png

You can effectively split your chart into 2 halves, reflecting 2 bull markets. So pre-2008 & post 2008.

Pre 2008 your lower tram lines wouldnt ( I would suggest) have existed. Theyre obvious ex-post i.e. in this bull market because it turned out (in hindsight) 2009 was a cyclical low.

So the pivotal information on your chart thus becomes 2008 when price didnt react as per the lower tram lines up to that event. hence youve had to create new lower tram lines ex-post i.e. your black swan / non-normally distributed outcome.

So the issue now becomes (looking forward) what happens to price at your lower tram line (or upper tram line for that matter if youre a volatility seller) the next time we have a non-gaussian event. Turkeys & Xmas an all that.....

(it doesnt have to be a general market event, bear mkt/crash or whatever, it might be a company specific event like Tesco fraud, BP oil spill and so on).

genuinely interested in your response......

Edited by R K
Link to comment
Share on other sites

2
HOLA443

Im in a skype chat room with other like minded folk. Send me a PM if you want an invite if you guys are serious about trading.

As for IG index, I use them every day and I chart independently from them. They don't scam. The reason why stops get hit is people in the market doing it, a market will reverse when the least amount of people are on for the ride. It's natural, it's physics.

I don't doubt IG is above board and legit, 99% of the time. Maybe their programmer was having a bad day, maybe my account was chosen for a new algo which didn't work accurately, maybe I just misread the charts, but my stops were being hit for two seconds and then the price usually went back up, or less frequently fell through my stop level - as it does.

Also I just really don't have the mentality for that, I'd rather own the shares and just wait until I can take a profit or leave them 'in the bottom drawer' and forget about them. As I said, good luck to you and all day traders.

Link to comment
Share on other sites

3
HOLA444
4
HOLA445
5
HOLA446

Im in a skype chat room with other like minded folk. Send me a PM if you want an invite if you guys are serious about trading.

As for IG index, I use them every day and I chart independently from them. They don't scam. The reason why stops get hit is people in the market doing it, a market will reverse when the least amount of people are on for the ride. It's natural, it's physics.

Thanks. I do use IG but only for their alert service. I trade real shares, I don't spread bet, although I wouldn't rule it out in the future.

Link to comment
Share on other sites

6
HOLA447

You can effectively split your chart into 2 halves, reflecting 2 bull markets. So pre-2008 & post 2008.

Pre 2008 your lower tram lines wouldnt ( I would suggest) have existed. Theyre obvious ex-post i.e. in this bull market because it turned out (in hindsight) 2009 was a cyclical low.

So the pivotal information on your chart thus becomes 2008 when price didnt react as per the lower tram lines up to that event. hence youve had to create new lower tram lines ex-post i.e. your black swan / non-normally distributed outcome.

So the issue now becomes (looking forward) what happens to price at your lower tram line (or upper tram line for that matter if youre a volatility seller) the next time we have a non-gaussian event. Turkeys & Xmas an all that.....

(it doesnt have to be a general market event, bear mkt/crash or whatever, it might be a company specific event like Tesco fraud, BP oil spill and so on).

genuinely interested in your response......

The lines are based upon that whole 2007-2008 swing, so no they wouldn't have been there pre that event. Everything that has occurred since then has been a reaction to that event, it controls what is occurring now.

Basically the price is currently at balance, not at an extreme either way (bottom or top line), so based on that it's 50/50 where it will go with a bias to the top due to the fact it is going up. To determine what will happen on a very large timeframe is very difficult. The trades in simplicity would be buy the bottom line and sell the top, but of course you can ride it up to the top first since it's not there yet (and I'm not saying it will get there). Trading is a lot about waiting for something to happen (price getting way out of balance) and taking advantage of it (riding it back to balance)

The price of a stock, in a perfect market wouldn't move, buyers and sellers would be at equilibium. That is what is always happening in the stock market, the price of the stock is always looking for equilibrium (balance). It's price zig zagging is it looking for it.

If you look at that weekly and 2 hour chart, they look the same, look at them zig zagging up, yet they are two completely different charts essentially. Price on an unending quest for equilibrium.

Edited by honkydonkey
Link to comment
Share on other sites

7
HOLA448

The lines are based upon that whole 2007-2008 swing, so no they wouldn't have been there pre that event. Everything that has occurred since then has been a reaction to that event, it controls what is occurring now.

Basically the price is currently at balance, not at an extreme either way (bottom or top line), so based on that it's 50/50 where it will go with a bias to the top due to the fact it is going up. To determine what will happen on a very large timeframe is very difficult. The trades in simplicity would be buy the bottom line and sell the top, but of course you can ride it up to the top first since it's not there yet (and I'm not saying it will get there). Trading is a lot about waiting for something to happen (price getting way out of balance) and taking advantage of it (riding it back to balance)

The price of a stock, in a perfect market wouldn't move, buyers and sellers would be at equilibium. That is what is always happening in the stock market, the price of the stock is always looking for equilibrium (balance). It's price zig zagging is it looking for it.

If you look at that weekly and 2 hour chart, they look the same, look at them zig zagging up, yet they are two completely different charts essentially.

Thanks for reply. I suppose my question really is what happens when this no longer holds true? Since you cannot know in advance.

Link to comment
Share on other sites

8
HOLA449

Thanks for reply. I suppose my question really is what happens when this no longer holds true? Since you cannot know in advance.

No, but we do know that when it gets there, top or bottom it's getting at an extreme.If it breaks that we know even more as it's signalling to us that things are changing. There is nothing, as yet to say it's going to go down, and when there is it will be much lower (on a weekly timeframe). Top picking is very difficult. This is where you watch lower timeframes and start watching buyers giving up and a change occurring.

You pick up on these things when you watch it every day, every stock and market has it's own unique characteristics (like a personaliity, perhaps based upon the personalities of the major market participants involved?), it's 80% art and 20% logic.

When the stock markets next crash, those that watch them on a lower time frame every day will have picked up clues beforehand (like knowing if something is up with someone close to you). To everyone else it will appear to come out the blue.

Edited by honkydonkey
Link to comment
Share on other sites

9
HOLA4410

Fundamentally the market is zero sum (well it's a net loss game after fees and costs) so if you think you're smarter than the rest go for it. I think you're seriously outgunned by professionals and more recently high frequency trades do the odds of long term gains using short term strategies through both a bull and bear market are not weighed up by the risk and capital at play to make any meaningful nominal return.

when there's a thunderstorm in the market and you're lying on the sofa trading from your iPad vs 10000 hedge fund professionals competing for 1ms time gain..i would of say good luck

Link to comment
Share on other sites

10
HOLA4411

Fundamentally the market is zero sum (well it's a net loss game after fees and costs) so if you think you're smarter than the rest go for it. I think you're seriously outgunned by professionals and more recently high frequency trades do the odds of long term gains using short term strategies through both a bull and bear market are not weighed up by the risk and capital at play to make any meaningful nominal return.

when there's a thunderstorm in the market and you're lying on the sofa trading from your iPad vs 10000 hedge fund professionals competing for 1ms time gain..i would of say good luck

Professionals are not as good as you think they are. Major market players (whales) can only do so much, they cannot decide to sell the NASDAQ down to nothing for example. Their size allows them to bump markets around a little but ultimately the markets price is based upon EVERY participant with there being many, many more players in the game than a single entity can influence.

When an single entity gains control of a market it's what is termed as 'corning a market'. They are then in control of it due to their position, it's what the hunt brothers did to silver in the 80's. When this occurs, generally the authorities step in to fix it (On January 21st, the COMEX announced that it was suspending trading in silver and that they would only accept liquidation orders.)

Today it's much harder to corner a market, and probably illegal in many respects.

HFT traders and 'professionals competing for a 1ms time gain' are trading a different market to me and you. Interestingly the NASDAQ data centre has equal lengths of cables going to every server rack, so those closer to the switch are at no advantage to those over the other side of the room. (other side of the room! with fibre cable and data travelling at the speed of light, crazy)

Edited by honkydonkey
Link to comment
Share on other sites

11
HOLA4412

Fundamentally the market is zero sum (well it's a net loss game after fees and costs) so if you think you're smarter than the rest go for it. I think you're seriously outgunned by professionals and more recently high frequency trades do the odds of long term gains using short term strategies through both a bull and bear market are not weighed up by the risk and capital at play to make any meaningful nominal return.

when there's a thunderstorm in the market and you're lying on the sofa trading from your iPad vs 10000 hedge fund professionals competing for 1ms time gain..i would of say good luck

I personally make use of a lot of what you say. Contributors to me doing well thus far in the investing world (not trading) include minimising expenses (buy/sell costs, buy/sell spreads, platform fees, annual expenses etc), taxes (avoid as much as possible) and then grab one of the few risk/return free lunches in town - multiple asset classes rebalanced.

Link to comment
Share on other sites

12
HOLA4413

Honkey Show me any random time series and I can make you believe it's orderly. The problem with the market is that 364 out of 365 days it's efficient and rational.and then 1 day it's totally bizarre and irrational and will wipe out most day traders mum and pop investors with a bloom berg terminal thinking they're the dogs b*llocks. This 1 day however might come as a day or a couple or a week or a month,in a day week moth or year (s). If you've done this for 7 years that means you missed the volatility of 2007 and the crash of 2008. See how you feel when suddenly everything moves outside your lines and your invested pot is wiped out with a margin call (if levered).

Rubbish. For 220 out of 220 trading days mkt is inefficient. It always has been.

Link to comment
Share on other sites

13
HOLA4414
14
HOLA4415
15
HOLA4416
16
HOLA4417

Soros and many others

Liquid markets are efficient in the narrow sense of being hard/impossible to beat. Inefficient because they're not inherently optimising. Everyone's a noise trader to some extent. Even Soros and Buffet have been known to make poor decisions. Quant funds full of Ph.Ds routinely blow up.

Link to comment
Share on other sites

17
HOLA4418
18
HOLA4419

(it doesnt have to be a general market event, bear mkt/crash or whatever, it might be a company specific event like Tesco fraud, BP oil spill and so on).

That's a part of my investment strategy, looking for companies that have had there own mini correction. One share I openly bought on here was Sainsbury's during the Tesco fiasco at an average price of £2.35 (factoring in the recent 5p dividend) 10,000 shares which is my biggest single share holding by a country mile. I will match future dividend payments with my own money, physiologically it feels as though I'm getting shares for half price :) that is a long term share hold 10+ years.

Another recent purchase was De La Rue (1,000 shares on the nose, yes my portfolio really is OCD) for £5,000 which is my minimum and usual stake. That investment is currently up £780 (helped by takeover rumours) for various reasons (awarded contracts) I'm looking at to hold for five years only.

Esure was another purchase when they bought out Go Compare (not very well received) and I bought sub £2 (2,500 shares).

There's a few others recently bought I won't mention as I think you get the picture.

Link to comment
Share on other sites

19
HOLA4420
20
HOLA4421

Fundamentally the market is zero sum (well it's a net loss game after fees and costs) so if you think you're smarter than the rest go for it. I think you're seriously outgunned by professionals and more recently high frequency trades do the odds of long term gains using short term strategies through both a bull and bear market are not weighed up by the risk and capital at play to make any meaningful nominal return.

when there's a thunderstorm in the market and you're lying on the sofa trading from your iPad vs 10000 hedge fund professionals competing for 1ms time gain..i would of say good luck

Most hedge funds are (effectively) put sellers. The end.

Link to comment
Share on other sites

21
HOLA4422

...I explicitly said yield and dividend cover if it's >1 then it's out of profit. Clearly the data is historical and past performance doesn't reflect future performance etc etc but you can get a pretty good idea of the current years performance by looking at the Investor Relations part of a companies website and RNS releases followed by a cursory glance at the balance sheet paying particular attention to liabilities, debts and amortisation. Not one of my shares selected this way in the last three years has yielded a loss. My high risk investment strategy is another story however.

Worth a read (probably several reads): http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1420356 (Shorter earlier paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=976652

General idea is that risk/return not positively correlated and consideration is the wrong way round and retrospective; there is therefore no risk premium and all assets have the same expected return. People assess higher actual returns as necessarily indicative of being riskier, but more risk does not mean higher expected return. If, as author argues, performance appraisal is relative (envy) not absolute (greed), and everyone's investing relative to the same benchmark, that associated risk premium is zero. i.e. 'risk is a deviation from what everyone else is doing, and therefore becomes avoidable and unpriced, similar to diversifiable risk in the CAPM'.

More risky (more volatile) = negative risk premium and lower returns that don't adequately reward for risk taken, because absent comparative advantage it's equivalent to just punting and hoping. So the goal should be low volatility investing. Author discusses ideas from a related book (series of videos): http://www.efalken.com/video/index.html

Edited by northshore
Link to comment
Share on other sites

22
HOLA4423
23
HOLA4424

Disagree. The difference between trading and gambling is quite clear.

A gamble is a win / lose event on a single event, where as trading or investing goes as on long as you want it to continue (unless a share is suspended), i.e. you can be down on a share only for the market to catch on to your original thesis for investing in it.

Yes we can talk about edges on both and probabilities but trading is not in the same category as gambling.

However as has been well documented with black jack you can play the probability game, well, you could, before the Casinos caught on to it.

i think betfair would be a good place for you if you are into probability , but laying bets not placing them.

basically anyone can be a bookmaker , old buddy of mine was making 5k a month doing this

i prefer buying and reselling junk on ebay ;) £600 profit this week

Link to comment
Share on other sites

24
HOLA4425

Liquid markets are efficient in the narrow sense of being hard/impossible to beat. Inefficient because they're not inherently optimising. Everyone's a noise trader to some extent. Even Soros and Buffet have been known to make poor decisions. Quant funds full of Ph.Ds routinely blow up.

Oh for God's sake.

NOBODY suggests these guys are 100% correct. And WTH has THAT to do;w/ mkt efficiency anyway?

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.




×
×
  • Create New...

Important Information