"THE MARKET... consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Alexander Elder

Saturday, March 1, 2008

Monk of the Month

Your comments,
tips and prognostications.


pupkinus said...

will SP be higher or lower at the end of this week? your bet?

pupkinus said...

I have an OTC put option on the cash value of Dow with strike of 12300 expiring on march 15th with the breakeven point around 12000. Me thinking whether to buy another one... what do you think ? that would be a slight "double down" but, technically, a break below 12000 is quite possible... i have options in my "toy" portofolio and really like playing with them... maybe you should try this too ;)

Charles Longfellow said...

IF you are right, will it be for the right reasons? I haven't got the foggiest which end will be up at the end of the week, but will I be able to say then that I stayed to my personal trading rules? Without judgement, do you include "doubling down" as a method within your own trading system? If so, then by all means, it would seem an ok thing to do. If not...
Having said that, I do appreciate the tip.

pupkinus said...

doubling down is ok only if the initial position was half of the normal size.
I trade options in a discretionary manner, so there is no strikt algorithm in place. i learnt that it is nice and comfortable to trade a small portofolio in a discretionary manner so I can be more "creative" and do not suffocate in the iron discipline imposed on my big portofolio. I understood that when I allow myself small, very small, discretionary trades, it is much more comfortably psichologically to make disciplined trading decisions for the big portofolio. just a small psichologicall trick. by the way, ytd my discretionary portofolio fares far better than the systemic one and i guess i will translate some of the "discretionary" ideas into algorithms and use them in my big portfolio... some of the best formal ideas were found during discretionary trading.
sorry for the long rant :)

Charles Longfellow said...

Useful. The discretionary account serving an advanced role as a kind of demo account. Ironic that it is beating your larger portfolio to date. In drawing/sketching there is something called the "gesture drawing", that looks like a big mess on paper, but serves to free up the right hemisphere of the brain. Of course, better that one's total portfolio doesn't look the mess.

pupkinus said...

when i see my discretionary account beat my mechanical account i conclude that i have some fresh and interesting ideas and it is time to go to the drawing board for new systems.
what's your system based on? indicators? support? resistance? candle pattern? can a computer trade it? just curious :)

Charles Longfellow said...

Just using the old MACD in different time frames, together with everything else. Still very much a work in progress. I did have the thought some time ago that if anyone actually found an excellent system that consistently worked, why would they sell it to others for $99.95, or whatever? Don't get me wrong! I am not that person!!! But your question does point to the likelihood that a "best" system, if it does exist, would probably not be "broadcast" indiscriminately. Perhaps that's a good thing? Certainly there is more than one way to trade well.

eXTReMe Tracker

What is a Bucket Shop?

"Bucket Shop is a specifically defined term under the criminal law of many states in the United States which make it a crime to operate a bucket shop. [2] Typically the criminal law definition refers to an operation in which the customer is sold what is supposed to be a derivative interest in a security or commodity future, but there is no transaction made on any exchange. The transaction goes 'in the bucket' and is never executed. Without an actual underlying transaction, the customer is betting against the bucket shop operator, not participating in the market."
see: Wikipedia

The SEC believes that "internalization" is somehow different, and this affects ALL of your online trading, no matter what you are trading. Trades that are executed outside of the exchange, never reaching the main market, effectively hide data from technical analysis, and skew pricing.
see: Not a bucket?

"... internalization hurts retail customers and market quality"

see: EconPapers

Blog Archive