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As I noted earlier, in no way am I advocating the ban on short selling. Any intervention in a free market distorts the fair and true valuation. In the case that you are referring to, the market simply called the government bluff. The traders who had the stock dumped the stock in large...

No, there is no such thing as "can't find a buyer". There are always buyers ... at lower prices. The same goes for the sellers ... at higher prices. Unless, of course, you eliminate the sellers by disallowing short selling. That's not quite right. In order for markets to "crash", both sides of...

It's true that every transaction always has two sides, the buyer and the seller. However, if you disallow short selling, you are effectively reducing the number of people who can sell, while maintaining the number of people who can buy. This shifts the equilibrium in the demand/supply curve in...

I thought the Chinese regulators lifted the short-selling restrictions recently.

Let's see. Suppose my equity is $100K. Then I borrow $650K, and bet the entire available amount on every trade. -- after losing trade #1, my equity is 750,000 * 0.95 - 650,000 = $62,500 -- after losing trade #2, my equity is 712,500 * 0.95 - 650,000 = $26,875 So, I had 100K, and ended up with...

That's not how I would calculate it, as a trader. If I borrow 6.5 times of my equity, and bet the entire amount on every trade, it would take only 2 losing trades in a row to experience a 73% drawdown on my equity, with this particular strategy. And after only 3 losing trades in a row, you would...

Ok, so what is the meaning of that 7.5? Borrow 650% of your stake, and bet everything on every trade?

That's better. However, something fundamental is still missing. Consider trading strategy TS with returns: R(TS): {+20%, -5%} Your formula would compute Kelly equal to 7.5%. That's way too small for this distribution. Intuitively, it should be much higher, somewhere around 95% or so.

Well, let's see. Consider a simple case of a trading strategy which always loses, ether 1%, or 2%, with equal probability. The classically defined Kelly Criterion would prescribe betting 0% of one's capital on this strategy, which makes total sense. Your version would compute Kelly equal to 75...

Okay, this makes some sense.

What's the rationale for using the "mirror" chart?

That report came *after* the 30-point ES drop which is referred in this thread.

Still nothing interesting in the news. Maybe a fat-finger trade in the ES?

Yeah, by 0.4%. This can't explain the ES dropping 30 points in 1 hour, can it?

Wassup with them ES futures today? Dropped 30 points after the market close today, and I don't see any news. Does anyone know?

Since Michael Brown’s death, the cost per square foot of a home has dropped by 47 percent in Ferguson. http://fusion.net/story/104184/ferguson-home-values-are-plummeting-and-residents-are-feeling-the-pain/ Anyone moving in?

That would indeed be directional, because at the current prices of the front contracts, 1 long ES = 2100 * 50 = +$105,000 1 short YM = -18122 * 5 = -$90,610 In effect, you would be $14,390 long.

Yeah, all the other weeks you can trade recklessly. :D

My chart shows the lowest price was 2023.25. Where did 1997.5 come from?

I believe the credit should be given to John Lydon, Martin Clive Atkins, and Keith Levene.