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Well that's the difference between a hedge and an exit. You hedge when you want to get a cleaner exposure on a trade. You exit when the risk/loss is too great.

The basic idea is that stock prices are driven primarily by the market factor (e.g. beta to SPX), with the rest being distributed across industry, factor, and idiosyncratic risks.

Analyst upgrades are usually published in business wires, Reuters, and a few other sources.

I recommend reading this: Does the Capital Asset Pricing Model Work? (hbr.org)

1. Calculate your portfolio beta 2. Sell SPY in that ratio for every dollar you have in your long only portfolio E.g. if your portfolio beta is 1.25, and you have $100k invested in your portfolio, then you would sell $125k worth of SPY. You are now beta hedged.

Fed printing doesn't directly enter the economy except when it's used to buy assets from commercial or consumer banks (as lender of last resort), which rarely happens. Most of the Fed "money printing" is in reserves. The Fed creates reserves and uses them to "soak up" treasuries from Dealers...

What's the basis for these statements? Have you actually done a backtest to see what happens to stocks over time?

Interesting. In my experience, good traders: 1) Are incredibly paranoid about being wrong 2) Feel the need to "double check" information 3) Do not make decisions unless they are fully informed 4) Have a healthy respect towards risk management 5) Thinks strategically (chess) and probabilistically...

That's true, professional traders use log changes of set intervals. ;)

Let's put it this way. A professional trader would look for "setups" by backtesting data (fundamental, technical, etc.). The data would need to show a positive return (this means the return > risk) can be generated in order to be considered. Backtesting looks something like this: The...

Price action is lagging.

I don't know why my last post quoted so strangely... A low win-rate is just not going to cut it. The only way to get around that is through creating unique payoff structures through options. But if you're trading stocks and are profitable with a low win rate, then you are just lucky. Low win...

Spot forex is notoriously noisy. You need to know what drives currencies in the first place and how exchange rates are set. Then, you need to analyze your currency pair for what’s driving it, develop a view, and then make a trade. Generally speaking, exchange rates should be a series of mean...

What’s your thesis

what kind of filter do you use on price? kalman?

I think the thesis is on the expected success of a newly released drug. The implicit bet is that demand for the drug will be greater than what is expected on the street, which will result in: 1) analyst revisions moving higher as more information comes to light 2) a potential beat & raise (beat...

Start with this: Secrets of Economic Indicators, The: Hidden Clues to Future Economic Trends and Investment Opportunities: Baumohl, Bernard: 9780132932073: Amazon.com: Books

Amazon.com: The Theory and Practice of Investment Management: Asset Allocation, Valuation, Portfolio Construction, and Strategies eBook: Fabozzi, Frank J., Markowitz, Harry M.: Kindle Store I have a pdf version but the hardcover is worth its weight in gold.

Yes — pick up a textbook on investment management and portfolio theory. Fundamentally, the topics you want to study are asset pricing models (capm, apt, fama-French, etc.), and then move onto portfolio management (optimizing risk and return, hedging, etc. Once you understand pricing models you...