BWolinsky Trading

[talontrading]

BeaoWo,

Can we discuss this not actually having anything at all to do with pairs trading?

 

[bwolinsky]

Quote from Mike805:



Also, since you have Admin privliges at C2, you've deleted the post where you claim you've actually recieved VC funding. And secondly, I'm not, nor was I ever a vendor, I put up an old system on C2 that a poster from another forum called me out on. I proved him wrong and won the bet. Bet's over and so is my participation in C2.

I've never deleted posts...ever. I deleted a Gilbert Arevalo post once, but that's it. The thread is still out there, and last I checked, you were still running Spy 1 trade per day, or is that not your system?

I also let Magna clean up the thread for me when someone gets out of line.

 

[bwolinsky]

Quote from Mike805:


Frankly, what you have going for yourself at the moment is the ability to attract attention to yourself. However, have you noticed its mainly negative attention? Do you ever question why that is?

Think about that for a while and set your ego aside while you think.

You'll find very quickly that any publicity is always good, and I do find ways to keep it going.

Quote from Mike805:


As far as my research is concerned, I have little incentive to reveal it anywhere nor to anyone. You see Beau, I have been trading for a while and have made decent money from it - its not paper money from a hypo track record nor is it from a simulated backtest. Its real money Beau. Its my livlihood and I don't treat it like some BS marketing/self-aggrandizing game.

I treat my money very well. I only trade based on my trading systems, and have since I started. Assuming I don't trade is your first mistake. I've made money, that's all I need to say. I don't use WL for entertainment. I use it to find edge, and I'm telling you I have it.

I think you confuse confidence with arrogance. They are not the same thing. Every credential I have is suggestive of the ability to generate profitable trading systems, whether it is my college degree, the backtests you see, and/or successful completion of Level I of the CFA Exam, they are all part of my plan and long term goals for the future, part of which may include a permanent presence on sites like C2 and Covestor. Eventually, as with the letter of commitment I received, it will play out for me with a huge plus to my bottom line.

<i>The last thing I will leave you with is what's it to you? If you don't want to listen to me, then ignore me. The thousands of people who have read my thread can decide for themselves if they'd like to follow my life's work for the next several decades or so from this thread. It's best if you decide whether you want to pay attention to me or not. Your presence is wearing out its welcome here.</i>

<b>We will have issues if you continue to slander me by calling me a liar. Everything I've said is documented, and you have no substantive evidence of any misrepresentation. So go on, prove I'm lying, because you can't, and it probably bothers you. I will pursue legal action if I feel it is affecting my livelihood and professional activities.

 

[Mike805]

Quote from bwolinsky:

You'll find very quickly that any publicity is always good, and I do find ways to keep it going.

I treat my money very well. I only trade based on my trading systems, and have since I started. Assuming I don't trade is your first mistake. I've made money, that's all I need to say. I don't use WL for entertainment. I use it to find edge, and I'm telling you I have it.

We will have issues if you continue to slander me by calling me a liar. Everything I've said is documented, and you have no substantive evidence of any misrepresentation. So go on, prove I'm lying, because you can't, and it probably bothers you. I will pursue legal action if I feel it is affecting my livelihood and professional activities.

I apologize for saying you deleted posts. You did not. Here is the post I was refering to.

Quote from Beau from C2:

"Hi, all. I recently presented Pairs Trading QID QLD Scalper to a VC firm. They agreed to be a co-investor with one of my other clients in the amount of $5 million. (I didn't pitch them on buying the system).

C2 has been a great way to build a verifiable track record. The returns are very similar to what you see on the site, and I've noted some positive slippage between real life fills."

So, what exactly are you representing here, Beau? Did you recieve funding or not? If you did not recieve the funding, but, claim you did... should we assume this was an effort to build up your rep or attract attention from other potential clients? That's the definition of shilling Beau.

Point 2: So, your personal/client returns are very similar to what we see on the site? Is that what you're trying to say? Do your investors know exactly what you're doing with their (hopefully imaginary money)? You should know that misrepresenting an investment plan/track record is a huge no no... let's all hope your disclosure documents are up to par. Where exactly can we look at your personal/client returns? You say "your money", which one is it, clients or you?

Point 3: You are not trading a pairs system. Talk to anyone with some knowledge about the subject matter. You are misrepresenting your strategy.

And no, Beau, I'm not confusing confidence with arrogance. You are arrogant.

Legal action you say? Good luck with that. This is not slander. FYI, my wife is an attorney Beau, she has quite a bit of knowledge in Hedge Fund/Investment law. You are towing the line with your current approach.

Honestly, Beau I do wish you sucess. I don't want to see anyone fail. That said, you're going about this process immaturely, arrogantly, and ignorantly. That's why it concerns me. Should things go very wrong with what you're trying to do, you will be in a world of financial and legal hurt.

Mike

P.S. Yes the SPY system was mine. Its a very old system. Someone in a different forum said that intraday mechanical edges do not exist in the SPY/ES. 1++ year of track record proved them wrong, system cancelled, end of story, bet won. FWIW I felt *very* uncomfortable revealing trading signals in public and will never do it again.

 

[bwolinsky]

Quote from Mike805:

I apologize for saying you deleted posts. You did not. Here is the post I was refering to.

Quote from Beau from C2:

Quote from Mike805:

I

"Hi, all. I recently presented Pairs Trading QID QLD Scalper to a VC firm. They agreed to be a co-investor with one of my other clients in the amount of $5 million. (I didn't pitch them on buying the system).

C2 has been a great way to build a verifiable track record. The returns are very similar to what you see on the site, and I've noted some positive slippage between real life fills."

So, what exactly are you representing here, Beau? Did you recieve funding or not? If you did not recieve the funding, but, claim you did... should we assume this was an effort to build up your rep or attract attention from other potential clients? That's the definition of shilling Beau.

What's being represented is that a VC Firm issued a letter of interest to me requiring that they be a co-investor with one of my clients, and I believe it's pretty obvious that the funding request has yet to go through if you didn't see the last post from that link. I don't read that I closed the deal from that. Posting that a VC Firm was interested I don't take as attracting attention. If anything it most likely put prospective subscribers off, till I renewed my committment to C2 by starting Pairs Trading QID QLD 2.0. It just happened to be something I was proud of having succeeded at doing. Now I have to work on bringing the consortium together to close the deal, and that's the stage I left off on with the final post to that thread on 10/21/2009.

As I said, I'm still working to close the deal. That much money never moves very quickly.

Quote from Mike805:




Point 2: So, your personal/client returns are very similar to what we see on the site? Is that what you're trying to say? Do your investors know exactly what you're doing with their (hopefully imaginary money)? You should know that misrepresenting an investment plan/track record is a huge no no... let's all hope your disclosure documents are up to par. Where exactly can we look at your personal/client returns? You say "your money", which one is it, clients or you?

I can see there is some amibiguity and room for interpretation, but what I do with personal money, and what you see on C2 and Covestor are my own holdings. Client money is invested at Fidelity Investments through my third party asset manager, Envestnet Asset Management. You will not ever be able to verify those returns, because they are private investors. I attempted to report my 1 year client return as 18.98% to the S&P's 9.8% as of yesterday.

Currently clients are allocated 27% to International Bonds, 26% to International Developed Markets, 20% to Large Cap Value, 17% to Intermediate Bonds, 5% to commodities, and 6% to all other asset classes equally to large cap growth, large cap core, and other assets. These allocations for assets sum in the millions of dollars.

I think that's the limit of what Magna will allow me to say.

Quote from Mike805:



Point 3: You are not trading a pairs system. Talk to anyone with some knowledge about the subject matter. You are misrepresenting your strategy.

You are wrong here. Any model based on a ratio between securities is a pairs model, no matter which time frame it is in. Daily level pairs models are far more robust than intraday ones because the mean reversion portion is not instantly activated and allows deeper levels of extremum values. I do know what a pairs model is, and that's exactly what I'm trading.

Quote from Mike805:



And no, Beau, I'm not confusing confidence with arrogance. You are arrogant.

Yeah, you are. I can hammer away at people as much as I want if I see something that is inconsistent in their statements. If someone comes on here stating they have a system with no proof, I get on them to prove it till they do. Once I observe a system's results for a while if I notice it gets high, risk adjusted returns I'd probably copy it.

Quote from Mike805:




Honestly, Beau I do wish you sucess. I don't want to see anyone fail. That said, you're going about this process immaturely, arrogantly, and ignorantly. That's why it concerns me. Should things go very wrong with what you're trying to do, you will be in a world of financial and legal hurt.

Mike

At this point, any and all liability is covered currently under C2's TOS. I can do whatever I want with my money. I could play blackjack with it if I wanted to, and subscriptions on C2 go as far as being covered under the first amendment as a publisher of a newsletter essentially. That much I've looked into, and it's consistent with my interpretation of the Series 65 Uniform Investment Adviser Law Exam.

Quote from Mike805:


P.S. Yes the SPY system was mine. Its a very old system. Someone in a different forum said that intraday mechanical edges do not exist in the SPY/ES. 1++ year of track record proved them wrong, system cancelled, end of story, bet won. FWIW I felt *very* uncomfortable revealing trading signals in public and will never do it again.

Hmmm... you know it had very decent statistics. I'm sure you had subscribers. If you didn't, it was probably because you were too conservative. The last time I recall looking at that system was awhile ago; I think it was up 38% or so in pretty much the same time frame as the original PTQQS. We're still about even from the inception dates' net. I tried to locate it on the new C2 and could not, but it was a good system.

I don't exactly understand why you felt uncomfortable. The process of managing a trading system is no different than managing your own money, actively or passively. Generally, we only see actively managed systems on C2, though, but we all hope that whatever results show on C2 is what the vendor is actually doing. I had hoped by joining Covestor I would alleviate the notion that someone who spends his time developing systems 1)does have money, and 2) does utilize his research. To both of those is a yes, and you can observe every trade I've made on covestor has been nearly identical to C2, at least as it stands for QID and QLD trades, which I have traded exclusively since PTQQS was started on March 21st, 2007.

Cash Cow, I'm attempting to figure out a way to monetize its' performance without financial risk, and I don't know of any other site that would allow me to do that, but C2. Still a work in progress there.

I don't think I'm schilling at all. This thread is something maybe only a few people read regularly, and I get the occassional person upset by my methods of patience and slow trading.

<i>This thread is primarily <b>for me</b>, but I welcome all comments <b>except those for which the post is inherently offensive, and unconstructive, as well as irrelvant to the subject matter in the thread. </b> Magna knows which posters I have on ignore in this thread, and each and every time he deletes something, I'm oblivious, but I'm sure it's something I don't need to respond to. For the months I made money on C2, I didn't have financial worries at that point, and I'd like to get back there....soon. If that means discussing my research, so be it. Whether you'd like to pay attention or comment on the relevant parts of the thread is up to you. I do know what a pairs trade is, and it's quite naieve to think I don't. Pairs Trading is the only non-fundamentally accepted methodology in the CFA Curriculum, and is discussed in some length. Yes, I do know what it is.

With that, I have an update to make below. Please keep any of your future comments relevant. I'm completely within my first amendment rights to discuss my research, and it so happens to be available elsewhere on the internet for actual dissemination. Anybody who googles volatility overbought, oversold indicators, or a similar search, hits on my system, and I have had random e-mails sent to my address bwolinsky@trewfinance.com asking for my performance summaries that include all relevant trading statistics. Possibly more importantly, is that I provide a complete tradeslist, which I've found other vendors merely basing strategies on price action are loath to do so due to reverse engineering. Keith Feitschen made a lame attempt to reverse engineer my system by saying if the price closes more than 3% away then buy or sell short and use the closing price as a profit target. I guarantee that system lost substantial sums of money, but probably only play money.

With that, the next post has my current update.

 

[bwolinsky]

QLD Projection: 63.3234967912947 QLD Close: 53.6599998474121
QLD Projection: 54.9777100302956 QLD Close: 53.6599998474121
QLD Projection: 56.0530481974284 QLD Close: 53.6599998474121

Now, what needs to be understood here is that we are oversold. We have crossed under the volatility based oversold threshold. What keeps us from entering is that the volatility based values have yet to <i>normalize</i>. A process by which the volatility based thresholds must come back to <i>more normal levels that are dependent on the previous trades result, or whether we had a wash sale.</i>

If we did have a wash sale, the secondary levels would have kicked and had us buying on monday, but since we are not in a wash sale for qld, we have no trades until we cross back over the oversold threshold in what I call a normalization of the volatility based thresholds. It's what allows the market to decline tens of percent without fighting it. Couple that with a prediction of fair value, though pointing higher, without normalized volatility based values, no trades should be taken.

I anticipate another 2% rise in QLD is required to return to normalized values. Till then, I believe it is possible to see a little bit of a pullback. The reason I don't take my volatility based thresholds signals literally is because some consideration to both taxes and market conditions is required to have long term, higher risk-adjusted returns. Trending markets are my worst enemy. If a trend starts, we take a countertrend trade, we will lose, and that's been what you see on covestor, but masks the massive outperformance from not taking position as the market crashed more than 50% last November.

We'll see what happens.

 

[bwolinsky]

Quote from deaddog:

I checked out C2;
7 systems; only 3 show as profitable.
Of these:
the Superbands hasn't been active for a year.
the pair trading scalper has not been profitable in 2009 looks to be down about 10k
the other pair trading one has only one trade. Tough to rate a system with only one trade. However it was a good trade, but seeing as how all the other systems don't seem to be making any money there is room for doubt.

Hi, deaddog, I know it's hard to understand this, but it goes back to expectations. A professional doesn't see 3 of 7 are profitable, <b>a professional sees 6 out of 7 outperformed the S&P 500,</b> and <b> that is why I got the letter of interest in the first place.</b> All hedge funds and all mutual funds are correlated with the S&P 500, the extent to which measured by the correlation factor is also a measure of synchronicity with the benchmark. I always benchmark my systems to the S&P, and I suggest you do the same in the future. You should really accept that if the market goes down, you'll probably be down to, and if the market goes up, you'll probably be up. Once you do that, you see all you have to do to be as rich as Warren Buffett is beat the S&P by 10,000 basis points annually for 40 years. That's all. Compounded it amounts to a 22% annualized return, and, really no matter if the manager is up or down, if you still have him at this annualized rate, you probably should keep him. If you're down in a down year, that's fine, but in the case where you're up, and you put 50,000 basis points between you and the S&P, long term you will do a lot better than the market, and that's what I hope every investor understands about mutual funds, hedge funds, and other equity futures systems.

 

[deaddog]

Quote from bwolinsky:

Hi, deaddog, I know it's hard to understand this, but it goes back to expectations. A professional doesn't see 3 of 7 are profitable, <b>a professional sees 6 out of 7 outperformed the S&P 500,</b> and <b> that is why I got the letter of interest in the first place.</b> All hedge funds and all mutual funds are correlated with the S&P 500, the extent to which measured by the correlation factor is also a measure of synchronicity with the benchmark. I always benchmark my systems to the S&P, and I suggest you do the same in the future. You should really accept that if the market goes down, you'll probably be down to, and if the market goes up, you'll probably be up.

OK I checked your systems against the S&P.
Year to date 2009 you seem to be lagging.

I had assumed that since you were trading both ways with QLD long and QID short you intended your system to have positive results no matter which way the market trended. Why should I expect to be down in a down year? It almost seems that your best performance was during times the market was dropping.

Again it’s a confidence thing. How do you convince an investor to commit funds to a system that hasn’t beaten the benchmark for a year?

Why the S&P for a benchmark when you are trading a derivative of the Nasdaq?

 

[bwolinsky]

Quote from deaddog:

OK I checked your systems against the S&P.
Year to date 2009 you seem to be lagging.

I had assumed that since you were trading both ways with QLD long and QID short you intended your system to have positive results no matter which way the market trended. Why should I expect to be down in a down year? It almost seems that your best performance was during times the market was dropping.

Again it’s a confidence thing. How do you convince an investor to commit funds to a system that hasn’t beaten the benchmark for a year?

Why the S&P for a benchmark when you are trading a derivative of the Nasdaq?

The S&P is more representative of the market. And you could say the real derivative I should be benchmarking myself to is QLD, which is down 49.4% in the last two years, and drewdown about 75%.

 

[deaddog]

Quote from bwolinsky:

The S&P is more representative of the market. And you could say the real derivative I should be benchmarking myself to is QLD, which is down 49.4% in the last two years, and drewdown about 75%.

It's all in the time frame. In the past year QLD is up significantly.

Based on the last 2 or 3 years the market hasn’t done that well but with the benefit of hindsight a simple 10wk/30wk MA cross system would have given you results that outperform the S&P.

Most investors will ask, what have you done for me lately?

Back testing is fine but you have the opportunity to fit your outcome to whatever market you are trading. You have the luxury of being able to change criteria to achieve optimum results. Yes history repeats itself but not exactly. So basing a system on what should happen won’t always work. There is the off chance that the market will get stupid.