Global Macro Trading Journal

One of the rules might be "buy the options going out 3-4 weeks". I tend to be early by a few days, maybe a week, but rarely more than that (unless I'm wrong). The subsequent move should last 1-2 weeks. So 3-4 weeks will even give me a big of extra margin to capture the move I want. As for strikes, perhaps I should eliminate all strikes without significant open interest/volume. That will make it easier to choose. After that, then I probably just need to buy several different strikes (i think they call it a put ladder) to, again, make it easier. Pros might have better strategies but at this point, I just want not to miss moves like this again!
I welcome any tips on options trading
 
Brazil president elect Bolsonaro is building a dream team for his cabinet. Guedes (an excellent economist, with a PHD from Chicago university) as finance minister, judge Moro for the ministry of Justice. Moro is the judge who was responsible for a number of high profile convictions of corruption, he widely admired for this brave work, Brazil had a long history of inpunity when it came to crimes of the rich and powerful. Bolsonaro is also very committed to pension reform and improving the country fiscally. If Bolsonaro keeps this up, another 40-80% pop in EWZ in the coming years, wouldn't surprise me one bit
 
Daal said:
So what we have here is this, the main causes of a bear market tends to be:
-Recession
-Overbought markets
-Something else

The first two seem to be able to be disregarded, recession doesnt seem to be on the horizon and the market is not overbought as measured by my capital growth indicator (or by most other indicators for that matter). The risk of a bear appears to be tied to the chance of a bear market in bonds leading to higher discount rates which stock investors would react to, that would be that "something else". For that reason I plan to purchase some UST bond put options as a hedge against my stock portfolio (I already have some that I purchased a while back but its a quite small position). Right now, that seems about the only thing that could hold back stocks
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If you look at US large cap indices back to 1982 - 36 years - there were only 2 periods for a total of maybe 2 years where staying long was clearly the wrong decision, and the market wasn't already in a clear bear market downtrend. These would of course be right before, and in the initial stages of the 2000 bubble pop and the GFC.

1987 was dramatic but SPX finished higher on the year, you basically had a 10-month setback and then it was over. In 1990 we actually had a recession, but again the market declined for a few months then started going right back up. Not unlike what happened in 2015-2016 (technically no recession but there was certainly a business cycle swing in the commodity sector).

So, the main threats to look out for are an obvious speculative bubble that pops, a financial panic, a large rise in interest rates, or a secular shift in the underlying earnings trend. Rising rates are the only one of these that seems likely at the moment so I think your idea of trying to hedge against this is spot on.
 
Daal said:
Brazil president elect Bolsonaro is building a dream team for his cabinet. Guedes (an excellent economist, with a PHD from Chicago university) as finance minister, judge Moro for the ministry of Justice. Moro is the judge who was responsible for a number of high profile convictions of corruption, he widely admired for this brave work, Brazil had a long history of inpunity when it came to crimes of the rich and powerful. Bolsonaro is also very committed to pension reform and improving the country fiscally. If Bolsonaro keeps this up, another 40-80% pop in EWZ in the coming years, wouldn't surprise me one bit
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From the English language media, all we "know" about Bolsonaro is that he's a far-right nutjob who hates women, blacks, and gays, wants to implement a dictatorship, and let "death squads" roam the streets gunning people down at will.

And yet he won by a significantly greater margin than Trump did up here, so there's obviously more to the story. Unfortunately the US/UK media these days are just propaganda outlets for one side or the other, finding honest information (especially about foreign events) has become nearly impossible.
 
Specterx said:
From the English language media, all we "know" about Bolsonaro is that he's a far-right nutjob who hates women, blacks, and gays, wants to implement a dictatorship, and let "death squads" roam the streets gunning people down at will.

And yet he won by a significantly greater margin than Trump did up here, so there's obviously more to the story. Unfortunately the US/UK media these days are just propaganda outlets for one side or the other, finding honest information (especially about foreign events) has become nearly impossible.
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Yes its ridiculous what the media does. I read a theory that this had to do with the rise of Google and Facebook and them eating the old's media lunch in advertising revenues. Old media was starved of cash, as a result fake news was born, as was throwing away all the ethical considerations when it comes to reporting. Bias is the MO now. Bolsonaro got some issues with his mouth but from his actions (and I believe actions speak louder than words) appointing Moro shows that his heart is in the right place. Moro wouldnt stand for bs if he tried
 
Daal said:
Buffett bought BRK shares at ~$205 (my estimate) according to his interviews and PRs after they announced the new buyback program. He has ~$80B in cash to buyback stock. The stock right now is at $206, so its an interesting situation. Of course, his estimate of intrinsic value can be revised down if things change (like stocks declining) but given that the bulk of the worth is in private business which are very unlikely to be marked down, the stock right now is an interesting opportunity
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Berkshire Hathaway repurchased $928M in stock during Q3: WSJ
  • Nov. 3, 2018 at 8:48 a.m. ET
  • by Tonya Garcia
Buffett buying back shares as fast as he can (without affecting the price a lot), he is effectively saying the stock is undervalued
 
Well, if you helps you Daal re: pot stocks I called the exact Sept top in NDX at short NQ@7700 and yet I'm down over the last month. Don't beat yourself up over it.

In fact, I'm starting to think people who have been around in the mkts a long time should be looking at longer time frames and doing something else in the meantime(work, business, self improvement, etc etc). The ROI vs opp cost of day trading just doesn't make sense as one gets older.

Or maybe we all just need to take shots of testosterone.
 
tsznecki said:
In fact, I'm starting to think people who have been around in the mkts a long time should be looking at longer time frames and doing something else in the meantime(work, business, self improvement, etc etc). The ROI vs opp cost of day trading just doesn't make sense as one gets older.
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I suppose this would depend on what type of ROI one is referring to. In terms of $ ROI, its hard to beat short-term trading. Most excellent traders I know are 7 figure traders (a year), that's hard to generate in a job, maybe its possible in a bussiness but its going to take a humongous amount of work, especially in this era of globalization where every country has to outcompete the other one. I'm not a 7 figure trader myself but its a goal that I could possibly achieve one day specially if I really devoted a lot of time to it and did some coaching with top traders

But if the ROI is in terms of life satisfaction, than I agree completly. Its not the most fulfilling profession, 'to trade' doesnt seem like what the goal of a human being should be. I think about this a lot, financially I'm doing pretty well but I dont have the level of life satisfaction that I want, it doesn't help that I also have health issues to boot. I plan to do some charity work in Africa soon so I explore other activities to open my mind. I think my ultimate goal will be to become a "2 hour trader", where I devote 30 minutes before the open and 1:30 after the open to trade and generate income and the rest of the time I spent in more fulfilling activities like family and helping others
 
Here is an interesting fact, since 1926 to 2016 the maximum real drawdown of many different asset classes in the US were the following:

US stocks -76% (1929-1932)
US 10y bonds -57.55%(1941-1981)
US T-Bills -48% (1933-1951)
Gold -83% (1980-2001)

However when you combine them in a way that makes sense (historically, looking at different countries) the max drawdown drops off a cliff to only -25% real (30% stocks, 55% bonds, 15% gold). There is also an improvement in several risk adjusted metrics like Sortinos, MAR ratio, CAGR/MedianDrawdown.
I bring this up because so often I see short-term daytraders keep all their money in cash and think 'I need to have no risk with my assets because I already take so much risk in my trading, I like to sleep well at night').
However, in my view, that stability is just an illusion, it happens because the trader is only thinking in a day to day, month to month basis. If you stretch out time (looking at the experience of several countries) strictly fixed income based portfolios are suicide.

Its a funny thing this investing world, but by buying stocks, things like gold and having a certain amount of bonds, risk in the portfolio actually goes DOWN instead of up. Its counterintuitive that buying stocks or gold could decrease risk, but the data shows that quite clearly
 
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