How to Kill Bulls: Watch Me Do it in Real-time

[riskfreetrading]

Quote from commiebat:

... You'd be out buying islands. Like Manhattan.

I will take that as a good wish.

The method I used here was developed only few months ago, so I need to give it time before any eventual scaling up. In addition, there is no theoretical guarantee that it does not fail (but there is a justification behind the method) one still has to assume in trading it that it would make mistakes, and use proper money management.

I however understand that if this continues, it would be just a matter of time to build a sizeable account. I intend on that of course, and if one starts with a larger capital base one gets there faster. Not everyone inherits wealth, and I wish only to make it, not to inherit it anyway, so it is fine with me to start at a lower base and enjoy the ride.

The reason I posted it here is to have feedback and reactions, to share its market calls (although I do not think that people have or should have followed it) and to test the hypothesis of top/bottom picking. In addition, I think posting helped me in better applying it as sometimes I have second guessed it in trying to get in early in order not to miss the entry.

I would give you credit for a good observation you made on an earlier post (assuming that it is what you meant). You remarked that I get in when bulls are strong. That is true, but note that the top by its nature is only reached by going against the trend (but getting at the end), or if the market is range bound and makes a headfake.

The method also needs a good amount of following and analysis work, so it is not just watching one thing to get in. So for those who do not get at the top, do not worry there is plenty of room to make money as any move takes time to play out and the market bus can take you on multiple stops on its route.

 

[commiebat]

Quote from riskfreetrading:

The method I used here was developed only few months ago, so I need to give it time before any eventual scaling up.

For someone who's afraid to scale up his system (to real money, presumably), you sure do crow about it pretty loudly.

In case you take that as another "good wish", what I'm trying to say is that you should stop bragging until you're willing to put your money where your mouth is.

I however understand that if this continues, it would be just a matter of time to build a sizeable account. I intend on that of course, and if one starts with a larger capital base one gets there faster. Not everyone inherits wealth, and I wish only to make it, not to inherit it anyway, so it is fine with me to start at a lower base and enjoy the ride.

That's a pathetic excuse. If you're as good as you say, and you've been trading your system for a few months, you should have turned even a minimally funded account into untold millions by now. Which kinda suggests you're not that good.

I would give you credit for a good observation you made on an earlier post (assuming that it is what you meant). You remarked that I get in when bulls are strong.

That's not what I said at all. I don't think English is your first language. Humour is always the hardest aspect of a foreign language to master.

The method also needs a good amount of following and analysis work, so it is not just watching one thing to get in. So for those who do not get at the top, do not worry there is plenty of room to make money as any move takes time to play out and the market bus can take you on multiple stops on its route.

Translation: I don't bet on my own system, but there's plenty of time for my 40 million mythical fans to bet on my system.

 

[riskfreetrading]

I am sorry to tell you that, from reading your posts, I, regrettably, find that you are the most stupid individual I have ever interacted with in my entire life. Therefore I am putting you on the famous ignore list.

Readers:

Be careful not to have your mind infected with stupidity. Always make sure you listen to facts. The above paparazzy is confused, and if he were to try to think, I would not be surprised if he would to lose his consciousness.

Everything (or almost) in what he wrote above is wrong. Here is just one example: He confuses courage with reliance on certainty in results established using a rigorous mathematical analysis. If an analysis is statistical/probabilitic, even an almost-sure result (which means in layman's terms that is not sure a 100% but the probability of it to be true is 1 at the limit). Therefore, even under the last context, one should consider money management, even if one may not likely need it in practice to the extent it is planned for.

Your priority should be liquidy and safety of rate of return, before seeking a higher rate of return. Put the last three terms in your head deep enough: Safety (positive rate of return), Liquidity, and then Rate of return.

By the way, I noticed that he does not understand leverage (not what it means in words, but how to think about it and the implications of those thoughts)

 

[xflat2186]

Same garbage as always. If you dont agree with risky then you're stupid, if you dont agree with risky then you're on the wrong side of the market, if you dont agree with risky then you lie.

risky, you need some new material. The entire board is onto your BS.

 

[commiebat]

Quote from riskfreetrading:

Your priority should be liquidy and safety of rate of return, before seeking a higher rate of return. Put the last three terms in your head deep enough: Safety (positive rate of return), Liquidity, and then Rate of return.

Your priority should be liquidity and safety of rate of return, before bragging about it on a message board under the name "riskfreetrading".

Why hard-sell something you wouldn't buy?

 

[Gringinho]

Butch,
does this mean that we should all be long USD, since you can always butcher EURUSD bulls? I thought the USD was only paper money supported by an illusion that if everyone poor their savings into US (stock, derivatives, real-estate ...) markets we will all be saved ...

 

[riskfreetrading]

Quote from Gringinho:

Butch,
does this mean that we should all be long USD, since you can always butcher EURUSD bulls? I thought the USD was only paper money supported by an illusion that if everyone poor their savings into US (stock, derivatives, real-estate ...) markets we will all be saved ...

I think that thinking has run its course. The market looks in the future, and if there is a new major thinking it start to price it in as people understand it along the way. I think we are at the moment of shift, and you would need a new thinking/vision.

I wrote the text below 3 weeks ago. It is being confirmed by market action. Here is the link and the text:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=126655&highlight=dollar+up+market+down

Quote from riskfreetrading:

Here is what I think the message of the markets is/going to be:

1. Stock market down because of recession/earnings. Fed does not have much room to cut more.
2. Other countries will cut rates to fight spreading recession, causing interest rate differential between dollar world and non-dollar world to shrink. This is bullish for the dollar (similar to dividend increase in stocks).
3. Point 2. will lead to further strength of the dollar because of momentum in currency pairs created by dollar bulls (change of trend in favor of the dollar), and money running to safety to USA and buying of assets/bonds.
4. Points 1. to 2. will cause commodities to be less in demand, and therefore a reduction in their perceived price will follow. This will translate to weaking in futures prices, helped with a strengthning dollar. Once the down trend is established, the bears (and their aunts) will take care of the bear trend in commodities.

The first wave: dollar up, and market down. Commodities afterwards with possible sharp corrections as a beginning to disorient the bulls before the kill.

Long dollar/short foreign currencies, short US equities and international, and start shorting commodities once a top is comfirmed, etc.

Your thoughts folks on the message, and the best vehicles to play this game.

PS: PM me if you have questions/suggestions/etc that cannot be discussed here. I understand that not all thoughts can be written down here.

 

[Gringinho]

Quote from riskfreetrading:

I wrote the text below 3 weeks ago. It is being confirmed by market action. Here is the link and the text:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=126655&highlight=dollar+up+market+down

I see ...

With a very US-centric viewpoint you're saying that other countries who were in an economic slump in the 90s and into the y2k, and who are now enjoying some rise in their economies will start fearing recession. While the US who was on top in the 90s and start of y2k, will soon again reign supreme.

Also, it is interesting that you think commodities will come flapping down - which I guess implies that you don't see any further growth or pressure from China, India and the new EU-states with growth close to or over double digits.

I wonder if the old haydays of the US will return - where corrupt regimes happily exported their natural resources to a growth-stimmed US for next to nothing. I beg to differ, actually ...

I think that we are seeing true values of commodities getting closer, and the continued shift in fortunes will be the norm with more weight given to international trade organizations and agreements. We will see more cemented trading blocs, where tougher negotiations will have to be made. And the US with their thinly stretched military will not be able to meddle so much by supporting groups for unrest in unstable countries. Well, that's my €.02 anyways.

 

[riskfreetrading]

Quote from Gringinho:

I see ...

With a very US-centric viewpoint you're saying that other countries who were in an economic slump in the 90s and into the y2k, and who are now enjoying some rise in their economies will start fearing recession. While the US who was on top in the 90s and start of y2k, will soon again reign supreme.

Also, it is interesting that you think commodities will come flapping down - which I guess implies that you don't see any further growth or pressure from China, India and the new EU-states with growth close to or over double digits.

I wonder if the old haydays of the US will return - where corrupt regimes happily exported their natural resources to a growth-stimmed US for next to nothing. I beg to differ, actually ...

I think that we are seeing true values of commodities getting closer, and the continued shift in fortunes will be the norm with more weight given to international trade organizations and agreements. We will see more cemented trading blocs, where tougher negotiations will have to be made. And the US with their thinly stretched military will not be able to meddle so much by supporting groups for unrest in unstable countries. Well, that's my €.02 anyways.

That is good analysis, and I think I agree with most of it. The only nuance I would like to add/highlight is that when I indicate a downturn in commodities I meant in their prices in the futures markets not in the actual demand in the economic sense.

I am of the opinion that markets not only discover value, but they actual impact the future value in the sense of changing the future-economic growth rather than just pricing it. There are re-inforcing cycles that take place once a trend is set in that are more of psychology of traders. In other words, markets can impact the economy in addition to the economy impacting the markets. Since trends in markets are emotional and heavy, they can change the course of economies for sometime.

In addition, the view I have is during the recession period only (which I think would be worldwide). No matter what people say, the US is still powerful in three dimensions: innnovation, capital markets, and last (which people may not pay enough attention to) agriculture. A hungry world will need the US.

 

[Gringinho]

Well, it is a global economy after all, and the US will never be sidelined by any means. But a return for the USD is something I strongly doubt. There are some fundamental changes going on, and the US is not at the center of these - in a positive way. With the trade deficits and fiscal trouble - the US is gaining debt very quickly - and it's no joke either. Not to mention all the social benefits, welfare and retirement funds that have almost crumpled. This credit and housing crisis is not helping any either. Imagine 1-2 horrible hurricane seasons - and we will see the re-insurers scramble like there was no tomorrow. Things are dicey nowadays. How do you see markets changing this any day soon? IIRC the US economy is driven roughly 80% by consumers, while it's something like 67% in Japan. With the pain felt in normal consumers' pockets because of higher prices for energy and previously cheap goods because of strong currency and/or very low wages in other countries - I do think that a change in how strong the US consumer can munch up riches imported to the country is on the way.

The trend with central banks going for a basket for their national reserves is just the beginning. Taiwan now looking for closer ties to China, as well as other asian countries ... well, it does spell it out rather thick as nay-sayers get closer to the edge.

North america is a rather powerful trading bloc, and I think they'll just have to revisit that as other regions start protecting themselves more and more. Go NAFTA!