Kudos to MMs

Quote from Ghost of Cutten:

Here are some of the classic trading mistakes that nitro made on this thread:

1. He assumed he would be right on the trade. He had no plan for dealing with the trade being a major loser.

2. He took too much risk.

3. He had no loss control method - he had no plan for keeping them to an acceptable level, or altering his position once it was apparent that it was wrong.

4. He assumed that a model with a good track record cannot suddenly stop working, and had not considered how to deal with that (inevitable) eventuality.

5. He used a mean-reversion method in a trending market.

6. He became emotional about the trade, and emotionally attached to his model. He was more concerned with proving his theory right, than in making money or following sound trading principles.

7. He blithely dismissed the concerns of multiple experienced traders who had no vested interest in whether his trade was profitable or not.

Hopefully those who read this thread can gain some value from these mistakes, and thus be less likely to repeat them in future. Maybe that group can include nitro himself, although I suspect account blowup may be required before he snaps out of his mental fog and realises the necessity of changing losing habits.
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8. He makes no attempt to analyse his performance to see what mistakes were made, or how to change his method to eliminate those mistakes.

9. He only wants to deal with easy, positive things. His response to problems, or things not going as planned, is total denial. For example, he ignores almost all posts made to him that contain valid and constructive criticism, he ignores suggestions to make his trading less disastrously unprofitable, he spends almost no time analysing his past decisions.

10. He does not actually want to make money in the markets. He places more value on not having to admit he was totally wrong, than in avoiding devastating account losses ($100k to date) and becoming someone who can trade for a living.

Since nitro rarely responds to my posts (he hates having to confront failure, address valid criticism, or deal with negativity of any kind), it is likely he won't reply to this one either. However, some other people reading this thread may learn from his errors, and improve their own trading by using him as an example of what not to do.
 
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Sonnenschein–Mantel&#150;Debreu theorem

"...The theorem's main implications are that, with many interdependent markets within the economy, there might not exist a unique equilibrium point."

http://en.wikipedia.org/wiki/Sonnenschein–Mantel–Debreu_theorem

I am aware of this, and clearly so is the FED. The idea is that since there is not one equibrium point (EMH is false), society must choose what equilibrium point to be in. Since the choice can no longer be made by market forces (the invisible hand) because supply and demand are balanced in each of the many possible equilibria, how does society choose which equilibria to be in? First we must consider whether a system is path dependent or not - how a system evolves from one configuration to another. My claim is that economic systems are path dependent, and the obvious proof is in options prices contain memory (otherwise there would be no skew.)

The current FED believes that cheap $-high employment-low inflation equilibria is a perfectly sensible one, at least compared to expensive $-low employment-low inflation equilibria. But my contention is that some points in the economic landscape are more unstable than others, and my claim is that this path taken from the equilibrium point of 2008/2009 to today was probably necessary, but continued (human forced) agency towards greater debt and cheap money will lead to huge deflationary pressures, leading to higher and higher probabilities of a depression. It is a similar condition (categorically) to the weather being forced into different equilibria by human-forced global warming. The FED is CO2.

The one thing that the FED is counting on is the higher proportion of consumers and emerging economies (companies making goods), and therefore the cheaper $ shouldn't be measured locally, but as a bigger pool of interlocked economies (more plants and trees making Oxygen). All sound and good, but what happens if the world slows down? Is all that we have done is lengthen the economic cycles between equilibria? Will the downturn be equally vicious?

Staying short 5 units.
 
Quote from nitro:

Sonnenschein–Mantel&#150;Debreu theorem

"...The theorem's main implications are that, with many interdependent markets within the economy, there might not exist a unique equilibrium point."

http://en.wikipedia.org/wiki/Sonnenschein–Mantel–Debreu_theorem

I am aware of this, and clearly so is the FED. The idea is that since there is not one equibrium point (EMH is false), society must choose what equilibrium point to be in. Since the choice can no longer be made by market forces (the invisible hand) because supply and demand are balanced in each of the many possible equilibria, how does society choose which equilibria to be in? First we must consider whether a system is path dependent or not - how a system evolves from one configuration to another. My claim is that economic systems are path dependent, and the obvious proof is in options prices contain memory (otherwise there would be no skew.)

The current FED believes that cheap $-high employment-low inflation equilibria is a perfectly sensible one, at least compared to expensive $-low employment-low inflation equilibria. But my contention is that some points in the economic landscape are more unstable than others, and my claim is that this path taken from the equilibrium point of 2008/2009 to today was probably necessary, but continued (human forced) agency towards greater debt and cheap money will lead to huge deflationary pressures, leading to higher and higher probabilities of a depression. It is a similar condition (categorically) to the weather being forced into different equilibria by human-forced global warming. The FED is CO2.

The one thing that the FED is counting on is the higher proportion of consumers and emerging economies (companies making goods), and therefore the cheaper $ shouldn't be measured locally, but as a bigger pool of interlocked economies (more plants and trees making Oxygen). All sound and good, but what happens if the world slows down? Is all that we have done is lengthen the economic cycles between equilibria? Will the downturn be equally vicious?

Staying short 5 units.
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Staying short 5 units?? Forever?? Expecting some TARP money to cover margin calls?
 
Deflationary pressures show just how bad demand is:

http://www.bloomberg.com/news/2013-...r-low-belies-u-s-demand-strength-economy.html

What happens to the US economy when people stop wanting and buying crap?

The younger generation reminds me of a hybrid hippie - some sort of free spirit with a religious bent. It will take a generation to flush out all of this insanity, and the new generation is revolting against mindless consumerism. Watch television, cable or free, and it is a commercial 50% of the time.

Television, in its current form, is dead. The second NetFlix pushes an ad on me, it is gone from my household. Google might survive, but advertisement to sell shit is going to take a massive hit in the next 20 years.
 
Quote from nitro:

Deflationary pressures show just how bad demand is:

http://www.bloomberg.com/news/2013-...r-low-belies-u-s-demand-strength-economy.html

What happens to the US economy when people stop wanting and buying crap?

The younger generation reminds me of a hybrid hippie - some sort of free spirit with a religious bent. It will take a generation to flush out all of this insanity, and the new generation is revolting against mindless consumerism. Watch television, cable or free, and it is a commercial 50% of the time.

Television, in its current form, is dead. The second NetFlix pushes an ad on me, it is gone from my household. Google might survive, but advertisement to sell shit is going to take a massive hit in the next 20 years.
More...

You wouldn't perhaps be a close relative of Ted Kaczynski??
 
No changes. Staying short all units.

First target 1650-1642. Then minor support 1620. Then minor 1600. Then big Target 1572 - 1575. Then 1542. Then Major target 1520. At this point reality sets in. Then 1472-1480. Then?

There. Enough targets.

EURO strengthening against the dollar is short lived. How long can their shit work without our shit working? And if this turns into a panic, watch out.

EURO target year end: 1.24 ish.
 
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