The ACD Method

DT3 said:
Want to get short but cant pull the trigger S&P bouncing again of the monthly A down, put/Call ratio at extreme levels, ISE under 50 print today and we're what 4% of all time highs?
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Glad i'm not the only one so confused. SPY is at -8 for me but the other high flying stocks are flat. ISEE just hit a swing low Friday. Lots of people are calling shorts on forums and in chatrooms though and I feel that too many people are already short.

I want to go short too but I think it's still premature...maybe another spike down in Aug...so July would probably be more right in timing.
 
Maverick74 said:
Markets follow a random walk with drift. In futures the drift equates to the shape of the forward curve. In cash markets the drift is equal to some interest rate factor.

I would ask traders these questions:

1. Are you currently bullish or bearish in any particular market right now? If they answer, I don't bother with the rest of the questions.

2. How do you price risk?

3. Define opportunity cost as it pertains to trading.

4. If a trader is right 100% of the time on his market calls, can he have 100% losing trades any why? What is the mathematical term that describes this phenomenon.

5. You are given a choice between buying two assets. Asset A you expect to return 7% over the next year (avg return of market). Asset B you expect to have a random return. Both assets are highly correlated to the sp 500. You have to hold both assets for one year. Asset B allows you the opportunity to time your sale. Which asset has the higher expected return mathematically? Which asset would you buy and why?
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So what happened with this quiz? Like two people took it?
 
He's been saying this for about a year now. I'm sure he's short in his main fund already might just be trying to get more funds to add to his position.
 
"
I would ask traders these questions:

1. Are you currently bullish or bearish in any particular market right now? If they answer, I don't bother with the rest of the questions."

Mav, what's wrong with being bullish or bearish on a market? Anytime we place a trade we are taking a position if we think prices will go up we're bullish if we thing they will go down we're bearish. I think the key is not to allow the position you have alter your analysis of the market.
 
I'll take a shot right.

1. Are you currently bullish or bearish in any particular market right now? If they answer, I don't bother with the rest of the questions.

2. How do you price risk?

3. Define opportunity cost as it pertains to trading.

4. If a trader is right 100% of the time on his market calls, can he have 100% losing trades any why? What is the mathematical term that describes this phenomenon.

5. You are given a choice between buying two assets. Asset A you expect to return 7% over the next year (avg return of market). Asset B you expect to have a random return. Both assets are highly correlated to the sp 500. You have to hold both assets for one year. Asset B allows you the opportunity to time your sale. Which asset has the higher expected return mathematically? Which asset would you buy and why?

1. Neither right now but that's just because I'm confused lol

2. Risk free return that treasuries give.

3. In trading we are always making decisions on which trades to put on if we put on a low probability trade it will impact our future high probability trade.

4. Yes if gets stopped out before the market moves in his direction. Not sure what term this is.

5. Don't know but my gut is saying asset B
 
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