Trading Wisdom for Aspiring Hedge Fund Managers

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Quote from cdcaveman:

The Big Short was a good book to.. .... Going short during blow off tops.. when everyone has a hard on for a stock.. IE netflix cmg.. green mountain... not apple hahah get freight trained being a contrarian on that one..
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Yup, that was a great read. Entertaining, descriptive, and worth it for the Michael Burry profile alone.

Although the Cornwall Capital guys got seriously short shrift in that book. Lewis makes them sound like a couple of lucky hayseeds, when they are actually razor sharp. (Schwager interviews the Cornwall founder in HFMW.)
 
Quote from cdcaveman:

you love talking in CODE Jacky... forget putting things in laymens terms where a wider range of people could consider what your saying.. i've got a hex editor i think i'm going to funnel your posts into and see if they make anymore sense..
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Reread the one pager on PVT.

At the top of the columns you see the multiplier.

The rules are simple and color coded to boot.

CCC means Congestion Convegence and Centering.

the invention of scoring to define trading a cycle just involves turning a binary number into a decimal digit.

The illustration of the cycle where the 8 scores are noted makes it possible for a beginner to with one mouse click of a sorting system to have his hot list and then use the one pager.

the one pager is based upon the 65 day average which is part of any fundamental description of any high Beta stock.
the record of a beginner was posted. his first three months began with 27K he did 62 trades and 60 were profitable. his annualized ROI was 150K. A month later it was 250K

Laymen are what they are. this person could read and write and follow directions and make decisions.

Get a larger spoon for your spoon feeding.
 
Quote from Ghost of Cutten:

As a sole trader the numbers are simple:

CAGR, adjusted by the tax rate, times your capital base, minus your annual spending = your annual increase (or decrease) in capital.

E.g. 30% per annum, 1/3 tax rate brings it down to 20% per annum. If your capital base is 300k and your living expenses are >60k a year, you will eventually go broke despite having an excellent annual return.

Assuming any good pro trader can make 15% per annum minimum, then if your expenses are 60k (entry level middle class) you need a capital base of 600k just to break even each year, and more like 1 million to compound wealth meaningfully. At 30% you need 300k/500k.

Short answer - you must either live on tinned food in a bedsit for a few years, have 500k-1mill capital, or be able to make 50%+ per annum, or move to a tax haven, in order to make it as a sole trader. If you can't do that, then you should go work for a trading firm, or raise investor capital.
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Lol or you could live on alot less than >60k a year.....
 
Quote from cdcaveman:

The Big Short was a good book to.. .... Going short during blow off tops.. when everyone has a hard on for a stock.. IE netflix cmg.. green mountain... not apple hahah get freight trained being a contrarian on that one..
More...


If you like humor, read a writer's inept description of some people who can't fight their way out of a paper bag. The book is: The Predictors. Bass is the author.

ove 2/3 of the way through the book, the team of losers goes to the market to place their experimental order for the day. Everyone else knows their routine and so they take the predictor's pants off every day.

What is neat is reading how they come back to their work room and discuss something they just learned. The subject was BBid/BAsk; they did not know before that it existed.

All these guys formerly worked at hedgefunds. Of cource, Bass is just narrating the lost cause of Quants.

this thead is entitled...blah blah...in this thread the OP is calling me out and describing my behavior by which he is slightly amused.

I commented on 6 and my comment included what appeared in 7, 8, and 9, blah.... this set of "trading Wisdom" is par and it is what the finacial industry is as well.

frontrunning the industry and its corporate structures is a ball.

My role is speculator who uses TA and who frontruns the HERD. I am a systemmic trader who's system has no noise, no anomalies and no flaws......

So I have a vocabulary and a language I use. In programming terms it is a RDBMS and the coding language is SQL or Haskell could be used. Anyone can look At my algorithm PEP and its three applications: PVT, SCT and SSR. There are one pagers available.

Scoring is easy and it works with a Universe from EPS and RS. The one pager for PVT is codable in about 20 minutes.

I am not as described here by the OP.

Look at the persons I suggested he quote earlier. That's not going to happen either.

I am used to such characterizations of me. as a trader for 54 years, I have been looked at for a long time and by some fairly significant people. I have not worked for anyone since my first job; some excepions like EOP did happen though.

Every day you are affected three ways by my contributions to your lives. Get used to it; it happened and I did my job.
 
Quote from jack hershey:


the one pager is based upon the 65 day average which is part of any fundamental description of any high Beta stock.
the record of a beginner was posted. his first three months began with 27K he did 62 trades and 60 were profitable. his annualized ROI was 150K. A month later it was 250K

Laymen are what they are. this person could read and write and follow directions and make decisions.
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You're full of shit.

Your statement implies a 96% win rate and +900% returns. That's ridiculous.

1) No human traders have that kind of hit rate.

Stevie Cohen, who put together one of the best trading shops of all time in SAC capital, once said his best trader had a hit rate of 65%.

Marty Schwartz, arguably one of the greatest daytraders ever, once said he more or less scrapped back and forth 200 trading days a year and made his big gains on the other 50 (i.e. 1 trading day out of 5).

Ken Grant, who served as risk manager to many of the top hedge funds in the world, said that the majority of top traders he has witnessed consistently displayed a 90/10 return profile, where 90% of their profits came from 10% of their trades.

Peter Brandt, who booked 41% CAGR over 30 years, did so with a less than 40% hit rate.

Multiple top global macro traders (running hundreds of millions to billions) have professed hit rates in the neighborhood of 50%.

In otherwords, across the top strata of top traders at the top of their game -- guys who have actually made hundreds of millions to billions in the markets -- not one of them has a 95% hit rate or anywhere near it. And yet your "beginner" got it by following your simple instructions. Right.

2) High frequency trading programs don't have that kind of hit rate either (let alone run rate).

The aim of HFT programs is to be like the house in blackjack, where a small edge, as little as a few percentage points, is exploited over thousands of occurrences per day to create near-statistical certainty of profit via the law of large numbers. This can done (and is done) with hit rates just north of 50%. Casinos make millions on blackjack every night with merely a 2% edge.

Furthermore, simple application of game theory dictates that a rule-based strategy with a hit rate of 96% simply could not exist in a competitive environment for anything more than a short period of time. Such an anomaly, as soon as discovered by other trading shops, would soon be competed away.

Anyone who was able to win 96% of the time, at a 900% run rate, for any meaningful length of time, would soon be richer than Bill Gates. And you're saying a newbie did it just by following your instructions.

3) High hit rate trading methodologies tend to require EXTREMELY high turnover to generate their returns, because average profitability per trade has to be low.

The trades that make 10R, or 50R, or 500R, are not high hit rate trades. They are more like grand-slam fastballs down the middle. Think George Soros and the British Pound in 1992, or Warren Buffett buying the Washington Post at near bankruptcy lows and holding it for decades.

But the above type trades just don't come along very often. And they certainly don't fit the context of a day or swing trading methodology.

In reality, a highly profitable day or swing trading methodology is going to have little bites, over and over, spread out over a large volume of trades.

Is it possible for a human trader to make 900% a year without undue risk, and to do so without hitting a macro or value investing home run? Yes. But such a trader would likely have to be a prop trader of some kind, making dozens of trades per day, if not hundreds, to compound his small edge rapidly.

Thus, what you made up doesn't even fit the structure of market reality. 62 trades over three months is not a realistic profile for 900% returns. The only way you get those kind of returns is by one-off swinging for the macro fences - and as already established, that is not a 96% hit rate business - or utilizing an extremely high turnover strategy that makes hundreds or even thousands of trades in a month.

4) If you had the holy grail, it would be worth billions of dollars.

A strategy that can win +95% of the time is a form of holy grail. A strategy that can consistently generate 900% annualized returns without insane risks is another form of holy grail. Put the two together and you have a sort of super holy grail where you could turn $50,000 into $1 billion in the matter of a few YEARS.

You might as well come on here and tell people you sneeze bullets and fart laughing gas, or that you're the trading fairy godmother who waves her magic wand and fulfills newbie traders' wildest dreams. The claims you make are so far beyond ridiculous they aren't credible for even a second. It's like one of those hoax scientists claiming they have found cold fusion or the means to create perpetual energy, without even understanding the fucking physics well enough to at least come up with a plausible bullshit story.
 
Quote from jack hershey:

If you like humor, read a writer's inept description of some people who can't fight their way out of a paper bag. The book is: The Predictors. Bass is the author.

ove 2/3 of the way through the book, the team of losers goes to the market to place their experimental order for the day. Everyone else knows their routine and so they take the predictor's pants off every day.

What is neat is reading how they come back to their work room and discuss something they just learned. The subject was BBid/BAsk; they did not know before that it existed.

All these guys formerly worked at hedgefunds. Of cource, Bass is just narrating the lost cause of Quants.
More...

FALSE.

I read the Predictors and wrote an Amazon review of the book (which is still posted) circa 5 years ago.

You said they "formerly worked at hedgefunds."

No they didn't, you jackass, that's why they made the mistake they did in respect to entering their orders at the same time each day. And they didn't make the mistake forever, it was something they caught and moved on from as soon as they realized what was happening in the pits.

Prediction Company LLC was led by Doyne Farmer, a physicist and chaos theoretician associated with the Santa Fe Institute.

Again, the whole reason they made the elementary mistake with orders in the pits - later corrected - is because they were NOT traders or hedge fund guys. They were scientists, hacking and theorizing their way forward.

And they were hardly losers. Prediction Company LLC was eventually bought by an investment bank for a large sum, most likely making the founders - who were never "former hedgefund guys" - quite wealthy.

As for "the lost cause of quants:" Again what... the fuck... are you talking about. Guys like Cliff Asness, Peter Muller, Blair Hull, Jim Simons, David Shaw, Edward Thorp and others are worth HUNDREDS OF MILLIONS TO BILLIONS.

"The quants" are doing just fine. There are quants who are HUGELY successful, in track record, theoretical advancement, profits gained, everything. So why the HELL would you knock them indiscriminately?

I am no quant myself, and have no flag to fly for them. But I don't get this pissing on other people's candles to make your own burn brighter, especially when the criticisms don't even make logical sense. Why would you knock a demonstrably successful niche of the market ecosystem - one of the more succesful niches, in fact, given that Rentech, the king of quant funds, may be the single most consistently profitable hedge fund of all time.

And why would you talk about recollections of a book where you assert critically important details ("they all used to work for hedgefunds") that are 100% wrong and in being wrong destroy your entire fucking point.

What is wrong with you?

Quote from jack hershey:


My role is speculator who uses TA and who frontruns the HERD. I am a systemmic trader who's system has no noise, no anomalies and no flaws......
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!!! Laughing out loud now. "No noise, no anomalies and no flaws..." well in that case maybe you should change your name from Jack Hershey to Jesus Christ, because apparently you walk on water.

Truly excellent traders are open to the fact they have flaws. Truly excellent traders are realistic about the fact that all methodologies have strengths AND weaknesses, and that a constant incremental process of improvement and evolution must be applied over time. Truly excellent traders reflect on mistakes they have made in the past, and recognize that, as much as they hate it, they will make mistakes in future. Truly excellent traders are proud of their skills, and yet deeply humble, because they know the market is bigger than any one man and that new challenges are constantly arising.

You, on the other hand, sound like you think you are the Jesus of trading. Preaching on a message board.


Quote from jack hershey:



So I have a vocabulary and a language I use. In programming terms it is a RDBMS and the coding language is SQL or Haskell could be used. Anyone can look At my algorithm PEP and its three applications: PVT, SCT and SSR. There are one pagers available.

Scoring is easy and it works with a Universe from EPS and RS. The one pager for PVT is codable in about 20 minutes.

I am not as described here by the OP.
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Nope. I am beginning to think you are even nuttier.

I'm beginning to think you could give the timecube guy a run for his money.

Seriously, tell me if the following doesn't sound like vintage Hershey (via timecube.com)

Children will be blessed for Killing Of Educated Adults Who Ignore 4 Simultaneous Days Same Earth Rotation. Practicing Evil ONEness - Upon Earth Of Quadrants. Evil Adult Crime VS Youth. Supports Lie Of Integration. 1 Educated Are Most Dumb. Not 1 Human Except Dead 1. Man Is Paired, 2 Half 4 Self. 1 of God Is Only 1/4 Of God. Bible A Lie & Word Is Lies. Navel Connects 4 Corner 4s. God Is Born Of A Mother – She Left Belly B. Signature. Every Priest Has Ma Sign But Lies To Honor Queers.Belly B. Proves 4 Corners.

It's your soul mate, dude! Jack Hershey and Time Cube Guy! I'm sure he is just "misunderstood" too, by those who "just don't get it"...

Look, I don't know what your deal is, man.

I don't know why you persist in coming on here and talking in gobbledygook - not just my perception, but a whole lot of people's - and I don't know why you persist in making up trading performance stories out of the blue that are beyond nonsensical, or why you rip on hedge funds and quants and other proven successful denizens of the trading world that you seem to not understand.

I think maybe you are pathological. I hypothesize there is something off in your personality or your brain, which is why you have been doing this shit for years and years. I remember you from way back when, before I took a long hiatus from ET, and it was all much the same.

I can't tell you where to post. But I cordially invite you to take your crazy somewhere else.

p.s. I think your new nickname should be JesusCube.
 
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