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Response to HackerNews comments on my trading

ptotrading.blogspot.com

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Re: Response to HackerNews comments on my trading

#11

Post by comboy »

opendais wrote: post #9
comboy wrote: post #8

You seem like a nice and rational guy, but it looks to me as if your post ended just after the introduction. Apart from the info that there are many profitable trades which success that cannot be explained by luck, I'd love to see counterarguments to other things. For example, if you are a successful trader, it seems a kind of activity that scales very nicely. If you can be sure you are profitable in say a month (or…

> If you can be sure you are profitable in say a month (or a year), you are multiplying money, so using leverage or loans you should be able to basically have any amount of money you want (and what about trades in that case?). Its not that simple, sadly. You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activ…

> You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activity. At small scales, a system that appears to work will break down at large scales.

OK, true it doesn't work up to infinity, but given how much money there is on the Wall Street, I would imagine that when your activities are big enough to move the market, you are way past the point of wondering what you can and what you cannot afford (say $1B+ not to be too vague). Especially given how many instruments there are out there.

Re: Response to HackerNews comments on my trading

#12

Post by lnanek2 »

opendais wrote: post #9
comboy wrote: post #8

You seem like a nice and rational guy, but it looks to me as if your post ended just after the introduction. Apart from the info that there are many profitable trades which success that cannot be explained by luck, I'd love to see counterarguments to other things. For example, if you are a successful trader, it seems a kind of activity that scales very nicely. If you can be sure you are profitable in say a month (or…

> If you can be sure you are profitable in say a month (or a year), you are multiplying money, so using leverage or loans you should be able to basically have any amount of money you want (and what about trades in that case?). Its not that simple, sadly. You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activ…

Warren Buffet said the same thing. That he just couldn't take advantage of the same situations now that he moves a lot of money that he used to get to the top.

Re: Response to HackerNews comments on my trading

#13

Post by opendais »

comboy wrote: post #11
opendais wrote: post #9

Earlier quoted context omitted.

> If you can be sure you are profitable in say a month (or a year), you are multiplying money, so using leverage or loans you should be able to basically have any amount of money you want (and what about trades in that case?). Its not that simple, sadly. You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activ…

> You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activity. At small scales, a system that appears to work will break down at large scales. OK, true it doesn't work up to infinity, but given how much money there is on the Wall Street, I would imagine that when your activities are big enough to move the mark…

He is trading penny stocks with a market cap is less than $50 million, generally.

http://www.investopedia.com/terms/n/nanocap.asp

The amount of money needed to move the needle on these is very small, its why they are often used in pump & dumps.

He doesn't have anything to do with "Wall Street" which works with stocks that follow SEC rules, commodities, etc. in the way you mean.

Re: Response to HackerNews comments on my trading

#14

Post by opendais »

comboy wrote: post #10
howeyc wrote: post #6

Do TA proponents ever talk about the suggestions that the reason TA works is because of a feedback cycle? That is, if you get enough people with enough influence (cash) all believing they can read tea leaves, and make similar movements based on that, it kinda works.

> kinda works I think it does influence the market, but it cannot make them all profitable. Unless you think that group of TA believers act as a big pump and dump scheme (but I guess most markets are too big for that?)

Penny stocks [as the OP trades] wouldn't be.

He tries to obscure it a little with things like "pink sheets" and acronyms but I don't think that is intentional. I'm guessing people just don't read the original article he is defending.

Re: Response to HackerNews comments on my trading

#15

Post by [deleted] »

comboy wrote: post #11
opendais wrote: post #9

Earlier quoted context omitted.

> If you can be sure you are profitable in say a month (or a year), you are multiplying money, so using leverage or loans you should be able to basically have any amount of money you want (and what about trades in that case?). Its not that simple, sadly. You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activ…

> You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activity. At small scales, a system that appears to work will break down at large scales. OK, true it doesn't work up to infinity, but given how much money there is on the Wall Street, I would imagine that when your activities are big enough to move the mark…

[deleted]

Re: Response to HackerNews comments on my trading

#16

Post by fiatmoney »

There is a pretty solid hypothesis that when traders talk about "reading a chart", they are not in fact using easily explainable patterns, but rather more hardcore estimations of market psychology, derived via the brain's rather robust pattern-finding machinery. The chart patterns are more of a mnemonic than a decision rule in and of themselves.

Re: Response to HackerNews comments on my trading

#17

Post by namecast »

opendais wrote: post #13
comboy wrote: post #11

Earlier quoted context omitted.

> You can't buy $InfinteMoney$ worth of stock X in a single transaction, you end up moving the stock price as you buy/sell. This allows others to respond to your activity. At small scales, a system that appears to work will break down at large scales. OK, true it doesn't work up to infinity, but given how much money there is on the Wall Street, I would imagine that when your activities are big enough to move the mark…

He is trading penny stocks with a market cap is less than $50 million, generally. http://www.investopedia.com/terms/n/nanocap.asp The amount of money needed to move the needle on these is very small, its why they are often used in pump & dumps. He doesn't have anything to do with "Wall Street" which works with stocks that follow SEC rules, commodities, etc. in the way you mean.

Deleted my response when I saw this better one. I'll only add these links as they're good for background:

http://en.wikipedia.org/wiki/Slippage_(finance) http://en.wikipedia.org/wiki/Market_impact

Re: Response to HackerNews comments on my trading

#18

Post by existencebox »

fiatmoney wrote: post #16

There is a pretty solid hypothesis that when traders talk about "reading a chart", they are not in fact using easily explainable patterns, but rather more hardcore estimations of market psychology, derived via the brain's rather robust pattern-finding machinery. The chart patterns are more of a mnemonic than a decision rule in and of themselves.

I may get laughed out of the park for the following anecdote, but playing MMO markets for the last few decades has convinced me this is true. Take any given item to be a stock; and looking at the market trends as "Reading the charts" and you quickly realize that your mental heuristics that may be provably very successful are MUCH more difficult to put into algorithm. I came to this realization recently when I tried to put code to the logic that had earned me 10s of thousands in Guild Wars 2 and found it a far stretch from enumerating the same list of "trades to make" that I would come up with manually, even when I felt I enumerated all of my heuristics.

Long story short, the brain is a ridiculous tool; I can't wait until we understand it better.

Re: Response to HackerNews comments on my trading

#19

Post by namecast »

howeyc wrote: post #6

Do TA proponents ever talk about the suggestions that the reason TA works is because of a feedback cycle? That is, if you get enough people with enough influence (cash) all believing they can read tea leaves, and make similar movements based on that, it kinda works.

This is discussed all the time - there's a running joke about how the 200 day moving average only works because everyone believes it does.

That said, there are so many different TA techniques / indicators / gurus that, for all but the most well known TA indicators (there are easily hundreds!), there simply aren't enough people trading on the signals at the same time for the same securities with enough volume for there to be a proper feedback loop.

If there was a repeatable, predictable feedback cycle, it follows that we'd all be charting it and trading off it (or backtesting with quant analysis to confirm the existence of the cycle, or having long conversations about nothing and convincing ourselves it was fundamental analysis, or whatever your preferred method of analysis is.)

Re: Response to HackerNews comments on my trading

#20

Post by fleitz »

opendais wrote: post #7
debacle wrote: post #4

Refuting crappy internet comments about your blog isn't really a recipe for success, unless your criteria for success is more pageviews. There were tens of people in that thread who were spouting off armchair economics like they were financial experts. That type of ignorant rambling should really be reserved for /r/economics or, better, /r/bitcoin. It doesn't really deserve to be responded to, much less refuted.

Yes, but he is talking about trading penny stocks/pink sheets. He is on par with the people the "armchair economists" unless he is super wealthy and can prove it. You sure you want to act like he is a financial guru? "If you've been following penny stock trading circles on twitter for awhile, you'll know certain tales of legend were born on that day. One particular trader profited $1.2 million in a day. When that man…

HFT on fucking pink sheets? LULZ.

What about the HFT risk from getting goods for free on CL and reselling them back to CL?

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