Stocks is life lol

Any cliffs on your strategy or do I have to read all those books?

On September 20 2015 16:22 whamm! wrote: hhse go make a thread about trading, you seem to be the most successful so far. cariadon is also in finance i hope he sees it and contributes

I also have a long way to go in regards to learning - I don't want to be bound by one product type. In process of learning about futures & pairs trading.

But sounds like a good idea. I'll write up a post of what I've learned through tastytrades - summarise concepts I've applied over course of this year, but learned over the 1.5 years

Would be interested to talk about this with people here if they wish. I'm on the more academic side of things (finance is what I'm pursuing my PhD in atm), so I generally believe in market efficiency and believe that when one produces excess returns (above the EV of your investments given their risk level) by being a day-trader, it is almost always due to randomness, and simply having a static investment strategy based on your risk-appetite is a better idea. In most cases it is extremely difficult to show that beating the market is anything other than running good. Like I said though, I know there are a lot of intelligent people here, and markets are not perfectly efficient, so I can't completely rule it out as a possibility.

On September 20 2015 17:31 Liquid`Drone wrote: isnt stocks basically poker with inverse rake? obviously a much better way to make your living if that's what you're into. but requires a much bigger starting bankroll, because while in poker it's fairly easy to double up a small bankroll multiple times, that doesn't happen overnight with stocks.

Yeah This. Otherwise I heard there was some "fictional" loans where you could buy a lot more stocks, but I'm not an expert. Also bigger risks.

I think if going by EV then taking loans to enter stock market should be super +ev it's just too risky for the individual, especially short term. But have 50 different people do that over a 20 year period and I think the average results would be great.

https://www.liquidpoker.net/poker-forum/1132309/Journey_to_a_Million_with_Options_Trading.html

I feel that the post should have been a blog post o_o

Before getting into the world and reading everything about it .

Where do u do this? is there like some website where u deposit money and do all the things.
Or do u open an account with a certain bank ?
i'm lost about this .

For example i found this : " You only need use £100 or so, no more than that. Just stick to £2 stakes until a time comes when you know that you will make money with what you're risking. Then you can risk more. If that time never comes then you wont really lose anything. "

www.dough.com
www.tastytrade.com

Sign up via them to thinkorswim and you will get the cheaper rates and keep the free resource going by supporting them.
You will also get a paper account to trade/practice with.

On September 21 2015 14:13 Siz123 wrote: Before getting into the world and reading everything about it . Where do u do this? is there like some website where u deposit money and do all the things. Or do u open an account with a certain bank ? i'm lost about this . For example i found this : " You only need use £100 or so, no more than that. Just stick to £2 stakes until a time comes when you know that you will make money with what you're risking. Then you can risk more. If that time never comes then you wont really lose anything. "

The mistake beginners make like myself is look for "the solution" which there is none. Markets are just chaos unlike poker where a person's skill and luck trumps everything else. In markets, its not about timing or luck, its mostly about Psychology - both yours and the markets. Don't try to be a genius and read about everything out there - you will just give up. Read the "Bibles" of fundamental analysis, Charting - the rest is a ton of market research, paid or free. Marketwatch and the news still makes you money. People can do it for a living once you learn more you will realize that.

Reminiscence of a Stock Operator - Psychology of markets, it's a great book and entertaining
Securities Analysis - Fundamental Analysis bible, it's highly technical, teaches one how to do valuations of companies and stock price
Technical Analysis Explained - Charting graphs patterns, one of the best books out there

Candlesticks - these are easy to absorb and quite useful youtube it
Stock Market Indicators - these are buy or sell signals, read or watch when you have grasped technical analysis first

The only people who lose are the ones who've lost and quit forever or those who don't temper their greed. We poker players and Brood War players are really smarter than most CFAs out there trust me, they know not of risk and are overly fearful of it - it's either you are built for it or not. You will lose but make sure you stay in the game long enough because you will learn this.

^^ I know some smart people can do this since personally I know very little of charting, fundamental analysis lol
I am lazy and not focused, but I feel teh Psychology part makes up for my lack of knowledge.
First of all and people here at LP know this about me:

*mediocre poker player at best
*terribly emotional player
*I am a lazy person
*I am a very negative thinker

Imagine if I was wobbly or AndrewSong I think I could make a ton of money , tons more than they ever could make in poker believe me
but I am happy and content that I will make enough for myself to live on

Try to evaluate yourselves and be brutally honest about your flaws. I see so many smarter people here just wasting away and honestly it breaks my heart. This place is my home on the internet and Lpers my internet brehs and watching it decay like this depresses me. I know 1000% some of you here will make more money than you ever thought if you just put your poker and gaming dedication into trading. I might have gone crazy but something clicked in my head hahaha. Listening to the Joe rogan experience helped my depression so much too. Embrace who you are and stop worshipping other people and look for the "genius" in you and I know from reading posts here you know you have it in you. I miss talking to steal city and genjix over on skype, those two were very intelligent people, I dont even know wtf they are doing now.

Can you do a write up on your thought process behind a trade? Compare it to a poker hand history and EV analysis.

Ok I can only do this, dunno EV didnt even learn it. Linear thinking although sounds great in poker and GTO pays well, in trading not so much.
Trading requires more personal clarity, meditation helps I would imagine. Brokers and some hedge fund managers do a lot of cocaine and hookers and now I understand why, they dont know how to relax and are wired 24 hours a day.

Picking my stocks: I'll update what I do as the list will get bigger and bigger.
Top of my head:

*owners - not really important, but is a good thing

*fundamental valuation - as simple as P/E analysis will do, don't try to be a genius and put a premium on being "right" because markets decide that not you, you are not trying to be einstein here which inflates ego so much, money is what you come here for and keep reminding yourself that. Low market cap = low outstanding share count, low supply of shares = makes it easier to fly when theres market interest. I see a ton of CFAs investment bankers etc they brag about what they know and how fucked up some prices are, they make money on salary and commissions, very small from trading on their own, actually these people are weaker traders in general. sometimes market NEVER pays a stock for its true worth, warren buffet will say different but can you wait 10 years?

*continued next time as i will gather thoughts better haha

I'm not so sure I understand the personal clarity part. How does that have anything to do with trading? You're either betting long or short. In options, there's also calls and puts. From what it looks like so far, you're looking for an undervalued company to buy into. It's just research and digging up info that others are too lazy, unwilling to do, or not knowing how to do, and investing in them. That's the definition of fundamental valuation right? So unless you have ADD and have trouble concentrating when reading, you should be fine.

If you have a formula for what's an undervalued company, such as their x ratios and accounting numbers, with a sense of the industry they're in, then you simply buy. It's the same as someone limping 100% of their hands. You simply iso raise. Where does the clarity come in? You could argue that any activity where you're fully responsible for your actions, you need clarity. In that case, poker and being a taxi driver are also included.

PS. I'm only probing because I have a high interest in trading and do some of it myself although poker is definitely my bread&butter.

On September 20 2015 17:31 Liquid`Drone wrote: isnt stocks basically poker with inverse rake? obviously a much better way to make your living if that's what you're into. but requires a much bigger starting bankroll, because while in poker it's fairly easy to double up a small bankroll multiple times, that doesn't happen overnight with stocks.

Shouldn't be like this.

There's rake in invesing which is transaction cost.

Difference is that after rake effects poker is zero sum whereas financial instruments are theoretically > zero sum.

Your confusing the effects of the >zerosumness out weighing transaction cost to the game itself having inverse rake which is incorrect.

On September 24 2015 14:40 Nitewin wrote: I'm not so sure I understand the personal clarity part. How does that have anything to do with trading? You're either betting long or short. In options, there's also calls and puts. From what it looks like so far, you're looking for an undervalued company to buy into. It's just research and digging up info that others are too lazy, unwilling to do, or not knowing how to do, and investing in them. That's the definition of fundamental valuation right? So unless you have ADD and have trouble concentrating when reading, you should be fine. If you have a formula for what's an undervalued company, such as their x ratios and accounting numbers, with a sense of the industry they're in, then you simply buy. It's the same as someone limping 100% of their hands. You simply iso raise. Where does the clarity come in? You could argue that any activity where you're fully responsible for your actions, you need clarity. In that case, poker and being a taxi driver are also included. PS. I'm only probing because I have a high interest in trading and do some of it myself although poker is definitely my bread&butter.

Sure, what you say may be true for some investors. Personally, I do zero research into companies. My delta risk (driven by directional movement of stock) is generally less than holding shares and I profit more from theta decay (time decay) and Vega contraction (volatility contraction) - every now and then I'd throw in other strategies.

So rather than doing research, after research after research, I look for opportunties via a filter. One example is that I will filter for underlyings which are at the higher end of its Volatility over a rolling one year period. I'll check if the stock is liquid and if bid/ask is tight and make myself aware of any 'binary events' for the duration I'm trading for (earning announcements, dividiend, fed announcements etc). Because I believe reversion to the mean for Volatility, I'll sell premium. Depending upon how the stock has been trading for the last few weeks (I'm not doing any fancy tech analysis, just looking at a graph) I'll either go bullish (sell a put), go neutral (sell a strangle/straddle) or go bearish (sell a call). For the duration of the contract, I'll benefit from theta decay, and if Volatility contracts, it means I can close out earlier.

Other times, I'll filter for underlyings at the lower end of its range in Volatility and play for an expansion and throw on a calendar spread or sometimes I'll filter for binary events (earninings) and play it for engagement with say tight iron condor. These are only some examples, there are heaps of combinations of puts/options/duration which will manipulate your greeks (risk) to give you different reward/benefits.

And note that when you put on an options trade, you can deduce your probability of profit. i.e if you are selling an ATM put (i.e stock trades at $30, and you are selling a $30 put), then delta will be 0.50 (50% probability of profit), however if you sell say a $27 put, delta may read 0.27 (73% probability of profit). But its important that you invest the time in understanding the domain and the assumptions/general theory behind these concepts before trading it. These are leveraged products

You are almost scratching the surface of what is true. Unfortunately, most of what you are saying is straight up bulshit. Technical analysis doesn't work. I've seen zero explanation as to why you open a position and where you close it. If it is all technical analysis then i call major bs on this whole thing. So in short you make money consistently because everyone else is bad?

Looks like you are very confused and your mind is blown by the proportions and potential of financial markets. I suggest doing some of that mediation you preach, clear your head, come back and write a detailed post of what your thought proccess and execution of a trade looks like. There is nothing solid in your posts to take away for the person who might be interested in getting started.

I agree, stay away from currencies. Also afaik commodities are best left alone.

I hope you put something solid together because it may help some lpers who are deciding on uni/career. Good luck.

On September 20 2015 03:28 bigredhoss wrote: can you elaborate on where your confidence comes from? if i'm reading right you lost 1/3 of your BR but seem to be pretty confident that you will be successful for a long time and that it's easier than poker. i'm not doubting you, just seemed like the obvious question to ask. i think we've all been through the poker thought process of "I made $xx,xxx money this month and didn't even run that well, if i can play more hours and blah blah blah i should be able to make $xxx,xxx/year at least", and of course it doesn't end up working out quite like that for most people. Show nested quote + Embracing Chaos is what you have to train for... ...all I need now is that chaos gene to be ingrained in my DNA. embracing chaos = embracing variance? i couldn't tell if that's what you were referring to with the chaos stuff but i assume so. getting the chaos gene "ingrained into your DNA" seems like a pretty nebulous goal, if that's a requirement for beating the markets how do you know it's going to happen? or are you just saying that you need to be less of a nit? thanks for the interesting blog post, just my nature to be skeptical of some things. i have zero knowledge about stock trading.

I am not sure, correct me if i'm wrong whamm! but as far as i can tell he does some sort of tic-tac play based on technical analysis. The chaos he is referring to may be because price of x moves out of what is expected and you can't average your way to zero/profit (Martingale) and you end up losing a big chunk in a very short time. If there is any leverage then the problem is even bigger. Depending on what you trade the capital requirements are huge, thus making leverage lucrative.

If you are interested i could break down the numbers of a stock trade or a typical fx trade (i don't believe fx trading via technical analysis is beatable).

On September 24 2015 20:12 cariadon wrote: You are almost scratching the surface of what is true. Unfortunately, most of what you are saying is straight up bulshit. Technical analysis doesn't work. I've seen zero explanation as to why you open a position and where you close it. If it is all technical analysis then i call major bs on this whole thing. So in short you make money consistently because everyone else is bad? Looks like you are very confused and your mind is blown by the proportions and potential of financial markets. I suggest doing some of that mediation you preach, clear your head, come back and write a detailed post of what your thought proccess and execution of a trade looks like. There is nothing solid in your posts to take away for the person who might be interested in getting started. I agree, stay away from currencies. Also afaik commodities are best left alone. I hope you put something solid together because it may help some lpers who are deciding on uni/career. Good luck.

No, not technical analysis. Playing what appears to be the extremes in the greeks or price is the strategy I've learned. What is to be learned can't be covered in a post and the strategy might not be for everyone and hell people might come up with their own strategy and preferences, that is perfectly fine. I'm just trying to explain that there is more than just betting on a direction, and requiring a product to move up to make money.

Not confused. I understand very well my risks and sizing. Sure I can put on specific trades etc and explain my reasoning, but what is the benefit if no one has invested time in understanding the domain. It's probably best to give high level theory to engage people's interest so that they will do their research, as I said, people shouldn't touch it, unless they do their own research, as these are leveraged products.

I don't think unnecessarily generating fear in taking control of your finances is helping either. Its better to engage and motivate, and let people find things on their own. If they have specific questions and need direction that is fine also.

I dont know anything about Options bro, I can't say anything about it. But if you're following some secret sauce I tend to agree with cariadon here.