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Heisenberg Beta
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Heisenberg Beta

by The MoleDecember 27, 2013

Welcome to the Heisenberg beta – this is going to be kick-ass. In the past three months Scott has been having a lot of fun trading it by hand – thus far he’s up to 50R+ in one quarter. Insane! He’s been exclusively trading the Asian session and the first few hours of the Euro session. Here are his results thus far:

Those were taken according to the original rules we are attempting to approximate with Heisenberg. And of those three months he was in Bali for a few weeks without Internet access, so we are talking a bit over two months here. Last night he banked 8R as Forex went completely gangbusters – here’s one he grabbed:

I think we’ll be having a lot of fun in 2014. Scott and I are going to test the strategy for a few more days as I just finished implementing the new campaign management code. I’ll also have to make sure the messaging is up to snuff. But expect to start receiving alerts starting in the new year. If you haven’t yet then sign up here for free.

In case you are wondering – is this better than CrazyIvan? Yes and no – CI is a slow and steady grinder of a strategy which offers roughly 30R per year with low draw downs. Heisenberg is a high SQN short term trend trading strategy and it’s still relatively new for us. CrazyIvan requires minimal interaction on your part and it’s something you do over the long term – we are talking years. Heisenberg on the other hand is a system that has been designed for the ambitious trader who seeks to make a living out of trading futures and forex. That may be you or perhaps that could be you if you work very very hard and are comfortable following precise instructions. Like CI it takes discipline and persistence – it’s not like going to Vegas and rolling dice. But I’m pretty sure you all know that by now.

Happy New Year from yours truly and the Convict.

Cheers,


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • bullregard

    Happy New Year Mole, and Scott, and everyone!

  • Dyellowflash

    Cool mole! I think the new system will be enjoyable! Check up the VIX. Its up by about 0.7 from yesterday’s low despite equalities going north all the way. Not sure whether it can be used as an inverse indicator but anyway, I had a good fill at the lows and now I finally had 3 out of 4 things I want to see b4 I go terribly bearish – Gap down week on VIX, mkt bursting high UP on a single day & ur ZL hitting a good high (together with ticks at highs). All I need now is the short term bearish candles on the hourly and I will pull the trigger – see where it goes next week – hopefully the timing will be just nice 😉

  • Skynard

    Hehehe, nice move today:)

  • Ronebadger

    What’s up with this, from a few days ago? I thought it was a mistake and corrected by now. (see far left 5min candle)
    http://stockcharts.com/public/1092905/chartbook/288422139;

  • Dyellowflash

    damn… i only had 1 fill yesterday and the vix took off for the day… lol… i am going out for drink now – fight next week then 😉

  • Ronebadger

    My previous comment got eaten? What’s with this 15min candle from a few days ago…I though it would have been corrected.
    http://stockcharts.com/public/1092905/chartbook/287942595;

  • Talon_III

    Just signed up for Heisenberg Beta, pretty damned excited about this (within the context of Ivan’s journey of 10,000 trades, of course)!!!
    Happy New Year Mole, Scott, and everyone! Thanks for a great year and making this the best trading site, by far, on the planet!
    May 2014 be yet another prosperous year for us Stainless Steel Rats and our fearless leaders!!

  • Skynard

    Plenty of time:)

  • wandering196

    i think zerofx is not working

  • newbfxtrader

    Scott is back!!! With Christmas goodies.

  • Ronebadger

    Is Fearless out there with some final, year end words of wisdom for us?

  • http://evilspeculator.com molecool

    He’s working in the background with me. So you guys get to enjoy the fruit of our labor. But he’s not participating in the site because he didn’t feel like folks were listening.

  • http://evilspeculator.com molecool

    Looking into it…

  • Skynard

    Nice VWAP test before<<<<<<<<<<

  • newbfxtrader

    Ah well it still sounds like a great setup. lets make some pips.

  • http://evilspeculator.com molecool

    You bet mate – we’ll be kicking ass and taking numbers in 2014.

  • http://evilspeculator.com molecool

    Just want you guys to understand that it’s not a casual system to follow. We will be putting a bunch of charts into weekly rotation and you’ll have to take the entries when they trigger. And if they do you’ll have to pay attention as we have implemented pretty sophisticated campaign management. It’s a very pretty amazing system but it’s not designed for the casual trader. You have to be serious about making money.

  • http://evilspeculator.com molecool

    Zero indicator scalp signals today and yesterday…

  • sburtt

    Mole/Scott, do you think we will get some more disclosure on what we are buying into here as you guys did with CI? I think that would help with giving us rats the confidence to follow this new system like religion. Thanks

  • Skynard

    Step 2 VIX

  • bdoone

    Traded below BB yest but didnt close below, if I not mistaken

  • Skynard

    Ah, you are correct. Hammer though. Got my red close, all I could ask for at this point. Short again:)

  • Darkthirty

    How many trading days next week before EOM EOQ?

  • Skynard

    Think we are open Mon-Tues

  • Darkthirty

    OK Monday 16300 DJI 1, Tuesday16350 2, after the first…the bubble pops?

  • http://ibergamot.blogspot.com/ i Bergamot

    Yesterday was effectively last day of the year.
    Most brokers will clear trades in 3 days, depends on their own rules.
    Fidelity will settle today’s trades on 1/2/2014, so for me this year is already in the bag.
    Happy New Year, lads!!!

  • Darkthirty

    Window dressing has been completed?

  • http://ibergamot.blogspot.com/ i Bergamot

    Look closely into the window…
    ITS A ZOMBIE….ha-ha-ha

  • Darkthirty

    That’s my reflection……

  • amokta

    Heisenberg – taking the uncertainty out and preserving the principal !

    As regards Heisenberg, are only setups that trigger during US working hours offered. Afterall if setups trigger round the clock then many will miss them if asleep?

  • Skynard

    Sleep is for closers:)

  • amokta

    Lol! I’m sure even convictscott needs his ‘beauty’ sleep 🙂

  • Rami Golan

    Why did you call it Heisenberg? Any kind of theory behind it?

  • http://evilspeculator.com molecool

    We consider it a high quality product with a low number of false positives and it offers a high SQN. It’s evil as it exploits the weakness of other traders – i.e. bottom fishers and top callers. And it’s very profitable – at least it has been thus far. So I think the name is very appropriate 😉

    Now before you scratch me off as an uneducated rube, let’s draw some parallels in regard to the Heisenberg principle and I’m not referring to the observer effect with which it is often confused. In essence Heisenberg’s (and originally Kennard’s) theory expressing the uncertainty principle actually states that uncertainty is a fundamental property of quantum systems irrespective of measurement. So to dumb it down a bit more – according to the theory uncertainty is an integral part of all matter and energy in the universe as quantum effects are observed across all particles that make up our universe. It even goes further – if you are familiar with quantum entanglement then you understand that two linked electrons could be separated by millions of light years and still affect each other’s state.

    Although much of theory is way above my pay grade there has been one big take away message for me as a trader. Apparently chaos and uncertainty are integral to everything that exists in our universe. Back on earth however most traders are constantly attempting to predict the future state of digital information exchanged in a system affected by tens of millions of participants. It’s a futile endeavor and the only way to profit is by responding to behavioral patterns exhibited by those very participants. To predict price movement affected by so many participants is tantamount to attempting to change the laws of (quantum) physics. The more in the future the less successful you will be. Heisenberg proves that the more precisely the position of one particle is determined, the less precisely its momentum can be known, and vice versa. There is a formal inequality between the standard deviation of its position and that of its momentum. I think this formal inequality also exists between price and future momentum. It is a problem that cannot be solved.

    Heisenberg does not attempt to predict – it solely focuses on predictive patterns exhibited by market participants. I think that is why it works so well – in particularly it exploits the behavior of unsophisticated participants – the more emotional the better. And that again brings me back to Walter White. Forced by circumstance he leveraged his considerable academic knowledge to become the ruthless psychotic killer with a single minded mission to exploit the drug habits of others in order to satisfy his personal financial goals. He was extremely intelligent and one element that served him was that nobody would suspect a man like him. He was clearly evil but we could not get to hate him really – quite the opposite. Because deep inside there is a Walter White lurking in all of us – waiting to come out – it’s just a matter of creating the right circumstance.

    In order to become successful in trading you have to position yourself so that other people lose to you. And in order to bank a lot of coin a lot of people have to lose to you. If you bank a big winner that money has not been created out of thin air, after all the market is a zero sum game. Thus it takes the losses of many to produce a big win for a minority. Trading the market means a constant battle between participants attempting to position themselves ahead of others – and more precisely at the cost of others. That is the ugly truth of trading that many politically correct observers are unwilling to embrace.

    Heisenberg has been designed with that specific goal in mind. It constantly analyzes price momentum and does predict resolution per se – what it attempts to do is to get positioned ahead of inflection points which, based on empirical observation, are conducive to triggering certain behavior. Heisenberg understands it cannot predict market movement, instead it simply attempts to predict and exploit human behavior. Now it could be argued that one equals the other and perhaps there is truth in that. However we argue that we do not attempt to predict price movement based on indicators or even statistical measures – we simply recognize behavior via price patterns and take calculated risks. We know we cannot predict the future – but we can predict human behavior. And when we are proven right we employ sophisticated campaign management to maximize our profits. That again is based on observance of how price responds to human behavior.

    Anyway, in short – we believe that Heisenberg is a great name for our new strategy. But no – it’s not blue and you can’t smoke it.

  • Rami Golan

    Fair enough..:) Will try it from 6’th Jan onwards..!

  • http://dartht.blogspot.com/ Heisen_Gerb

    Because deep inside there is a Walter White lurking in all of us – waiting to come out – it’s just a matter of creating the right circumstance.

    Word.

  • http://evilspeculator.com molecool

    See above…

  • http://evilspeculator.com molecool

    EURCAD.60:

  • wandering196

    paying attention, thank you

  • Skynard

    /YM 4hr playing out, see if we get the new low:)

  • DollarChaser

    what are those two indicators you have on that chart? not the standard 25 and 100 sma i see…

  • HotRightNow

    I really like your analysis. But I want to raise an objection that I think weakens the position you want to carve out.

    “…but we can predict human behavior.”
    No, I think what you are describing is that it is possible to predict behavioral patterns or tendencies. You aren’t saying that you know what behavior will definitely occur… but, more modestly, that you have identified a pattern (or patterns), which suggest a greater likelihood for certain behaviors to occur. So, not attempting to predict human behavior but recognizing behavioral patterns, with sound money management to account for uncertainty and, as you say, avoid predicting resolution per se. Right?

  • http://evilspeculator.com molecool

    Took profit at 1.2R and re-entered for 3/4 of the units with same stop. EURCAD reversed since then but the original stop is still in place.

  • http://ibergamot.blogspot.com/ i Bergamot
  • http://evilspeculator.com molecool

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  • http://evilspeculator.com molecool

    LOL 🙂