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Chasing Unicorns
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Chasing Unicorns

by Trading GangsterMarch 19, 2019

I spend the later parts of Augusts in the middle of the Black Rock desert, miles from civilization at the greatest party in the universe: Burning Man. I went from not thinking it was going to be my thing to 50% owner in a 36’ RV, purposefully built for the playa, heretofore known as Built 2 Burn (B2B). B2B is currently in the rental pool for Cochella.

B2B is a 1987 Fleetwood Bounder with a non-EFI 454 big block that after a fresh tune-up involving a carb rebuild, cap, rotor, plugs, wires, fuel pump, filters, etc. nets 3 miles per gallon. 4 MPG coming down from Tahoe with a tailwind. We’re currently looking for our next RV to convert into our ultimate playa machine: Burn Force 1. It will be a bad ass diesel pusher for driving up and down the west coast since I’m digging the RV life a lot more than I thought I would.

Touching briefly on some of the comments I saw yesterday, some of the discretionary traders are hung up at picking direction. If you’re an Aim And Shoot chart trader, direction should have simple mechanical rules. Leave the discretionary part to picking entries and exits.

From my past few posts, I’ve detailed my foray into trading. I was lured by the siren into all of the major gurus you’ll find on CNBC, Google and YouTube. I’ve probably taken all of their courses or subscribed to all of their services. Needless to say, most of these guys are peddling garbage.

In late 2015, Quantopian was breaking large on the scene and I started focusing my attention there. Quantopian’s algo development environment and tutorials run on python. There was one problem: I didn’t know python. By then I was fluent in EasyLanguage and knew how to code up just about anything I could imagine in MultiCharts.

Enter my savior, Quant Jesus Dr. Ernie MF’n Chan. Ernie was a quant Rambo, a trail blazer in the quant retail world. Ernie is a PhD, worked on IBM Watson and really fucking smart. But you can tell he’s tried all of the bullshit many of us have, which makes him much more relatable to the aspiring quant. He is arguably responsible for making the word ‘quant’ and quant strategies in general something most people are familiar with.

Most notably, Ernie is a REAL trader! He runs a REAL hedge fund! No theoretical non-sense.

His influence runs deep, which you probably don’t see much in the retail world. Recently, I’ve been helping another trader convert a pair trading strategy from Matlab to run in python. A pair trading strategy in Matlab is Ernie’s calling card, nobody was doing that before Ernie came along. I’ve been helping him retool it to run in pure python.

If this post is worthy of Ernie’s eyeballs, if you do anything Ernie, I think you would 10x your readership if you would teach in python instead of Matlab.

I liked Ernie’s approach because he was testing the shit out of everything he did. There was no voodoo, everything was well tested with detailed explanations of the mechanics of why things worked and what the edge was.

I signed up for a couple of classes at Quantcon taught in python, but I still didn’t know python. It’s a real programming language, it’s object oriented and I had no clue what that meant. So I started on Learn Python The Hard Way and made it through it in about 15 days. I put an ad on Upwork for a python tutor that knew trading and Quantopian.

Here I found Ed, a real python engineer. Ed now works for my firm and is primarily responsible for turning me from a clueless python idiot to object oriented python pro implementing TensorFlow in an hour. With a couple of Skype sessions that involved helping me convert MultiCharts strategies to run on Quantopian, I was digging the python thing and learning it quickly. Quickly enough that within two months, I was comfortable enough to take an advanced workshops taught in python.

I bought a ticket to Quantcon 2016 in NYC and hit the first featured speech: Ernie speaking on volatility. Over the course of the rest of Quantcon, I learned about machine learning, quant bond trading and met a couple of 7 figure producing traders when I was having drinks with their broker.

You mean they don’t use the Shark Fin Indicator to make 7 figures like Wendy Kirkland? My world is ruined.

I also took a bunch of quant workshops, devoured everything in the Quantopian tutorials and regularly combed through the discussion forums on Quantopian. Most of their algos are geared towards hedged strategies moving tons of dollars, which means it’s not geared for day traders. But the astute trader can find enough gold there to apply it in day trading contexts.

I remember the moment I was enlightened in the trading game. I was at a workshop that Ernie was running, of the 13 people there, I was the only one (at the time) who wasn’t an institutional trader. During a break, there was a discussion on how they were all excited about earnings seasons and crushing it with essentially the same strategy, except this was nothing I had heard of before. The way most retail traders trade earnings with options:

  1. Trying to guess direction, with no clue about impending IV crush
  2. Trying to guess direction, with a mild clue about impending IV crush
  3. The semi-pro, direction neutral playing IV crush

These people weren’t doing any of these things. Their strategies hinged around people trying these three things. Duh! It’s like betting on whether or not people would gamble on earnings and it’s a sure thing 99.9999999% of the time.

I feel like I had just been hit by lightning and had seen the light: I’d been chasing unicorns. There was no book, no course, no workshop, no linear algebra refresher that was going to give me the secret I was missing to make everything work. The education I was seeking WAS NOT on Google, YouTube, CNBC or a guru’s chat room.

More importantly, I was learning about actual concepts that WORKED in the professional circles, not retail circles. This changed everything.

No one was going to hand me the keys to the kingdom, I was going to have to work for it and blaze my own trail. No one was going to sell me an automated strategy that netted .3R expectancy and made 100 trades a month. I was going to have to figure it out on my own. With my new grasp of reality, everything changed.

  • There were concepts that flat out worked and those that didn’t.
  • Strategies that work well long term take 500 hours minimum of R&D time, 1000s of hours long term with Kaizen principals.

The good news is I had taken so many workshops, seminars, read so many books that I had a massive strategy junk yard, similar to that floating chunk of plastic in the ocean. I return to this pile and use these like parts cars – pull the equity curve thing out of this one, pull the position sizing algo out of this one and put it together with everything else I know that works into something unique.

How did I end up as a prop trader? Almost three years ago, I was working from a crowded coffee shop one morning and two traders sat down next to me. One of them was a recruiter for a prop firm, the other was a potential new trader coming from a hedge fund. I was deeply intrigued. I chatted them up and the rest is history.  

So in summary, if Ernie Chan and Euan Sinclair are at a trading expo, I’d buy a ticket and go network. If the CNBC Fast Money chodes are there, I would run in the other direction.

That’s it for today. In my next appearance, I’ll rap about the volatility ETFs and talk about where I would focus my trader education in retrospect. 

 


About The Author
Trading Gangster

  • https://evilspeculator.com Sir Mole III

    Great post again! 🙂

  • Mark Shinnick

    Yeah, hunting the hoards of clueless hunters….beautiful.

  • ridingwaves

    So your floating pile of trash really was gold?

  • Ronebadger

    12:49 EDT – Did something just happen? A disturbance in the Force?

  • BKXtoZERO

    L TVIX today 26.25 on what looks to be break down of STT, still holding from Friday

  • BobbyLow

    Loved the part about the “CNBC Gurus”. I think most of us drank the coolaide supplied on that network at one time or another. CNBC combined with my own naivete cost me a shitload of trading capital. Beginners think that these guys really must know what they are talking about. I found out the hard way that they are actually full of shit. But that was then and this is now.

    FWIW, I also learned the hard way that calling tops and bottoms are not for me. Directions are pretty obvious and I don’t try to fight them. JMHO

  • BKXtoZERO

    I look forward to the Volatility post!

  • https://evilspeculator.com Sir Mole III

    He used it for parts – that was his point.

  • Julie 35 – 25 – 36

    Thanks for the post TG
    JULIE

  • Sp00nman

    TG, I gotta ask what did you do before being a “quant guy?” You said you graduated with a degree in engineering, were you in the engineering field or you went “straight” into trading?

    Cool story. There’s no substitute for hardwork. *thumbsup*

  • Yoda

    After reading this post, I feel like an idiot without a paddle in dinghy, trying to find his way home in the middle of a dark night, going through shark infested waters.

  • Sp00nman

    Ya, everyone knows gold doesn’t float.. *smh*

  • zzezzezz

    Yeah, one part of me just wants to throw in the towel.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • randomuser6789

    Great stuff.

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    I thought I was a sparkle pony.
    but apparently, I’m just a smart ass.
    😉
    Off to Lunch

    https://uploads.disquscdn.com/images/1f97feadefb979540e3c1c3661d9e88ba9fc12de6b8a22aeda6578f9b416c3fe.png

  • https://evilspeculator.com Sir Mole III

    You don’t have to feel this way. Tony and I are going to kick open the door wide to make a lot of tools and resources available in the coming months.

    Look I have been trying to introduce some very basic stuff over the past few months but with a mixed response. Which was a bit frustrating to me because I just didn’t understand why so many here would want to continue doing the same old stuff every day

    The ball is in your court. If you want to step it up and kick your trading to the next level both Tony and I are here to help.

  • https://evilspeculator.com Sir Mole III

    See above ^^^^^

  • https://evilspeculator.com Sir Mole III

    See above – you’ve come here for a long time GG. The day you’re willing to step it up for real – both Tony and I are here for you.

  • https://evilspeculator.com Sir Mole III

    I’ve worked in Silicon Valley for five years and met a lot of very smart people. But Tony is probably among one of the brightest minds I have ever come across. Which is why I’m really hyped about embarking on new endeavors with him – again more will be disclosed as we roll out new services and opportunities for everyone here.

  • https://evilspeculator.com Sir Mole III

    He did it just for you 😉

  • https://evilspeculator.com Sir Mole III

    Don’t fight the system – go go with the flow 😉

  • http://www.captainboom.com/ captainboom

    I’m looking forward to it. Thanks Mole.

  • mSquare

    They do serve a useful purpose and not ‘too bad’. They spew far less falsehoods than political news channels of various kind and biases. I mean, a quote & news story is what it is anywhere.

    As for those ‘Gurus’ – they are actually quite useful if used in the right way! Recently, I have had good success in taking ‘contra trades’ that the Gurus talk about. eg. Guru said ‘Heavy buying of just-in-the-money calls in XYZ’ which alerted me to stock I owned and I decided it was more likely selling of calls to protect downside – sure there was bad news to follow and I saved a bundle! Or often, I just plain reversed bearish earnings options spread trades the Gurus described to otherwise to nice profits… Of course you have to work to see if what Guru is saying is of value (to you) but there is no free lunch

  • Sp00nman

    I’m excited to hear about your new endeavors, but I’ve come to realize *I* need to put in the work to get to a certain level. No amount of posts by you will be able to teach us all the skills necessary to start creating a system. I appreciate the repeated nudges.

  • BobbyLow

    Fading some of the gurus is not a bad idea. 🙂

    BTW, I take full responsibity for following some of the bad info that was put out on CNBC during the months following the tech bubble bursting. In my case, it was simply that “I didn’t know what I didn’t know” and after really crushing it during the tech bubble (by total luck as in being at the right place at the right time), I thought I knew alot and my hubris cost me. I haven’t tuned in to CNBC for many years so perhaps the format has changed but I doubt it. What I do now is I try to stay away from as much noise as possible, stick to my own plan and only trade sectors that my current trading plan works with.

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    back from lunch. dam metaphorical non-production fire broke out.
    no rest for the weary. The office practice fire drill before that. Crazy.

    Tomorrow is Spring Equinox, and a Full Worm Moon.

    Dare I say the worm has turned?….nah.

  • BKXtoZERO

    It looks like huge leverage is employed. He has a system with an edge but uses so much leverage that he is done for the day after an hour or two.

  • Julie 35 – 25 – 36

    Go Bears Imperative to watch 2807
    JULIE

  • Yoda

    Thank you, kind Sir.

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    If you have to use a lot of leverage to make a living.
    How long is the living?

    https://projectinfinitum.files.wordpress.com/2009/04/revolver-cylinder.jpg

  • zzezzezz

    tiny long for an attempted end-of-day scalp…

  • Ronebadger
  • zzezzezz

    done. paid for groceries 🙂

  • BobbyLow

    Wow! That was a quick – Wham, Bam, Thank You Mam. LOL

  • Julie 35 – 25 – 36

    Good man RB I continually watch SPY volume. As I stated previously looks like distribution from last Wednesday
    JULIE

  • zzezzezz

    yeah, just grabbed one handle on /RTY

  • Julie 35 – 25 – 36

    BL You guys better not be that fast ! LOL!
    JULIE

  • zzezzezz

    HAHAHAHA
    yes ma’am…….

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    faster.
    😉

  • Ronebadger
  • BobbyLow

    Not me. 🙂

  • BKXtoZERO

    Oh I trust what he is doing. He uses leverage quickly and under control. That is what I would like to do…. they don’t give retail tools like that. TVIX is about as quick moving a play as there is for retail but only one sided unfortunately. I had some days where I use a large position and am done in 20 minutes to an hour, keep the stops super tight and you are right or wrong quickly and when right it is glorious. I get it.

  • VXXTrader

    Damn, I gotta get out of here!! been in Silicon Valley all my life.

  • Julie 35 – 25 – 36

    GG I not color blind GG ! Busts down thru the 5 ema approx 2819 and a LEVEL 2 @ 2821 will be advantage Bears
    JULIE

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    too bad. I was going to trick you into thinking you were a redhead. (“bear! bear!….bear!”)
    😉

  • Julie 35 – 25 – 36

    Again watch approx 2807 – 2809 for a possible bounce pperhaps to a lower high to short
    JULIE

  • BKXtoZERO

    It never closed outside

  • Ronebadger

    That’s why it’s a Poor Man’s or Begger’s signal

  • zzezzezz

    so there IS such a thing as a “bold old trader”?

  • bankwalker

    not too slow .. not too fast … just kinda half fast …

  • https://evilspeculator.com Sir Mole III

    Hey guys – miss me yet? 😉

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • BKXtoZERO

    More pictures!

  • http://www.captainboom.com/ captainboom

    I scalped 4 ES points off the bottom. Trailed my stop too tight and got taken out. There were 10+ to be had.

  • ridingwaves

    I get it…one mans trash is another’s gold…..finding the parts is probably the key to winning….I’ll probably hit you and TG up for the tools and tips soon, I’m killing it in bio and trend trades and might have an even better niche with your new tools…

  • sutluc

    Thanks for the post, an interesting glimpse into your world.

    I spent years thinking that if I just learned some magic thing I could predict the future. (Which is what most retail rats think they need to do.)
    Finally came to realize that I can’t predict the future, ever.
    I am now the lowliest of retail mice, working a simple systematic approach on a timescale that I can manage, something that meshes with my psychology and available time and mental resources well enough that I can get it done.

    If only I had known in the beginning what I understand now….

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • Edd

    Amen Sutluc, a books worth of knowledge and wisdom for traders, distilled down to 4 powerful sentences. Share with you my own life of trading experience and learning to a T.
    Well said, thanks.

  • BobbyLow

    Wow! This is my exact sentiment too.

    Thanks.

  • Yoda

    If only I had known in the beginning what I understand now….I’d be wealthier now…

  • ridingwaves

    CL breaks out here and 61 and change is on….

  • BobbyLow

    That would be nice. 🙂 Been long since 56.89 and might have caught a run.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • ridingwaves

    there with you… what I’m looking at on the hourly https://uploads.disquscdn.com/images/dcf67a9f4a7dcd4652f4d0e9f8c9be62e699c6a1a1e5f1141fc83473b02174ce.png
    ridingwaves BobbyLow 13 days ago
    thanks BL, just following the path that you blaze….good luck in your trades, I do like CL to move higher over next couple months…good support in current area, 60-62 is the real resistance but conjecture is just that..

  • ridingwaves

    61.50-62 will be sticky…

  • BobbyLow

    Thanks RW.

    BTW, after recently adding BIO (From your Wheelhouse) to my stable (again), I took a little profit on LABU this morning. I might be getting used to the way this stuff trades and opened a 1/2 Position Short LABD that might not be around too long. I’m being extra careful with today being Fed Day so by the EOD, I’ll either be full short BIO or back in long. I missed a fantastic long on LABU earlier but wasn’t trading the sector at the time. I’m still long FAS (Financials) but that’s showing signs of weakness so it might not be around much longer either.

    In the meantime, even though it could be a bumpy ride along the way, I think your numbers on CL are spot on.

  • BKXtoZERO

    glad I tossed that quick short attempt. (he he he)

  • Jason13

    Great work guys!

  • BKXtoZERO

    IYR has what looks to be a break away gap heading down. If they can’t close this gap pronto, real estate starts to smell… https://uploads.disquscdn.com/images/55e4e270952e642d78940bb0b3e1352b84914a771c1c45381db956523f8753ec.jpg

  • Yoda
  • http://iberianviews.blogspot.com/ catracho
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    I like it. that blue line may be a ceiling!!
    connect those RSI highs, may be a ceiling too.

  • mSquare

    I wish!

    Bought some $VDE yesterday on a possible IHS. Similar chart for IYE too

  • ridingwaves

    Biotech-the 6th innovation wave….still has legs but full of heartbreak and wealth….

  • http://iberianviews.blogspot.com/ catracho

    and coincides with 61.8 % Fib retrace of fall from around 77

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    too perfect

    it’s a patsy trap!!
    😉

  • kudra

    IWM on a serious 2 day slider. Is Jeff Gundlach correct? Are we in a bear market and just experiencing a hearty bounce? he’s a guru a cut above the rest.

  • BKXtoZERO

    you are posting in a “Guru” free zone…….

  • BobbyLow

    LOL

  • kudra

    ha. nice one. he runs major money, so he’s more than just a guru

  • ridingwaves

    move left young man…the desert is blooming….
    the 2 bottoms are eerily similar….the end results if it gets thru your line here, looks bad for bearish bets according to last fractal in 2016 bottom and similar juncture

  • BKXtoZERO

    People’s opinions don’t always matter no matter how much money they invest…. many a Guru has been dragged though the mud with their calls

  • mSquare

    Didn’t he also call for yields to rise with ^TNX at 3%?

    Today ^TNX seems be heading towards the Jan spike-low of 2.55 and TLT > $122

  • http://gerb-reloaded.blogspot.com Gold_Gerb

    IWM is soggy on the weekly.
    but the trend is never ending up.

    https://stockcharts.com/h-sc/ui?s=IWM&p=W&yr=5&mn=0&dy=0&id=p27104084599

  • Julie 35 – 25 – 36

    Guys I could be off slightly Yesterday posted to watch 2807 – 2809 for a bounce to a lower high to short. 2812 could be the low for the bounce 2814 is a Level 1
    JULIE

  • Julie 35 – 25 – 36

    The Banks Guys … I always watch the Banks $BKX yesterday a bearish engulfing candle. Overbought with negative divergences at top of Keltner Channel.JULIE https://uploads.disquscdn.com/images/15c51225a97a53ff878689baa652729e2edb7846f1390a1e1f602053e6faa7f4.png

  • BobbyLow

    Here is the SSDD Fed Report just in case you’re totally bored and want to read it.

    https://www.federalreserve.gov/newsevents/pressreleases/monetary20190320a.htm

    Federal Reserve issues FOMC statement
    For release at 2:00 p.m. EDT

    Share
    Information received since the Federal Open Market Committee met in January indicates that the labor market remains strong but that growth of economic activity has slowed from its solid rate in the fourth quarter. Payroll employment was little changed in February, but job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Recent indicators point to slower growth of household spending and business fixed investment in the first quarter. On a 12-month basis, overall inflation has declined, largely as a result of lower energy prices; inflation for items other than food and energy remains near 2 percent. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.

    In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

    Voting for the FOMC monetary policy action were: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren.

    Implementation Note issued March 20, 2019

  • Sp00nman

    Ya the thing I don’t get is why rates have to rise. I mean we all know why they *should*, but look over at Europe and German bonds and there’s no sign of rates going higher.

  • Jason13

    Get ready to short people…

  • Julie 35 – 25 – 36

    Hi Jason Yup Getting ready to add to short probe on this bounce from 2812
    JULIE

  • Mark Shinnick

    Nice HY pop.

  • BKXtoZERO

    IYR trying to close the gap I mentioned

  • https://www.youtube.com/playlist?list=PLEx52bnnbLmh2dnV_Vyq1ErXT79LSU6pT xenoson

    That’s not the important part.

    2020 projection 2.6 instead of 3.1

    The Committee intends to slow the reduction of its holdings of Treasury securities by reducing the cap on monthly redemptions from the current level of $30 billion to $15 billion beginning in May 2019.

    Beginning in October 2019, principal payments received from agency debt and agency MBS will be reinvested in Treasury securities subject to a maximum amount of $20 billion per month; any principal payments in excess of that maximum will continue to be reinvested in agency MBS.

  • zzezzezz

    I’m looking at /ES 2865-ish to short

  • ridingwaves

    be careful trying to short REITs in a low rate environment…..rates go up, short away…..

  • Julie 35 – 25 – 36

    SPX cash IMO below 2824 is confirmed short
    JULIE

  • Jason13

    If you’re a Zero sub…just keep watching it til (if at all) a signal comes in. Safest way to play it.

  • Julie 35 – 25 – 36

    Be Careful Bulls $BKX (Banks) have not participated in the SPX bounce retracing 61.8% off the 2812 low Shown $BKX 10 min chart JULIE

  • Julie 35 – 25 – 36
  • BobbyLow

    Julie, as of this moment there’s not enough weakness to throw me off my long position in Financials. However, we should be able to see relatively soon if today’s retracement from yesterday’s high is a pause and simple digestion or indigestion of that high and a sign of more weakness to come.

  • BKXtoZERO

    Flatted TVIX 1R 25.6…. Holding 1R for now…see how day ends

  • Julie 35 – 25 – 36

    SPX watching approx 2844 for a reversal
    JULIE

  • kim

    ladies, what’s going on?

  • ridingwaves

    their revenue modeling on yield instruments is getting a little readjustment with dovish fed…down move looks close to bottom to me… https://uploads.disquscdn.com/images/5253ef6c3c72a02f476e8411c736cd1a940f05015fcf9f89d4a7c664daceb232.png

  • kim

    what makes you think it won’t go ATH first? Why tape would stop at 2865?

  • BKXtoZERO

    Actually this entry was from yesterday 26.2 so dingsville again.

  • Julie 35 – 25 – 36

    2844.01 Julie could be only .01 off
    JULIE

  • Jason13

    Low risk short entry here, stop just above 2850..

  • Julie 35 – 25 – 36

    Jason I just added to short probe 2844 was a level I was watching
    JULIE

  • Mark Shinnick

    ….while OPM capital has become cheaper.

  • Julie 35 – 25 – 36

    The Banks … The Banks .. The Banks … SPX not going up without The Banks …Love it !
    JULIE

  • BKXtoZERO

    Tomorrow probably….BKXto1000

  • Julie 35 – 25 – 36

    Hi BK Rainier Bank in Seattle to “Zero” LOL!
    JULIE

  • ridingwaves

    I think the long winter is getting to you….some low land critter hunting will help with your hunger lady cougar……

  • https://evilspeculator.com Sir Mole III

    Hey guys – I just got back into Valencia after an arduous 12 hour journey. I took the most amazing pictures which I’ll put up this weekend as it’s unrelated but just in case anyone is interested.

  • https://evilspeculator.com Sir Mole III

    Hey Jason – how’s the tape treating you?

  • https://evilspeculator.com Sir Mole III
  • Julie 35 – 25 – 36

    Hi RW Doing great GDX short I let my stop take me out on remaining 1/2 position Nice profit Spring has not sprung in the Big Sky yet
    JULIE

  • Julie 35 – 25 – 36

    Wonderful Chief Looking forward to pictures Thanks for letting TG substitute
    JULIE

  • ridingwaves

    any move down will not last long…..best to follow the trend….SPX support is now at 2818-20

  • BKXtoZERO

    Yes!

  • Julie 35 – 25 – 36

    RW Watching for a bearish close below the daily 5 ema approx 2825. I have 2825.59 as an important level. RW Time for a correction
    JULIE

  • Julie 35 – 25 – 36

    SPX IMO Time for the correction.. Initial target 2735 Also 2609 Yup !
    JULIE

  • kim

    do you ever think long with SPX 😀 just wondering

  • Ronebadger

    Good call!

  • BobbyLow

    Got enough weakness so I’m now net short Banks and full short Bio. If things change so will I. 🙂

  • Ronebadger

    Bonds are crankin’ !

  • Sp00nman

    Jason, This is one of those days that zero confuses the hell out of me. I see some strong selling (and buying) on the tape today but zero doesn’t register it..?

  • Julie 35 – 25 – 36

    Yup RB As you and I have been posting and to watch.Red Flag Bonds up Bond market 7 times equity market Bond market usually gets it right
    JULIE

  • Julie 35 – 25 – 36

    I trade both ways. I did miss most of the advance from December 26th i.e. sitting out. As the Chief says when in doubt being in cash is a trade and strategy too. Did not lose a thing Made a ton shorting from the 2940 high
    JULIE

  • Jason13

    There’s really been no healthy pullback to go long these last two months. I’m sure we’d all be long if those lower risk entries (for swing traders at least) were there. They simply weren’t. Until today, I saw no entry (long or short) that I could be comfortable with so I went to other markets as I’m sure Julie did too. This is a tweet driven, QE, money-cheap driven push….with the same potential of a black swan event as a uninterrupted low volume ramp. Best to be cash or in something else 98% of the time. Pick your spots, be patient. Plan for it. Either way, healthy markets have healthy corrections. will this be one? Who knows but we saw an opportunity today and we seized it. We’re both already green, no doubt and can move stops to B/E now.

  • Jason13

    Meant also to say, there is nothing healthy about today’s market or economic environment.

  • Jason13

    Yeah agreed. Zero wasn’t strongly signalling but there was enough of a shift in selling strength at the right time (one hour before closing) where I thought the risk was worth it. We now need follow through to make this more than a one day trade. I’m hoping for at least a 3-5 week correction.

  • Julie 35 – 25 – 36

    Like you Jason was waiting for a pullback to go long but never materialized. So I waited and monitored like you. Patience we have Jason. Made some (just several) individual short term trades Nothing wrong Jason being mostly in cash and waiting.ala Jesse Livermore and the Chief. Our Chief will pick his spot too
    JULIE

  • Jason13

    Great in Platinum, Wheat (finally), not Palladium (bitch) and now S and P where I’m happy enough. Thanks for asking.

  • kim

    I guess it’s doable, but right now long is much more favorable, at least in my time frame, yours must be different. https://uploads.disquscdn.com/images/85e5f417d074ef8644de4420b015f6b9e5fbcc02e6daecce16ce3abf39d79640.png

  • kim

    i guess it never was, never will be… Didn’t read all of comments, what entry you see today?

  • Julie 35 – 25 – 36

    SPX Red X marks target for correction i.e approx 50% retracement and lower cloud boundary JULIE https://uploads.disquscdn.com/images/b1d8c8f286bf9b6fdffe49c603c59c824f4b4f7f9ddde1e67beff559d668521f.png

  • Ladywandering

    Out of all the great things you wrote about, this is what keeps rolling over in my mind.

    Touching briefly on some of the comments I saw yesterday, some of the discretionary traders are hung up at picking direction. If you’re an Aim And Shoot chart trader, direction should have simple mechanical rules. Leave the discretionary part to picking entries and exits.

    This is me. I look forward to what Mole is alluding to.

  • BKXtoZERO

    You talked me back into an extra .5R TVIX, same 25.6. Had 2, sold 1, bought back half. Very hard trying to mount this animal. Busy day for me. I bought another guitar at 11AM, then had 2 meetings (which sucked) but I had the phone open.

  • http://gerb-reloaded.blogspot.com Gold_Gerb
  • http://gerb-reloaded.blogspot.com Gold_Gerb

    I envisioned you rolling around in cat-nip.
    XLF & BKX was dying today.

  • Jason13

    Generally for me I wait after the first initial significant drop (yesterday) and watch the inevitable move back up. If its tied to a significant news day (FOMC), I will always wait out first move and fade it (using Zero of course). Everything was overbought on all time scales. The zero gave me a small glimpse of selling at a good amount of time prior to close…Cumulate all those factors, I saw a good opportunity.

  • https://evilspeculator.com Sir Mole III

    I think we covered this topic on many occasions. Only retail traders care about direction really. Pros on the other hand seek out edges that either statistical or exploit volatility (realized and/or implied) as it is much easier to predict via various algos. A very trivial example of this is when I put up binary setups where I am long e.g. the USD/JPY and short gold – or the inverse. Most recently I was able to squeeze out a winner on both legs actually. Or I look at an inflection point and decide to go long > a threshold and short < another – very simple play. OR I may take advantage of expected volatility crush post earnings by selling calendar spreads. I actually did a cool post on this a few years back:

    https://evilspeculator.com/lets-crush-some-volatility/

    Quite frankly – re-reading my post I'm a bit surprised that these types of questions still come up. I'm not trying to be an ass here or attack anyone in particular. My point is that I have ALWAYS encouraged everyone to get away from chasing either the bull or the bear. Nevertheless a large pecentage of the dialog I see here revolves around where the ES or other key symbols are heading in the short term. Which is silly as it price direction HIGHLY UNPREDICTABLE.

    Do you get my point? Do you get Tony's point? In different ways we are saying the same thing from a different perspective. I am not a prop trader (yet) – I would personally rate myself as a semi-pro who has thus far shied away from making the transition into trading for a firm. A major aspect of that is the fact that I like my independence and ability to work from abroad. Anyway different topic.

    But where we both are in sync is that we realized (independently after years of chasing that tiger's tail) that price direction is almost impossible to predict and that there are much easier and reliable long term edges out there. Now those are not glamorous to the least and directly orthogonally positioned to 'I called AAPL's earnings and banked 50R after backing up the truck'.

    Hope this sheds some new light on that topic. If not clear please ask away.

  • Ladywandering

    Thanks, and I do get your points. What struck me as I have been following my rules, I realize I still quietly am picking a direction. This is a long process for me to get this out of my thought process and I do credit you for helping in this. I didn’t read that post so I am going back to read it and the last few by trading gangster. I don’t think in terms of becoming a pro trader but want to be an efficient trader.

  • Darkthirty

    You know what happened to Jesse…………

  • BobbyLow

    I wonder if some of this is a question of semantics. I have simple mechanical rules as well. I look at a chart and price is either going up or it’s going down within my particular time frame. I don’t call tops and I don’t call bottoms. Instead, I look for strength and buy it and I look for weakness and short it. I don’t pick directions the direction is already picked for me. My system has the potential for doing about 95 R a year if executed perfectly and I follow my own rules. Even if I’m able to capture 2/3 of this potential I’ll have a good year. KISS. The key is not to let outside noise shake me off my plan.

    I try to keep it simple and most importantly here are certain things that I’ll probably never be able to do in the trading frontier. As Clint said:

    https://www.youtube.com/watch?v=S4lvLBe6fsE

  • Ladywandering

    Thanks Bobby, my mind just gets boggled by what people can do these days with information, I have to remember my system works for me and KISS. I think I need that tattooed on my hand. I over complicate things. I like the strength and weakness terms I will have to work on that.

  • BobbyLow

    Another thing that can get very confusing when talking about particular trades is people can be using different time frames. I believe it’s possible for every time frame to tell a different story so much so that two people can be on opposite sides of a trade and both be correct. There are some who rely on the daily for guidance and some might even rely on a slower time frame. Then there are some that are trading 5 Minute VWAP etc.,or even faster. The only time frame that really matters to me is the one I’m trading. Whenever I factor other time frames into my trades other than my boss time frame that I’ve back tested, forward tested and proved that it works for me, it clouds my thought process and makes me hesitant to take action.

  • Sp00nman

    Wow, I just followed that link which led me to more links and they are GREAT posts I never knew existed!?! I think you need to create a “greatest hits” of Sir Mole posts for newcomers.. I wonder what else is hiding in the digital lair..

  • https://evilspeculator.com Sir Mole III

    A ton of stuff there for sure. This is actually something that really irks me about the blog concept – you write a great post for the ages and after one day it sort of disappears from view. Which in fact has been a main incentive for building another platform.

  • https://evilspeculator.com Sir Mole III

    Because it is so pervasive. We are all herd animals and if you see everyone do one thing it’s super easy to fall prey to that some bias. Do you remember how much grieve I got for not backing up the truck at various rips – one guy in particular was repeatedly ridiculing and attacking me in the comment section. Where is that clown now? Probably broke cleaning plates for a living as all of his February puts expired worthless.

  • Sp00nman

    I would agree. I don’t think people here care about direction in the way that Sir Mole thinks we do exactly. Maybe there’s a lack of “sophistication” in the way that some of us trade according to him, and I wouldn’t disagree, but I don’t think we’re looking at a Magic 8 ball and picking a direction. We look at price levels (and breakouts or breakdowns), moving averages, sentiment, etc. to give us a “perspective” whether we should be long or short.

  • https://evilspeculator.com Sir Mole III

    I hope you are right! 🙂

  • Sp00nman

    Yes, it’s definitely a big drawback. For those of us that are relative newcomers, there’s a wealth of knowledge that we simply won’t come across unless we spend a lot of time digging through old posts.

    To touch on your point above, I don’t think people here care about direction in the way that maybe you think we do. Maybe there’s a lack of “sophistication” in the way that some of us trade, and I wouldn’t disagree, but I don’t think we’re looking at a Magic 8 ball and picking a direction. We look at price levels (and breakouts or breakdowns), moving averages, sentiment, etc. to give us a “perspective” whether we should be long or short.

    I’ll use myself as an example, the 80/140 daily ema cross I like to use as a gauge of what phase the market is in on a longer timeframe. Generally, when the 80 is under the 140, I have a bearish bias, when it’s over I’m bullish. With that said, I’m not blindly bullish/bearish based on that one MA cross (for obvious reasons). For what I see now, a break under the ~2810 level on ES makes me more bearish now that a larger retrace could be in play. The problem for retail traders is the lack of a defined edge with rules and too much discretion (myself included).

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

    Daam, I am so cynical – I must be getting old.
    Not that I don’t believe a trading and programming prowess of our new esteemed poster. I do…
    BUT
    Few years ago I signed up with prop trading firm here, outside Philadelphia.
    I quit before trading began due to my believe that The Firm had one sole purpose – to disconnect me from my 20K deposit asap by pushing me into high-leverage strategies. All i had to do is to take a 20K hit on a 2mil account – and I’m OUT. And if I make any money – they take half. And the fees.

    I have a question for Tony:
    being math wis and all that, does it bother you that due to insane leverage, overdependence on technology and automation, involvement of other parties, connectivity issues and other factors completely out of your control – smart man as you are must see these difficulties quite clearly – does it bother you that mathematically, one day, you will lose more money than conceivable, possible more than your entire account, may be even more than you made in your entire trading life?

    How do you deal with this skeptical, but very practical concern?