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07Feb
How to make money during high inflation and high interest rates inviroments

How to make money during high inflation and high interest rates inviroments

The impact of rising interest rates on a particular investment strategy can vary depending on various factors, including the type of assets being invested in, the specific strategy being used, and the overall economic conditions.

Generally, rising interest rates can have a negative impact on bond prices, as higher yields from newly issued bonds become more attractive to investors relative to existing bonds with lower yields. This can result in declining bond prices and potentially negative returns for bond investors.

On the other hand, rising interest rates can be beneficial for some types of equity investments, such as financials and utilities, which may benefit from the increase in lending and borrowing rates.

It is important to consider the potential impact of rising interest rates on a particular investment strategy and to regularly monitor and adjust the portfolio as needed to align with changing market conditions.

It is also important to keep in mind that past performance is not indicative of future results, and that investing always involves risk, including the possibility of losing money.

 

Making money in high inflation and high interest rate environments can be challenging, but it can be done through a well-thought-out investment strategy. Here is a general strategy that may help:

  1. Diversification: Diversifying your investments across different asset classes, such as stocks, bonds, commodities, and real estate, can help to mitigate the impact of inflation and interest rate changes on your portfolio.

  2. Inflation-linked investments: Consider investing in inflation-linked bonds, which are bonds that pay a yield linked to inflation, or in commodities such as gold, which may benefit from rising inflation.

  3. Real assets: Real assets, such as real estate and infrastructure, can also benefit from inflation as the value of these assets may increase with rising prices.

  4. Financials and utilities: Financials and utilities sectors can potentially benefit from rising interest rates, as they may earn higher returns on their lending and borrowing activities.

  5. Active management: Consider actively managing your portfolio to take advantage of market changes and make adjustments as needed.

It is important to keep in mind that investing always involves risk, including the possibility of losing money. Additionally, investing strategies that have worked in the past may not necessarily be effective in the future. It is important to regularly monitor the performance of your investments and make adjustments as needed.

It is advisable to consult a financial advisor before making any investment decisions.

 

Here are ten potential strategies for investing in a high inflation and high interest rate environment:

  1. Diversification: Spread your investments across different asset classes, such as stocks, bonds, commodities, and real estate, to reduce the impact of inflation and interest rate changes on your portfolio.

  2. Inflation-linked bonds: Consider investing in inflation-linked bonds, which pay a yield linked to inflation, to hedge against rising prices.

  3. Commodities: Invest in commodities such as gold, which may benefit from rising inflation.

  4. Real assets: Real assets, such as real estate and infrastructure, can also benefit from inflation as the value of these assets may increase with rising prices.

  5. Financials and utilities: Consider investing in financials and utilities sectors, which can potentially benefit from rising interest rates.

  6. Emerging markets: Emerging market countries, which often have higher growth potential, may also benefit from rising inflation and interest rates.

  7. Active management: Consider actively managing your portfolio to take advantage of market changes and make adjustments as needed.

  8. Short-term investments: Consider investing in short-term debt instruments, such as Treasury bills, which may offer higher yields in a rising interest rate environment.

  9. Dollar-denominated investments: Consider investing in dollar-denominated assets, as a strong dollar may provide a hedge against inflation and a rising interest rate environment.

  10. Alternative investments: Consider alternative investments, such as private equity or hedge funds, which can offer diversification and potential protection against inflation and interest rate changes.

It is important to keep in mind that investing always involves risk, including the possibility of losing money. Additionally, investment strategies that have worked in the past may not necessarily be effective in the future. It is important to regularly monitor the performance of your investments and make adjustments as needed.

It is advisable to consult a financial advisor before making any investment decisions.

05Feb
Trading  room  keyboards

Trading room keyboards

 

 

The evolution of specialized trading keyboards can be traced back to 1981 when Bloomberg first introduced these innovative devices. At the time, the keyboards were connected to control rooms via cables and were equipped with basic features such as a trackball, speaker, microphone, and headphone jacks. Over the years, the design of these keyboards underwent significant advancements, such as the addition of wireless infrared connection, biometric authentication, message boxes, and multimedia functions. By the 1990s, trading keyboards looked similar to regular keyboards with highlighted hotkeys. Today, Bloomberg keyboards continue to adapt to changing customer preferences with updated features, while maintaining a similar appearance to regular keyboards.

 A look back: The Bloomberg Keyboard | Insights | Bloomberg Professional  Services

The Bloomberg Keyboard is a specialized keyboard that has been specifically designed for traders. Developed by Bloomberg L.P., one of the world's largest financial software, data, and media companies, the Bloomberg Keyboard has been a popular choice among traders since its inception in 1981. The initial version of the keyboard was connected to a control room via a special cable and featured a Trackball, speaker, and jacks for microphone and headphone. Over the years, the keyboard has undergone several upgrades and now features infrared radiation for wireless connection, biometric authentication, message boxes, and multimedia functions.

In the 1990s, the Bloomberg Keyboard looked similar to regular user keyboards, but with highlighted hotkeys, making it easier for traders to access the functions they needed quickly. Today, the Bloomberg Keyboard resembles a regular keyboard, but with updated features that cater to changing customer preferences.

The Bloomberg Keyboard is designed to allow traders to perform specific functions with a single button press, increasing their speed and efficiency. The keyboard is customizable, allowing traders to configure it to their individual needs, and is often considered to be one of the best specialized trading keyboards available. The cost of the Bloomberg Keyboard starts at around $300.

In conclusion, the Bloomberg Keyboard is a specialized trading keyboard that offers several advanced features to help traders make the most of their trading activities. While it may be more expensive than a standard keyboard, it offers the convenience of executing multiple actions with just one button press, making it a popular choice among traders.

Bloomberg Keyboard Financial Trading Sea100 for sale online | eBay

 

In the fast-paced world of trading, having the right technical equipment is as important as having the right skills and knowledge. Components such as a computer, software, and multiple monitors, amongst others, play a crucial role in the success of a trader. To enhance efficiency and speed, specialized trading keyboards are available that perform specific functions with the press of a button. Customizable configurations allow traders to tailor the keyboard to their individual needs.

While specialized trading keyboards can be helpful, they are not a requirement, and traders may choose to use a standard keyboard with programmed hotkeys or even a mouse, based on their comfort and convenience. There are also keyboards that feature built-in touchscreens for controlling multiple devices, although they can be expensive and may not be accessible to all traders.

Some companies specialize in producing equipment for traders, such as Bionic Trader Systems, which offers the Keyboard Trader – a customizable keyboard with various functions at the touch of a button. Other specialized keyboards, such as the WEY MK06/RAY06 and the TradeMaster, also offer unique features such as built-in touchscreens and modular configurations.

When choosing a trading keyboard, it is essential to consider factors such as cost, ergonomics, size, backlighting, and connectivity options, in addition to personal needs and preferences. Specialized trading keyboards provide the advantage of modularity and the convenience of executing multiple actions with just one button press, but may not be the best option for everyone. Ultimately, the choice of a trading keyboard should be based on individual requirements, and traders should choose what works best for them.

04Feb
How  arbitrage  traders make money?

How arbitrage traders make money?

Arbitrage traders make money by taking advantage of price differences between different markets or exchanges. They buy an asset in one market where the price is low and simultaneously sell it in another market where the price is higher, capturing the difference as profit. This can be done with stocks, bonds, commodities, currencies, or other financial instruments. The key to successful arbitrage is to act quickly to take advantage of temporary mispricings and have the ability to efficiently move assets between markets.

 

Most popular  arbitrage  strategies

 

  1. Statistical Arbitrage: This strategy involves identifying and exploiting price discrepancies between closely related financial instruments, such as stocks within the same industry or sector.

  2. Spatial Arbitrage: This strategy involves taking advantage of price differences between different geographic markets, such as purchasing a stock in one country and selling it in another where the price is higher.

  3. Temporal Arbitrage: This strategy involves taking advantage of time lags in price adjustments, such as buying a stock after a temporary drop in price and selling it after the price has rebounded.

  4. Conversion Arbitrage: This strategy involves exploiting pricing differences between related derivatives, such as options and the underlying stock.

  5. Merger Arbitrage: This strategy involves taking advantage of price differences that can arise from the announcement of a merger or acquisition. An arbitrage trader may buy stock in the target company, which is typically undervalued, and sell stock in the acquiring company, which is typically overvalued.

 

Biggest  arbitrage  firms

 

  1. Renaissance Technologies: A quant-focused hedge fund that uses advanced mathematical models to identify and exploit market inefficiencies.

  2. Two Sigma Investments: A quantitative investment management firm that uses cutting-edge technology and data analysis to drive returns.

  3. Millennium Management: A global hedge fund that uses a multi-strategy approach, including arbitrage strategies, to generate returns.

  4. Citadel Securities: One of the largest market makers in the world, Citadel uses algorithmic trading and other strategies, including arbitrage, to generate profits.

  5. Point72 Asset Management: A multi-strategy hedge fund that uses both traditional and quantitative investment strategies, including arbitrage.

It's worth noting that the size and relative importance of these firms may change over time, and there may be other significant arbitrage firms that are not listed here.

 

Books  about  arbitrage  trading

  1. "Arbitrage Theory in Continuous Time" by Tomas Björk: This comprehensive textbook provides an in-depth look at the mathematics and concepts behind arbitrage in continuous time markets.

  2. "The Mathematics of Arbitrage" by Frederi G Beirbäck: This book provides a mathematical approach to understanding the key concepts and techniques used in arbitrage trading.

  3. "The Handbook of Fixed Income Securities" by Frank J. Fabozzi: This comprehensive reference provides detailed information on a variety of fixed income securities and strategies, including arbitrage strategies.

  4. "Pairs Trading: Quantitative Methods and Analysis" by Ganapathy Vidyamurthy: This book provides a detailed look at the mechanics and mathematics of pairs trading, which is a popular form of statistical arbitrage.

  5. "Hedge Fund Market Wizards" by Jack D. Schwager: This book features interviews with successful hedge fund managers, including several who use arbitrage strategies to generate returns.

 

23Jan
How  Sales traders make money in Fixed Income

How Sales traders make money in Fixed Income

Fixed income sales traders make money by buying and selling fixed income securities, such as bonds, on behalf of institutional clients. They typically work for investment banks or large financial institutions.

  1. Spreads: Sales traders make money by earning a spread, which is the difference between the price they buy a bond for and the price they sell it for. The larger the spread, the more money the sales trader makes.

  2. Commissions: Sales traders also earn money through commissions, which are fees charged to clients for executing trades. These commissions can be a flat fee or a percentage of the trade's value.

  3. Markup: Sales traders may also make money by marking up the price of a bond when they sell it to a client. This is a common practice in the fixed income market, and it allows sales traders to earn a profit on top of the spread and commission.

  4. Financing: Sales traders also earn money by financing the bonds, which means borrowing from a lender to purchase the bond and selling it with a higher price.

  5. Relationship building: Sales traders also earn money by building strong relationships with clients and providing them with valuable insights and research. This can lead to repeat business and more trading opportunities.

In summary, fixed income sales traders make money through spreads, commissions, markups, financing, and relationship building with clients. Their main goal is to buy and sell bonds on behalf of institutional clients, by doing so they make money through the difference in prices and commissions.

 

Fixed income sales traders typically communicate with clients through a variety of channels, including:

  1. Phone: Sales traders will frequently speak with clients over the phone to discuss market conditions, provide updates on trade activity, and offer new investment ideas or strategies.

  2. Email: Sales traders will also use email to correspond with clients, sending them market updates, research reports, and other relevant information.

  3. In-person meetings: Sales traders may also meet with clients in person to discuss their investment needs and provide more detailed information about specific securities or strategies.

  4. Video conferencing: With the advent of technology, sales traders also communicate with clients via video conferencing, this allows them to have face-to-face conversations with clients from different locations.

  5. Chat: Sales traders also communicate with clients through chat platforms, this is a quick way to provide updates or answer questions.

In their communication, sales traders will typically use industry jargon and terminology, they also need to be able to explain complex financial concepts in a clear and concise manner, this is important to establish trust and credibility with clients. They also need to be able to listen to clients and understand their investment needs, and tailor their communication to those needs.

In summary, fixed income sales traders communicate with clients through phone, email, in-person meetings, video conferencing and chat, they use industry jargon and terminology, and they need to explain complex financial concepts in a clear and concise manner, and also to listen and understand clients' investment needs to tailor their communication.

Fixed income sales traders communicate with research teams to sell investment ideas in the following ways:

  1. Research Reports: Sales traders will often receive research reports from the research team, which provide in-depth analysis of specific securities or market conditions. They will use this information to present investment ideas to clients and to provide them with a detailed explanation of the investment opportunity.

  2. Meetings: Sales traders will also meet with research teams to discuss new investment ideas and to get a deeper understanding of the underlying market conditions. These meetings will allow them to ask questions and get additional insights on the research team's analysis.

  3. Conference Calls: Sales traders may also participate in conference calls with the research team, where they will discuss market conditions and new investment ideas. This allows them to get real-time updates on the markets and to ask questions of the research team.

  4. Email: Sales traders will also use email to communicate with research teams, this is a quick way to ask questions or request additional information.

  5. Chat: Sales traders also communicate with research teams through chat platforms, this is a quick way to provide updates or ask questions.

In their communication, sales traders need to be able to understand the research team's analysis and be able to explain it to clients in a clear and concise manner. They also need to be able to identify potential investment opportunities and tailor their communication to the specific needs of clients.

In summary, fixed income sales traders communicate with research teams through research reports, meetings, conference calls, email, and chat. They use this information to present investment ideas to clients and provide a detailed explanation of the investment opportunity. They need to understand the research team's analysis and be able to explain it in a clear and concise manner, also they need to identify potential investment opportunities and tailor their communication to the specific needs of clients.

 

23Jan
How math can help in trading

How math can help in trading

Math plays a crucial role in trading by helping traders and investors analyze and make sense of market data. Some of the ways math is used in trading include:

  1. Technical Analysis: Technical analysis uses mathematical tools and techniques to identify patterns and trends in historical market data. This includes using indicators such as moving averages, relative strength index (RSI), and Bollinger bands to make predictions about future price movements.

  2. Algorithmic Trading: Algorithmic trading uses mathematical models to analyze market data and make trades. These models are designed to identify profitable trading opportunities and make trades quickly and efficiently.

  3. Risk Management: Math is used to calculate and manage risk in trading. This includes using mathematical models to identify and hedge risks, such as value at risk (VaR) and expected shortfall (ES), and to calculate the risk-reward ratio of a trade.

  4. Portfolio Optimization: Math is used to optimize a trader's or investor's portfolio. This includes using mathematical models to determine the optimal mix of assets to maximize returns while minimizing risk.

  5. Statistical Arbitrage: Statistical arbitrage uses statistical methods to identify inefficiencies in the market and exploit them. This includes using techniques such as cointegration, which looks for pairs of stocks that have a statistical relationship and profit when the relationship deviates from its mean.

  6. Machine Learning: Machine learning uses mathematical models to analyze and learn from market data, and make predictions about future price movements.

In summary, math plays a crucial role in trading by providing traders and investors with the tools and techniques they need to analyze market data, make informed decisions, and manage risk.

One example of a math-based trading strategy is using a moving average crossover to identify buy and sell signals.

  1. The strategy involves plotting two moving averages on a price chart, a short-term moving average (e.g. 20-day) and a long-term moving average (e.g. 50-day).

  2. A buy signal is generated when the short-term moving average crosses above the long-term moving average. This indicates that the short-term trend is bullish and that the stock is likely to continue to rise.

  3. A sell signal is generated when the short-term moving average crosses below the long-term moving average. This indicates that the short-term trend is bearish and that the stock is likely to continue to fall.

  4. The trader can use the moving average crossover strategy in conjunction with other technical indicators, such as the Relative Strength Index (RSI) or the Stochastic Oscillator, to confirm the buy or sell signal and filter out false signals.

  5. Risk management is important in this strategy, the trader should set stop loss orders to limit their potential losses.

This is just one example of a math-based trading strategy, and it's important to note that past performance is not a guarantee of future results. Traders should always conduct their own research

 Most successful traders in the financial industry who have used mathematical and quantitative methods to inform their trading decisions. Some of the most notable include:

  • James Harris Simons, founder and former chairman of Renaissance Technologies. He is a mathematician and hedge fund manager who has achieved exceptional returns using quantitative strategies.

  • Kenneth Griffin, founder and CEO of Citadel LLC. He is a billionaire hedge fund manager who uses mathematical models to inform his trading strategies.

  • Paul Tudor Jones, founder of Tudor Investment Corporation. He is a hedge fund manager who uses technical analysis, a method that uses mathematical formulas and chart patterns, to inform his trading decisions.

  • David Shaw, founder of D. E. Shaw & Co. He is a computer scientist and hedge fund manager who uses quantitative strategies and complex algorithms to inform his trading decisions.

  • Peter Thiel, founder of Palantir Technologies, he is a successful entrepreneur and venture capitalist who uses quantitative strategies for his investments.

  • Ray Dalio, founder of Bridgewater Associates, He is a successful hedge fund manager and investor who uses quantitative strategies and economic principles to inform his trading decisions.

These individuals have achieved exceptional returns and have been widely recognized as some of the most successful traders in the financial industry.

It worth to mention that there are many other successful math traders that have used quantitative methods to achieve success in the financial industry.

23Jan
Steven Cohen  trading  strategy explained

Steven Cohen trading strategy explained

Steve Cohen is a hedge fund manager and the founder of Point72 Asset Management. He is known for his aggressive, high-risk trading strategy that has led to significant returns for his investors.

Steven A. Cohen is an American hedge fund manager, businessman and philanthropist. He is the founder and current Chairman of Point72 Asset Management, a hedge fund company.

Cohen began his career in the financial industry in 1978 as a trader at Gruntal & Co. He then founded S.A.C. Capital Advisors in 1992, which grew to become one of the most successful hedge funds in the world. In 2013, S.A.C. Capital Advisors pleaded guilty to insider trading and paid a $1.8 billion fine. Cohen converted the firm into a family office, now called Point72 Asset Management, which manages his personal fortune and that of his employees.

Cohen is known for his investment acumen and has earned the nickname "The Hedge Fund King". He has been consistently ranked among the highest-earning hedge fund managers and is considered one of the most successful traders of all time.

Cohen is also known for his philanthropic efforts. He has donated to various charities and causes, including education, healthcare and the arts. He also established the Steven and Alexandra Cohen Foundation, which focuses on improving the lives of children and veterans.

Despite some controversies in the past, Cohen is still considered one of the most successful investors in the world, with a net worth of over $14 billion as of 2021.

 

The main elements of Cohen's trading strategy include:

  1. Event-Driven Investing: Cohen's firm, Point72 Asset Management, employs event-driven investing, which involves identifying companies that are going through significant changes such as mergers, acquisitions, or management changes. Cohen looks for companies that are undervalued and are likely to see a significant increase in value due to these changes.

  2. Activist Investing: Cohen's firm also employs activist investing, which involves taking a large stake in a company and actively engaging with management to push for changes that will increase the company's value. Cohen's firm has been known to push for changes such as cost cutting, asset sales, and management changes.

  3. Short Selling: Cohen's firm engages in short selling, which involves betting against a stock by selling shares that the fund does not own with the aim of buying them back at a lower price. This strategy can be used to profit from falling stock prices.

  4. Risk Management: Cohen's firm has a rigorous risk management process in place to minimize losses and maximize returns. The firm uses mathematical models to identify and hedge risks.

  5. Quantitative analysis: Cohen's firm uses quantitative analysis to identify profitable trading opportunities. This approach uses mathematical models to analyze market data and make predictions about future prices.

  6. Insider trading: Cohen's firm has been known for using insider information to make trades, which is illegal in most of the countries. Despite this, Cohen and his firm have been able to generate significant returns for its investors.

In summary, Steve Cohen's trading strategy is an aggressive, high-risk approach that employs event-driven investing, activist investing, short selling, quantitative analysis and a rigorous risk management process. The firm has been known for using insider information to make trades which is illegal in most of the countries. Despite this, Cohen and his firm have been able to generate significant returns for its investors.

5 Best  trading  Rules of  Steven Cohen

  1. "Be patient and disciplined in your approach to trading. Don't let emotions drive your decisions."

  2. "Do your own research and analysis. Don't rely solely on the opinions of others."

  3. "Be willing to take calculated risks. Sometimes the biggest rewards come from taking the biggest risks."

  4. "Be flexible and adaptable in your approach. Markets are constantly changing, and you need to be able to change with them."

  5. "Have a strong risk management process in place. This will help you minimize losses and maximize returns."

 

23Jan
Jim Simons Trading  Strategy  explained

Jim Simons Trading Strategy explained

Jim Simons is a mathematical physicist and hedge fund manager who is best known for his quantitative trading strategy. His firm, Renaissance Technologies, uses complex mathematical models to identify profitable trading opportunities in the financial markets.

James Harris "Jim" Simons is an American mathematician, hedge fund manager, and philanthropist. He is the founder and former chairman of Renaissance Technologies, a quantitative investment management firm.

Simons received his Ph.D in mathematics from the University of California, Berkeley in 1961. He then worked as a mathematics professor at MIT and Harvard before moving to the private sector. In 1982, he founded Renaissance Technologies, which uses mathematical models and algorithms to analyze and execute trades. The firm's flagship Medallion Fund is one of the most successful hedge funds in history, achieving an annualized return of over 30% for over two decades.

Simons is known for his investment acumen and is considered one of the most successful hedge fund managers of all time. He has been consistently ranked among the highest-earning hedge fund managers and has a net worth of over $23 billion as of 2021.

Simons is also known for his philanthropy. He has donated millions of dollars to various causes, including education, science, and healthcare. He established the Simons Foundation, which supports research in mathematics, theoretical physics, and the life sciences.

In addition to his business and philanthropic endeavors, Simons is also a patron of the arts and has donated to cultural institutions and charities. He is a member of the Board of Trustees of the Institute for Advanced Study in Princeton, New Jersey and a Trustee of the Museum of Modern Art in New York City.

 

The main elements of Simons' trading strategy include:

  1. Statistical Arbitrage: Renaissance Technologies uses statistical arbitrage, which involves identifying statistical patterns in market data and using that information to make trades. This approach looks for inefficiencies in the market and seeks to exploit them.

  2. Algorithmic Trading: Renaissance Technologies uses complex algorithms to analyze market data and execute trades. These algorithms are designed to identify profitable trading opportunities and make trades quickly and efficiently.

  3. High-Frequency Trading: Renaissance Technologies uses high-frequency trading (HFT) to make rapid trades in large volumes. This allows the firm to take advantage of small price movements in the market and make large profits.

  4. Machine Learning: Renaissance Technologies also uses machine learning techniques to analyze market data and identify profitable trading opportunities.

  5. Risk Management: The firm has a strong risk management process in place to minimize losses and maximize returns. The firm uses mathematical models to identify and hedge risks.

  6. Short-term trading: Renaissance Technologies is known for its short-term trading. The firm's flagship fund, Medallion Fund, which is open only to Renaissance employees, is one of the most successful hedge funds of all time, with returns of more than 35% per year, net of fees, since its inception in 1988.

In summary, Jim Simons' trading strategy is a quantitative approach that uses advanced mathematical models, algorithmic trading, high-frequency trading, and machine learning to identify profitable trading opportunities in the financial markets. The firm also has a strong risk management process in place to minimize losses and maximize returns. It is known for its short-term trading, which has been highly successful.

 

5 Quotes of  Jim  Simons

  1. "The most important thing is to find people who are smart, who are curious and who are willing to take risks."

  2. "The best ideas come from people who are not experts in the field."

  3. "If you're not willing to react with equanimity to a market price decline of 50% two or three times a century, you're not fit to be a common shareholder, and you deserve the mediocre result you're going to get compared to the people who do have the temperament, who can be more philosophical about these market fluctuations."

  4. "The most important thing is to be able to learn from your mistakes, and to learn from your successes."

  5. "The key to our success has been the ability to attract and retain talented people and to provide them with the tools and resources they need to be successful. We have always believed that the best ideas come from people who are not experts in the field, and we have worked hard to create an environment that encourages creativity and innovation."

 

23Jan
How  Google  trend  can  help you  in  trading

How Google trend can help you in trading

A trading strategy that incorporates the Google Trends factor involves analyzing the volume of Google searches for a particular stock or sector, and using that information to inform buy or sell decisions. Here's a more detailed explanation of how this strategy could be implemented:

  1. Identify the stock or sector you want to trade. This could be a specific company or a group of companies in a particular industry.

  2. Use the Google Trends website to retrieve the historical data of how often that stock or sector has been searched for on Google. The website provides data on the search volume for a specific term over a certain period of time. It also allows you to compare the search volume for multiple terms at the same time.

  3. Plot the Google Trends data on a chart alongside the stock or sector's price chart. This will allow you to visually compare the two sets of data and look for correlation.

  4. Look for correlation between the two charts. If the stock or sector's price tends to rise when Google search volume is high, it may indicate that investors are becoming more interested in the stock, which could be a bullish sign. Conversely, if the stock or sector's price tends to fall when Google search volume is high, it may indicate that investors are becoming less interested in the stock, which could be a bearish sign. Keep in mind that correlation does not imply causation and other factors should be considered.

  5. Use this information to make informed buy or sell decisions. For example, if Google search volume is high and the stock or sector's price is also rising, it may be a good time to buy. If Google search volume is high but the stock or sector's price is falling, it may be a good time to sell.

  6. Keep in mind that this strategy is not a guarantee of success and it's important to always use it alongside other technical and fundamental analysis. It's also important to note that Google Trends data is based on the volume of Google searches, which does not necessarily indicate buying or selling interest in a stock. Therefore, it's important to complement this data with other analysis methods. Furthermore, the strategy should be tested over a period of time and backtested to understand its performance.

 

Here's an example of how a trader might use the Google Trends factor in a trading strategy:

Let's say a trader is interested in trading the technology sector, specifically in a company named XYZ. They begin by identifying the stock they want to trade and then use the Google Trends website to retrieve the historical data of how often the term "XYZ" has been searched for on Google.

The trader plots the Google Trends data on a chart alongside the stock's price chart. They notice that the search volume for "XYZ" tends to increase before the stock's price rises, and decrease before the stock's price falls. They also notice that the search volume for "Technology sector" also tends to increase before the stock's price rises.

Based on this analysis, the trader decides to buy XYZ stock when the Google search volume for "XYZ" and "Technology sector" is high and rising. They also set stop loss order in case the trend is not confirmed.

As an example, let's say the Google search volume for "XYZ" and "Technology sector" increased significantly in the last week and the trader decide to buy the stock. In the following days, the stock's price rises and the trader decides to sell their shares and make a profit.

It's important to keep in mind that this is just an example and past performance is not a guarantee of future results. It's important to always use this strategy alongside other technical and fundamental analysis and backtest it over a period of time to understand its performance.

21Mar
Commodity Channel Index (CCI) Trading Strategy

Commodity Channel Index (CCI) Trading Strategy

 

Hello, folks today I want to show you a strategy based on Commodity Channel Index (CCI) Indicator.

 

What is the Commodity Channel Index (CCI)?

 The Commodity Channel Index​ (CCI) is a momentum-based oscillator used to help determine when an investment vehicle is reaching a condition of being overbought or oversold.

 

                                                         image

 

Developed by Donald Lambert, this technical indicator assesses price trend direction and strength, allowing traders to determine if they want to enter or exit a trade, refrain from taking a trade, or add to an existing position. In this way, the indicator can be used to provide trade signals when it acts in a certain way.

I will use the simple rules for the strategy:

KEY TAKEAWAYS

-IF CCI -140 ENTER LONG, IF LAST 5 HIGHS OF THE BAR BELOW EMA 20
Enter long position
-IF CCI ABOVE 140 ENTER SHORT, IF LAST 5 LOWS ABOVE EMA 20
Enter short position

STOP: 1000 USD
TAKE: 5000 USD

Instrument BTCUSD

 

image

 

This is how automated strategy is looking on the chart.

Now let’s make some magic with backtesting of the strategy.

 

image

 

As we see above during 2 years of trading strategy made over 32k USD. We can’t say that the equity performance was perfect,                                                                                                                but at least strategy showed a profit in these difficult market conditions.

Lets look at Performance summary ($)

 

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As we see above simple strategies are exist !)

The best trading strategy in the world won’t do you any good if you allow emotions to trump logic

 

PRICE: 70 USD

 

Pls contact us:  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

18Oct
BUMBERSHOOT PATTERN (INVERTED UMBRELLA)

BUMBERSHOOT PATTERN (INVERTED UMBRELLA)

BUMBERSHOOT PATTERN (INVERTED UMBRELLA) - Was created by Tokmurzin Askar as he discovered this pattern by him self after many years of trading.  This pattern signalling  for a good and strong impulse 

move and at the end it will look completely  like inverted umbrella.  

BUMBERHOOT EXAMPLE: MU US the picture above showing a perfect setup where the last move must be impule one  and confirming the pattern structure. 

25Sep
Most sophisticated Institutional trading algorithms for market-making, order execution and trading.

Most sophisticated Institutional trading algorithms for market-making, order execution and trading.

Today we want to show the most sophisticated Institutional algorithms that is used by large institutional clients for market-making, order execution and trading.  

 

EXECUTION ALGORITHMS FOR MAKING LESS IMPACT TO MARKET

Iceberg (Iceberg)

An algorithm that dispenses orders . Of the true order quantity, only a part is shown on the board, and when the order placed on the board is executed, the next order is placed.

Stealth


Don't put your order on the board, but take it when you get an order for the price you want to buy on the board.

Pegging

An algorithm that places a limit order that is a certain value or a certain percentage away from the best quote, and follows it when the best quote fluctuates . Sometimes used for market making.

Layering

Place limit orders distributed across multiple prices in order to take a high priority position within each price .

Liquidity Driven Order

Monitor the liquidity of the board and place an order when the liquidity exceeds a certain level.

SOR (Smart Order Rouiting)

Place orders from multiple markets to the best market.

 

 BENCHMARK EXECUTION ALGORITHM-AN ALGORITHM THAT BRINGS THE EXECUTION RESULT CLOSER TO SOME KIND OF BENCHMARK USED BY INSTITUTIONAL INVESTORS FOR LARGE ORDERS. 

TWAP (Time-Weighted Average Price)

An algorithm that equalizes in time and places an order . Place an order by dividing the quantity you want to trade at equal time intervals.

 

VWAP (Volume-Weighted Average price)

An algorithm that aims to bring your VWAP closer to the market VWAP . In many cases , the volume is normalized by the volume distribution during the day and the quantity is sliced ​​before ordering.POW

 

POV(Percentage of Volume)

Place an order so that it accounts for a certain percentage of the market volume .

 

PI (Price Inline)

A modified version of VWAP. If the current price is smaller than VWAP, order a larger quantity, and if it is larger, order a smaller quantity.

 

MOC (Market on Close)


An algorithm that aims to bring its VWAP closer to the closing price of the market .

 

IS (Implementation Shortfall)


An algorithm that benchmarks the market price at the time of buying and selling decisions .

 

MARKET MAKING ALGORITHM-ALGORITHM USED FOR MARKET-MAKING . PLACE BOTH BUY AND SELL ORDERS ON THE BOARD.

 

See market mid-market price


Determine your order price by referring to the market mid-market price.

 

Market price interlocking


Take the limit order left behind when the board situation changes and the price moves to either side .

 

Utilization of market liquidity


If there is a large order for another participant on the board, place an order in front of it.

 

ARBITRAGE ALGORITHM-MAKE RULING BY PAYING ATTENTION TO THE DISTORTION OF THE MARKET. 

 

Same product arbitrage


If the same product is traded in multiple markets, the price difference is determined.

 

Theoretical ruling


For objects such as derivatives for which the theoretical price can be calculated according to a model such as the financial price, the price difference from the theoretical price is determined.

 

Statistical ruling


Arbitrate statistical distortions that other market participants are unaware of.

 

DIRECTIONAL ALGORITHM-PREDICT PRICE MOVEMENTS AND ACTIVELY TAKE MARKET RISK.

 

Trend Following


We will trade with the expectation that the trends that occurred at the past will continue in the future.

 

Momentum Traing


Make transactions that take advantage of short-term momentum.

 

MEAN REVERSION-TRADE THE HOPE THAT THE PRICE WILL RETURN TO EQUILIBRIUM WHEN THE PRICE FLUCTUATES TOO MUCH. 

 

Range Trading


Trade with the expectation that the price will move within a certain range.

 

News / Event Driven


Transactions are triggered by stock price movements such as corporate news and announcements of indicators.

 

MARKET OPERATION ALGORITHM-AIM TO MANIPILATE THE MARKET BY INDUCING THE OTHER PARTICIPANTS. IT MAY CONTAIN ILLEGAL ELEMENTS.

Front Running


The broker uses the order information from the customer to buy and sell in his own favor .

 

Spoofing


Place large orders at multiple prices and mislead other investors' forecasts.

 

Strike robbing (Strobing)


Placing an order on the board for a moment misleads other participants' predictions.

 

Momentum Ignition


Placing an order in a specific direction misleads other participants' predictions.

 

Stop Loss Ignition


Induce price movements by aiming for stop loss orders from other investors.

 

Push the Elephant


When there is a large order on the board that seems to be willing to buy or sell, induce a large order by updating the best quote with your own order.

 

Gaming


Update the best quote on your order and manipulate the price of the dark pool referring to the quote.

24Sep
Swing Trading With Three Indicators by Donald Pendergarst

Swing Trading With Three Indicators by Donald Pendergarst

Hello folks

Today I want to show u system of Donald Prendergast that was explained in in the December 2013 in journal "Stocks and Commodities "

Donald Pendergast

Donald Pendergast has studied technical price charts and market dynamics for more than 30 years and has had more than 1,000 articles on technical analysis, trading system development, and high-probability chart setups published at several trading/investing publications since 2008. Pendergast offers real-world trading signals for a basket of eight gold/silver mining stocks/ETFs and also offers high-quality, customized analysis for US stocks. 

 

A SIMPLE AND VISUAL SYSTEM
Here's a look at my simple, visually based "trading with the trend" system that is nonoptimized, noncurve-fitted and is a no-brainer to construct and maintain. The key ingredient for success in trading with this template is you, because there are no secret market indicators or forecasting tools that can guarantee you trading success. But this no-cost trading template that is easy to construct will help you stay on track with the mental and emotional discipline needed to learn to trade profitably. After that, you may want to further fine-tune it by obtaining education in other market dynamics like relative strength analysis, money management techniques, price cycle studies, or wave analysis.

THE RIGHT CANDIDATES
Before you begin, you first need to locate stocks and ETFs that tend to make relatively smooth, regular swing and/or trending moves (up or down, and preferably balanced over long periods of time) if you expect to achieve success with this system. In other words, look for volatile (high-beta), high-volume stocks from sectors and industry groups that tend to go on a bullish/bearish tear several times per year, and which don't spend too much time chopping around in directionless funks. Fast-moving, news-driven technology, mining, financial, or energy stocks are likely to be good hunting grounds for such desirable issues; you'll likely want to avoid sluggish markets like electric utility stocks or other highly regulated public service issues that tend to trade within small ranges most of the time.

 

 

 

UNO, DOS, TRES
The daily chart of Citigroup (C) in Figure 1 shows the three-indicator trading template; this was created using three standard indicators in TradeStation 9.1 (see Figure 2):

 A 50-day exponential moving average (EMA; blue line)
A five-day simple moving average of the daily highs (SMA; gold line)
A five-day simple moving average of the daily lows (SMA; red line)

 

The trading logic is very simple:


Long entry:

Go long when price exceeds the upper (gold) moving average of the daily highs by five ticks (0.05) and the price bar prior to the break of the upper moving average has closed above the blue 50-day EMA. (Note: If trading low-priced or high-priced stocks, you may want to decrease/increase the five-tick parameter as needed, since five ticks in a $300 stock is a much smaller entry filter amount than five ticks in a $40 stock, so adjust accordingly).
Once you are in a long trade, use the lower (red) moving average of the daily lows as your initial/trailing stop-loss for the life of the trade. Aggressive traders can use the low of the entry bar as the initial stop, but this will sometimes result in premature stop-outs and will entail extra commissions and effort; newer traders should just use the red line as the initial/trailing stop to keep things simple.

Short entry:

The rules for short entry are simply the inverse of the long entry setup.



 

MOVING FORWARD, SLOWLY
The simulated test results aren't too shabby overall; the system made money on both sides of the market, although more on the long side. The closed trade drawdown was decent, and the profit factor was exceptionally good. Winners were much larger than losers on average, and there were no "catastrophic" losing trades -- a major plus. This means the model has good overall risk control even as it allows winning trades sufficient breathing room to develop.
Of course, this is just a sample trading strategy and no one knows if it will continue to perform as well as this in the future, but you can alter it, fine-tune it, automate it, add multiple exits, or just run it as-is, being sure to select a suitable, diverse universe of stocks or ETFs to trade it with.
Try using a longer or shorter EMA as your trend-confirmation line. Consider using, for example, a 21- or 30-day EMA to generate more trading opportunities, or perhaps an 80- or 100-day EMA to slow things down a bit. You can accomplish much of the same thing by lengthening/shortening the moving averages of the daily highs and lows, too. You can even control the dollar/share allocations by limiting your maximum account risk to perhaps 2% per trade or 0.75% to 1% per trade if you are trading it with a portfolio of six or more stocks. The possibilities for further development of this system are limited only by your understanding of the financial markets, trading skills, imagination, creativity, account size, and confidence level.

 

 Original and full story:http://premium.working-money.com/wm/display.asp?art=840

 

 

22Sep
Buy and sell stocks in conjunction with President Trump's Twitter words

Buy and sell stocks in conjunction with President Trump's Twitter words

"ALGO-TRUMP"- the algorithm


One of the algorithmic trading that has become popular in recent years is to buy and sell stocks in conjunction with President Trump's Twitter words.


This is based on the fact that the stock price of a company that President Trump criticized by name on Twitter goes down, and when Prsident Trump tweeted a specific keyword, the system automatically reacts and buys and sells stocks.
In this way, it is also a feature that algorithms that match the trends of the times continue to be developed.

 

Although it is an algorithmic trading with great merits, it is not widely used among general investors because it costs a lot to introduce the system.

On the contrary, institutional investors and foreign investors who have financial power are actively using it, and it is also regarded as a problem that the gap with general investors is widening.

22Sep
Harding phenomena in behavioral  trading

Harding phenomena in behavioral trading

Harding phenomenon

 


What is the ''Harding phenomenon''?
The harding phenomenon is a word that comes from the English word "Herd" (flock), and means that human beings tend to act according to the thoughts of others and many people.    Speaking of phenomena that are familiar to us, we buy products that are in fashion, and the queues call for more queues.The Harding phenomenon is known as one of the insights in "behavioral economics", but a synonym in behavioral economics may be the "bandwagon effect".   Behavioral economics has the perspective that "humans seem to be rational and behave irrationally" and "the economy created by humans also has irrationality born from such a psychological aspect", and stock investment and economy It can be said that it is one of the academic fields that are attracting attention in economics. We can see this tape of irrational behavioral action lots of times in financial markets when we see when price makes big divergence  agains company fundamentals. 

 

Is behavioral finance useful for investment?

 

Behavioral finance is the study of the influence of psychology on the behavior of investors or financial analysts. It also includes the subsequent effects on the markets. It focuses on the fact that investors are not always rational, have limits to their self-control, and are influenced by their own biases.


An example of the harding phenomenon in stock investment is the case where the stocks being bought are bought further and the high price is renewed.  In addition, it can be said that the irrationality of the harding phenomenon was glimpsed in the bubble formation of the subprime loan market that started the Lehman shock.   

Especially if you are a beginner in investment, you may intuitively think that the stocks that are going up will go up even more, and you may buy them and grab a high price. Behavioral economics proposes that human beings have the property of "heuristics" in which they make decisions based on past experience, apart from making logical thoughts when making decisions.  For example, this heuristic works well when multiplying and when making daily habits, but when it comes to investing, that thought can be a nuisance. Emotional investment decisions that are not based on rules do not have a statistical advantage and the method does not always work.   It is often said that "90% of individual investors lose", but many of them include failures due to lack of understanding of human irrationality and psychology. Isn't it?     Then, what kind of attitude should we take in investing so that we do not lose 90%?

 

Metacognition is important


In trading, it can be said that there is no way of thinking or method that "if you do this, you will definitely win", but what is important is "metacognition".  "Meta" is a prefix that means "beyond" and "contains", and "metacognition" means "recognizing cognition."   It is confusing to write cognition as cognition, but it can be said that it refers to the state of being able to see oneself objectively, what one is thinking.
What I am doing now can only be expressed from my own experience.   However, by reading a book or learning a new concept, you will be able to express that behavior in a new way.


Behavioral economics focuses on human scientific psychology, and human psychology such as "status quo bias" and "loss effect" will help us to see our thoughts and actions objectively.
If you are an investor, you will understand that you can trade calmly when you are winning, but you will panic or your mentality will be shaken when you are losing and you will make an appropriate trade. I think you have some experience.   Of course, everyone suffers failures and losses, but in order to reflect on them and improve them, it is of course important to omit "why did they fail?"   In the process, metacognition may be useful for verbalizing and embodying failure.   How to acquire metacognition   As a way to acquire metacognition, as I wrote earlier, reading a book to acquire new knowledge and making it a habit to draw a cycle to improve one's behavior can be mentioned. It may be a good idea to notice ideas and habits that you are not aware of and try to live while being aware of how to correct them.


If you know the word "harding phenomenon", you should have the perspective of "because it is a harding phenomenon, isn't it profitable to make a contrarian here?" Can be done.  It will be possible to broaden the range of investment and thinking by not only synchronizing with the way of thinking around you, but also by firmly holding your own investment axis.   Learning the knowledge of behavioral economics, not limited to the Harding phenomenon, is useful for making investments, so it may be good to learn it.

 

  WHAT IS HARDING PHENOMENON IN TRADING? - YouTube

 

 

RISK WARNING:

Past performance is not necessarily an indicator of future performance.

These results are based on simulated or hypothetical work results, which have certain inherent limitations. Unlike the results shown in the real performance report, these results do not reflect real trading. In addition, since these transactions have not actually been completed, the results may not be adequately or excessively offset by the influence, if any, of certain market factors, such as lack of liquidity. Modeled or hypothetical trading programs in general are also subject to the fact that they are developed based on previous indicators. None of the reported system performance reports guarantee that any account will achieve the same profit or loss ratio close to those shown.

 In addition, hypothetical trading does not involve financial risk, and the indicators of a non-hypothetical trading report cannot fully take into account the impact of financial risk in actual trading. For example, the ability to sustain losses or adhere to a certain trading program, despite trade losses, is a significant factor that can adversely affect the actual results of trading. There are many other factors related to the markets as a whole or to the implementation of any particular trading program that cannot be fully taken into account when preparing hypothetical results, each of which can adversely affect the actual results of trading.

Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.