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Platypus journal

  • #41
  • Jul 23, 2009 9:04am Jul 23, 2009 9:04am
Quoting billye
P: think of it this way, draw a line of 180 day average and Jan to now.

if you keep depositing, what return do you have YtD?

it is not high.

so we have to conclude that either we did not see the real bottom, or we have not yet seen the real top.

other question, if right now is top, will economy not grow for the following 10yrs?
Lets illustrate it with crops:

How much wealth a farmer can produce each year based in his crops?

When a farmer cast down his seeds, he labor the soil, try to forecast the weather, watch for insects etc etc. But even today with a lot of technology it is impossible to avoid certain years of complete disaster due to things out of his control like too much or too little rain, etc. Even in a good year when the harvest was good, some kind of crisis or over suply can hit the market So despite the best of his efforts there is allways a certain amout of wealth he can get out of his crops.

We are in a deleverage process wich means that we came from a situation away from reality back to try to find what is real and what price really is.

How much a house that was in the market for 500 grand last year is worth now? What ever price it is, is it the real price? It is still overpriced or it is already underpriced?

The market is basically trying to find what reality is, what price is.

So in this kind of scenario we are also looking for how much wealth could be generated in relationship with the ratio of how price get corrected so far.

Thinking about where we came from, in terms of equities, real state, leverage, etc. Is it fair to think that we are ready to go back? just look around you ( here in America) have everything gone back to "normal" or should I say back to the roaring anormal last 3 or 4 years?

If not the market will reflect it. Can the Dow or S&P go back or even close to pre-crisis levels or we already generated a reasonable amount of wealth for the scenario we are in. Those levels are allways over or under shuted and people can make money long or short so I'm not preaching that we will stagnate but honestly can we climb higher?

Greed is a very strong human sentiment but fear is a lot stronger. thats why wallstreet people say that "price climbs through the stairs but comes down through the elevator".

My 2 cents
  • #42
  • Jul 24, 2009 12:19pm Jul 24, 2009 12:19pm
The market was very choppy on the 4 hour chart ( where most of my signals come from) so all that I could do was 50 pips for the whole week. Well not the first time it happens and I'm sure not the last

The important point is that while a lot of people got wiped out or will go to the weekend carrying draw downs I'm all in cash, account up, and most important of all. had another week of stress free trades.

I wish a good weekend to all, lets forget about the market during those 2 days, dedicate time to our loved ones, and come back refreshed to what the next week will bring !!
  • #43
  • Jul 24, 2009 1:37pm Jul 24, 2009 1:37pm
Quoting Platypus
The market was very choppy on the 4 hour chart ( where most of my signals come from) so all that I could do was 50 pips for the whole week. Well not the first time it happens and I'm sure not the last

The important point is that while a lot of people got wiped out or will go to the weekend carrying draw downs I'm all in cash, account up, and most important of all. had another week of stress free trades.

I wish a good weekend to all, lets forget about the market during those 2 days, dedicate time to our loved ones, and come back refreshed...
Good job. I like your style. Stress free, that sounds good. Post some charts and/or specific trading ideas once in a while if you like & I will try to learn from you.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #44
  • Jul 24, 2009 2:13pm Jul 24, 2009 2:13pm
Quoting The Fool
Good job. I like your style. Stress free, that sounds good. Post some charts and/or specific trading ideas once in a while if you like & I will try to learn from you.
Hey Fool..thanks for stopping by at my humble journal. I know you from the E/U thread and enjoy your posts.

This journal is basically to expose my fundamental ideas and some cheap chat, but I dont mind talking about my system.

My system does not have anything secret or esoteric. I use multiple time frames. Stochastics, MACD, and CCI. I also trade based on PA like pin bars, inside bars etc. I do have two proprietary PAs that helps me but they are not a big deal and if I had to trade without it I would do it with no problems.

A very importantt part of my system is based on trend lines and discipline but what makes me trade stress free is the fact that I'm doing it for a while.
I'm envolved in "Forex" since 1986, forex in cotes because I use to buy and sell acctual dollar bills in my country when I was only 16 years old. I also used to work in the Forex section of a bank ( non especulative) and it helps a little also.

Thats basically it when one understands the rules of the game the stress goes away.

Have a nice weekend
  • #45
  • Jul 24, 2009 3:04pm Jul 24, 2009 3:04pm
Quoting Platypus
A very importantt part of my system is based on trend lines and discipline but what makes me trade stress free is the fact that I'm doing it for a while.
I'm envolved in "Forex" since 1986, forex in cotes because I use to buy and sell acctual dollar bills in my country when I was only 16 years old. I also used to work in the Forex section of a bank ( non especulative) and it helps a little also.

Thats basically it when one understands the rules of the game the stress goes away.

Have a nice weekend
Well, experience is the best teacher - and you have a 30+ year head-start on me! From your posts one can tell that you have been around the game for a while, too - so I will keep tuning in. Have a great weekend.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #46
  • Jul 24, 2009 9:47pm Jul 24, 2009 9:47pm
true, but fundamental doesn't drive the market, money drive the market...

demand/greedy/fear drives money and resouce and not every time it goes to where it 'should be' in reality, and people think of what it should be differently.

so we cannot judge yet.

Quoting Platypus
Lets illustrate it with crops:

How much wealth a farmer can produce each year based in his crops?


My 2 cents
  • #47
  • Jul 25, 2009 4:38am Jul 25, 2009 4:38am
Inserted Video


Good stuff
  • #48
  • Jul 25, 2009 4:48am Jul 25, 2009 4:48am
Quoting billye
true, but fundamental doesn't drive the market, money drive the market...

demand/greedy/fear drives money and resouce and not every time it goes to where it 'should be' in reality, and people think of what it should be differently.

so we cannot judge yet.
Fundies do drive the markets since they are the originators of fear and greed. Just watch what the markets do around news time

That said , to find wich fundamentals will drive fear or greed is another thing, is sort of like finding price. You are following interest rate but what is really driving the market is oil prices, you start to watch oil but now bonds is what matters. Very rarely you will be watching the right fundamentals in the right time, just like very rarely you will be righ about the right price on the right timeframe.

All we have or can do is to try a educated guess based on fundies and technicals. In my case I trade accordly if I'm right I stay if I'm wrong I just get out
  • #49
  • Jul 25, 2009 7:14am Jul 25, 2009 7:14am
news impact forex in a significant way considering how much % of boundances vs total bounces in a year...

but bigger picture... it really depends on transaction cost and investment decision frequency...

if t/c is high and investment decision freq is low, in many places people could ignore news..

such as stocks put in retirement accounts.

I am in the process of figuring out how major market participants thinking and dealing with changes...

for example futures market bull/bear turn is much longer than forex, and stock could even longer...

Quoting Platypus
Fundies do drive the markets since they are the originators of fear and greed. Just watch what the markets do around news time

That said , to find wich fundamentals will drive fear or greed is another thing, is sort of like finding price. You are following interest rate but what is really driving the market is oil prices, you start to watch oil but now bonds is what matters. Very rarely you will be watching the right fundamentals in the right time, just like very rarely you will be righ about the right price on the right timeframe....
  • #50
  • Jul 25, 2009 11:15am Jul 25, 2009 11:15am
Quoting billye
news impact forex in a significant way considering how much % of boundances vs total bounces in a year...

but bigger picture... it really depends on transaction cost and investment decision frequency...

if t/c is high and investment decision freq is low, in many places people could ignore news..

such as stocks put in retirement accounts.

I am in the process of figuring out how major market participants thinking and dealing with changes...

for example futures market bull/bear turn is much longer than forex, and stock could even longer...
I don't think I got what you are trying to say but beyhond fundamentals, technicals, and psycology the only truth I learned from experience so far is that the markets are intrincically unpredictable, and you should trade it in terms of probability. Anything else (IMHO) is good for a nice chat nothing else
  • #51
  • Edited 11:52am Jul 25, 2009 11:19am | Edited 11:52am
Quoting Platypus
I don't think I got what you are trying to say but beyhond fundamentals, technicals, and psycology the only truth I learned from experience so far is that the markets are intrincically unpredictable, and you should trade it in terms of probability. Anything else (IMHO) is good for a nice chat nothing else
ok, what I mean for transaction cost and investment (buy-> sell) cycle

public mutual fund investment costs 2% fee for buy+sell and 1% for banks and mgr fee...

so medium profit goal for mutual fund holder is 10% or they will not sell.

they do not look at market every hour... so essentially they are monthly t/f investor, and typical bull/bear opinion change is 1 year.

you can see if for a market t/c and i/c is big&long, the bull/bear change will take long time.... in this case a news of tax change or loan doesn't mean much.

in commondity a bull/bear lasts a few month

forex is different in 2 ways, 1st ranging is small just 10% most of the year,
2nd money is borrowed so cannot hold long.... in that case a news of 1% movement seems significant.
  • #52
  • Jul 25, 2009 6:16pm Jul 25, 2009 6:16pm
Well Billye honestlly I'm a little skeptical about mathematical models used in this way, I'm more to the Austrian economics way of thinking.

Since I don't have an economics degree I did a study based in the website http://www.youtube.com/user/bionicturtledotcom, and as long as the theory is fascinating I found very little practical use for all I saw there.

Again I'm not saying you are wrong with your models but what works for me ...day by day...in my trades.... is the fact that I accept "randomness" and trade probabilities
  • #53
  • Jul 26, 2009 12:17pm Jul 26, 2009 12:17pm
Minimal wages up since friday. Is it the case that the government is trying to help you ?

Yeah right !

Inflation can't pick up without a way for wages to follow.

If prices alone go up, demand shrinks, what makes prices fall. The big boys want exactly the opposite. They want for example to hike prices to lets say 1% then raise your wages to 0.95% so they make 0.05% without have to produce more, hire more people etc, in other words the lazy bastards want to make super easy money.

When inflation picks up banks, big institutions, and people in power make a insane amount of money purely based in this kind of hidden taxation.

My country in the eighties went throught a period of hyperinflation, the government never admited it but when you go to the supermarket in the morning and buy something for a price than come back in the afternoon and the price is higher that means that you are in a hyperinflation. Well they devised a way to "protect the workers" with a trigger, every time inflation got to a certain level it will trigger a raise in wages to the same amount of the inflation.

Well I don't have to tell you that what they did was like trying to extinguish fire poring gasoline on it. They where not thinking about the people but just in keeping their easy money coming even easier.

The bank cartel we call "FED" is using well greased politicians to accomplish the same thing they did in the past in other countries.

The hard working people that can actually produce wealth will be taxed to death by inflation, created for the convenience of institutions that can't produce wealth by themselves

It is really sad but its coming folks, brace yourself.
  • #54
  • Jul 26, 2009 12:51pm Jul 26, 2009 12:51pm
I guess shoudn't be so easy coz after a certain capital entry limit,

you'll have easy access to longing realestate and commodity at leverage.

so if beating inflation is that simple, we can all rob others... reality is not.

realestate and commodity longers die last year...

many more still jump into that game with a claim of hyper inflation...

many seem to 'win' on book this year... will they survive forever?

actually living price did not rise much... that is the bottom line.

part of the crisis starts with gov fighting inflation last year, so expectation to get back to the peak price is never realistic.

Quoting Platypus
Minimal wages up since friday. Is it the case that the government is trying to help you ?

Yeah right !

Inflation can't pick up without a way for wages to follow.

If prices alone go up, demand shrinks, what makes prices fall. The big boys want exactly the opposite. They want for example to hike prices to lets say 1% then raise your wages to 0.95% so they make 0.05% without have to produce more, hire more people etc, in other words the lazy bastards want to make super easy money.

When inflation picks up banks, big institutions, and people...
  • #55
  • Jul 26, 2009 1:07pm Jul 26, 2009 1:07pm
Quoting billye
I guess shoudn't be so easy coz after a certain capital entry limit,

you'll have easy access to longing realestate and commodity at leverage.

so if beating inflation is that simple, we can all rob others... reality is not.

realestate and commodity longers die last year...

many more still jump into that game with a claim of hyper inflation...

many seem to 'win' on book this year... will they survive forever?

actually living price did not rise much... that is the bottom line.

part of the crisis starts with gov fighting inflation last...
I don't quite got what you are trying to say Billye, but when I talk about inflation I'm talking about something that I had to endure on my country since I was a pre-teen so it is not theory only.

I know by experience how it hurts in your pocket, and who makes a desgusting amount of money with this kind of taxation.

Here in america the inflationary process is still in its infancy ( even if is higher than what they say) so give it time...I already know the outcome...been there, done that....
  • #56
  • Jul 26, 2009 9:52pm Jul 26, 2009 9:52pm
Ok 2 trades so far for a total of 50 pips. Relatively small lots because I dont like sundays or fridays. I'm trading now because my last week was kind of slow, I also dropped my time frames to 30 & 15 min because the 4 hour is still too choppy to be traded

First trade was made based on the double top on the 15 minutes (no brainer) good for 29 pips, reversing my positions I took the pin bar on the 30 min and just closed for 21 pips it may go further but I really have to sleep my kids took the best of me today so I see you guys later.

Nice trades to all !
  • #57
  • Jul 26, 2009 10:12pm Jul 26, 2009 10:12pm
Quoting Platypus
I don't quite got what you are trying to say Billye, but when I talk about inflation I'm talking about something that I had to endure on my country since I was a pre-teen so it is not theory only.

I know by experience how it hurts in your pocket, and who makes a desgusting amount of money with this kind of taxation.

Here in america the inflationary process is still in its infancy ( even if is higher than what they say) so give it time...I already know the outcome...been there, done that....
I mean, if inflation is that obvious a plan, then long realestate and commodity with 2:1 leverage will easily beat it.

when everyone is talking about inflation, then we'd be cautious since if everyone follow simple formula can profit, then something is wrong.

at least I know from affordability of end customer, our previous peak of commodity price cannot get factories profitable.
  • #58
  • Jul 27, 2009 1:09pm Jul 27, 2009 1:09pm
Quoting billye
I mean, if inflation is that obvious a plan, then long realestate and commodity with 2:1 leverage will easily beat it.

when everyone is talking about inflation, then we'd be cautious since if everyone follow simple formula can profit, then something is wrong.

at least I know from affordability of end customer, our previous peak of commodity price cannot get factories profitable.
The problem is that only the "conspiracy theorists" are talking about inflation Billye. What kind of inflation are you using as a referential? ( since we are still not in a inflationary scenario yet)
  • #59
  • Jul 27, 2009 1:22pm Jul 27, 2009 1:22pm
I posted on the E/U thread last week about the big bond auction the government is supposed to do this week and next week.

More and more our government is looking like a guy that knows that his credit is screwed and is spending on his credit cards still available as much as he can because he knows that soon all doors will be closed.

Geithner and Clinton are there in China today begging for more credit. We are in the verge of a credit bubble burst. Pinpoint the precise time of the event is tough but anyone can see that is coming.

In order to keep selling bonds and extend the bubble's life they will have to screw the equity market big time, and I mean BIG time to drive people to bonds.

If the yield curve starts to again defy gravity we can be sure they will crash something in order to scare people back to tresures probably they will do it by fall.
  • #60
  • Jul 27, 2009 4:05pm Jul 27, 2009 4:05pm
Ok since the market is slow I decided to do some fib study on equities and try to correlate to E/U just to see where we could really be capped.

If we count the last big fall, lets say, on the S&P, we can see that we are not yet at the 38.2 retracement (around 1011). I believe we can hit this area first before falling again. If we manage to go further my next guess will be 1118 @ 50% fib. I also have very strong trendlines converging in this two levels (38.2 and 50%).

Any up movement of this magnitude will attract a lot of dumb money making the trend continuation down more dangerous.

The correlation to forex E/U pair would be the extension to the 161.8 (1.4550 area). I'm counting the movement from march 3 till march 19, if we get a fib study on this movement we will see that price is respecting fib levels quite well. I trade the 4 hour mostly so it does not affect me too much but I'm definately keeping on eye to see what will happen. Especially counting the fact that any extension of upward moves will make people think that the worst is over, than when fear kicks in we can have that stamped effect all over again
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