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Silent Service Method

  • #8,821
  • May 24, 2010 8:28pm May 24, 2010 8:28pm
Quoting InfinitySL
In my rush to post something positive about Copper, I neglected to see the story crude was telling...And unfortunately, it isn't a good one. We are sitting right at support ($70) - should be interesting to see where it goes.

Attachment

But on the bright side, this is a great example of how the SS Method can help your trading -- See how this thing just hit an absolute wall at $85/barrel? Hmm...

I still wonder why oil was ever up that high.....we have more of it than we know what to do with.....
  • #8,822
  • May 24, 2010 8:29pm May 24, 2010 8:29pm
Quoting VitaminBeer
Not sure if this is what you meant?

I'm waiting for the 85-86 area myself... been twiddling my thumbs.

Brady,

Yeah it was Brady. Thanks a lot man!
  • #8,823
  • Edited May 25, 2010 4:03am May 24, 2010 8:42pm | Edited May 25, 2010 4:03am
Quoting InfinitySL
Trading is a zero sum game, so I have no idea what you're talking about when you say "the non-zero-sum aspect of the game as it applies to trading". If I go long the Euro and you go short the euro, one persons win is another persons loss. Your $100 Win, plus my $100 loss SUMS TO ZERO...hence, zero sum game. If I agree to pay you interest or vice versa, my $1 in interest I pay to you is a $1 loss to me -- Zero Sum.

What is so hard to understand about my point of view?
If trading operated on a purely zero-sum basis, then no one would overcome their transaction costs. As a trader I make money by exploiting that very market inefficiency. As an investor I find that intolerable, unrealisitic and unsustainable b/c eventually there would only be one winner and everyone else the loser. The market would cease to exist b/c no new money would enter the system; goods, services and commerce would dry up. Zero-sum games are also called "strictly competitive" or win/lose scenarios for that reason.

Non-zero-sum games are win/win scenarios, and as an investor, where the advantage lies over myself as a trader. As an investor I'm looking for a return on my investment at every possible turn of the transaction. From that perpective I realize "many economic situations are not zero-sum, since valuable goods and services can be created, destroyed, or badly allocated, and any of these will create a net gain or loss." ~ Wikipedia [emphasis mine]

So from an investment standpoint, traders executing trades on the market reveals a sort of market efficiency, which I as an investor net interest on per transaction. The interest is something I manufactured, wrapped around the transaction and thereby legally create money as a result. So interest serves to stabilize and expand the market economy, which also makes it possible to pay the trader a salary. In-the-end both myself as a trader and investor, win.

Nevertheless, non-zero-sum games can be reduced to zero-sum games when considering one's account balance or despotism e.g.. However, zero-sum games cannot be reduced to non-zero-games b/c there's always an element of uncertainty to every transaction, which finally can't be predicted or quantified into price. E.g., the affects of interest rates on the economy, which are the cause of bubbles we see in the markets.

I use the perspectives of a trader and investor in the market to illustrate each theory at work. A key distinction I'm trying to make clear is that non-zero-sum includes yet transcends zero-sum. An investor hires a trader to execute a transaction in the market. A trader borrows money that the investor has lent in order to transact the trade; not the other way around. Hence why "the lender always makes more than the borrower."
  • #8,824
  • May 24, 2010 8:50pm May 24, 2010 8:50pm
Quoting clockwork71
I still wonder why oil was ever up that high.....we have more of it than we know what to do with.....
I don't think the price of oil has been driven by supply or demand since long before I was born.
  • #8,825
  • May 24, 2010 11:53pm May 24, 2010 11:53pm
Quoting Soca
A key distinction I'm trying to make clear is that non-zero-sum includes yet transcends zero-sum.
Er, what? Infinitysl, I just found a handy ignore function on the forum

If you need to quote from Wikipedia you're in trouble!
Position trader - Anything intraweek is just noise...
  • #8,826
  • Edited 4:04am May 25, 2010 1:47am | Edited 4:04am
Quoting Arfer Daily
Er, what? Infinitysl, I just found a handy ignore function on the forum

If you need to quote from Wikipedia you're in trouble!
Believe it or not, I don't have it all figured-out. If the subject is difficult I try to simplify it in order to avoid falling into a social trap or disrupting the thread. There's also a "cleanup report" button in the upper-right of each post, which I have used and will use. So if any posts of mine are in violation of this forum's rules, or if there's another issue regarding my presence in this forum's thread(s) e.g., please report me.

That said, what I was trying to say Arfer Daily is that both non-zero-sum and zero-sum perspectives work in the marketplace. It just depends on one's vantage point, whether looking at the market through the lens of a capital gains oriented trader or a cashflow oriented investor. And that they depend on one another in order to make/create money.

What's more clear to me now, thanks to InfinitySL's prompt, is that we traders essentially view the market as a zero-sum game. (I.e. a win/lose opportunity to give or take money.) Whereas an investor essentially views the market as a non-zero-sum game. (I.e. a win/win opportunity to create money.) The investor is the lendor and the trader is the borrower in any given transaction. Bank rules state that the lender always makes more on the transaction than the borrower. In other words, investor non-zero-sum rules limit trading to a zero-sum game, which isn't an easy pill to swallow evidently.

I hadn't clearly differentiated them until my latter post, which wasn't intentional. Not everyone here has made the choice to be an investor, let alone a trader and that's okay but why not have the best of both worlds? First thing, then, I'd say is to invest in your financial education. Learn more about it, if you're not already, b/c it directly affects your bottomline as a trader more than you may realize. I suggest Robert Kiyosaki's book, "Rich Dad/Poor Dad" for starts. Thanks!
  • #8,827
  • May 25, 2010 2:51am May 25, 2010 2:51am
http://www.forexfactory.com/showthread.php?t=238055

Cheers
  • #8,828
  • May 25, 2010 2:54am May 25, 2010 2:54am
Quoting Arfer Daily
Why call a spade a spade when you can call it a long-handled excavation implement?
You can do that, I mean, with a card? That's magical. Why work harder when you can work smarter indeed! The power of leverage
  • #8,829
  • May 25, 2010 4:07am May 25, 2010 4:07am
Quoting 4xAddict
http://www.forexfactory.com/showthread.php?t=238055

Cheers
Highly recommended
  • #8,830
  • May 25, 2010 5:34am May 25, 2010 5:34am
Quoting Low
I don't think the price of oil has been driven by supply or demand since long before I was born.

Not too mention that we are still having issues finding places to store the stuff. Anytime you have way too much of something, prices eventually fall. No matter who is trying to prop it up.

Supply and demand can be the great equalizer after all. Of course, you have to have enough time and/or money to wait out the markets if you are short on a trade like this and early......ugh. Thankfully I was not one of those people, who are certainly breathing a sigh of relief now.
  • #8,831
  • May 25, 2010 5:35am May 25, 2010 5:35am
I have this pair GBPCAD on my Radar....i think the chart speals for itself........anyone watching this too.....cheers
Attached Image (click to enlarge)
Click to Enlarge Name: gbpcad (daily).gif Size: 22 KB
  • #8,832
  • May 25, 2010 5:41am May 25, 2010 5:41am
I am watching the Queen address the House Of Lords right now, and I must say, the old bird can make them behave. I think this is the first time I have seen these jokers not yell and make fun of each other at a sonic level at least as loud as a Metallica show. Of course, Taiwan has it right - they actually fistfight (I wish Congress would do this.) and sometimes even use martial arts on each other.

Long live the Queen.....and Prince Phillip looks hammered. He is my hero. I wish we had one of those in the USA. You Brits have a real gem in that man. lol
  • #8,833
  • May 25, 2010 5:44am May 25, 2010 5:44am
Quoting Danku
I have this pair GBPCAD on my Radar....i think the chart speals for itself........anyone watching this too.....cheers
I am attaching an oil chart, because of this - I might be a little gun shy about buying the CAD at the moment. However, with a good bar at that level - I would consider shorting.....
Attached Image (click to enlarge)
Click to Enlarge Name: oil.png Size: 34 KB
  • #8,834
  • May 25, 2010 5:55am May 25, 2010 5:55am
I do not like that bearish break.....but let me wait and see when it gets to 1.5600 Resistance Area........then i will also look at an Oil Chart.....cheers Chris as always.......

Quoting clockwork71
I am attaching an oil chart, because of this - I might be a little gun shy about buying the CAD at the moment. However, with a good bar at that level - I would consider shorting.....
  • #8,835
  • May 25, 2010 6:12am May 25, 2010 6:12am
Looks like I added to my eurnzd trade at exactly the right time. Why don't all trades go this way?
Attached Image (click to enlarge)
Click to Enlarge Name: eurnzd hourly 25 05 2010.gif Size: 36 KB
Position trader - Anything intraweek is just noise...
  • #8,836
  • May 25, 2010 8:41am May 25, 2010 8:41am
We just broke through a bullish weekly pinbar at 110 support. Bad news for this pair. I have support at 105. We will see how this goes.....it is certainly bad, but as you know - the market will do what it wants.
Attached Image (click to enlarge)
Click to Enlarge Name: ej1.png Size: 40 KB
  • #8,837
  • May 25, 2010 8:41am May 25, 2010 8:41am
Quoting Arfer Daily
Looks like I added to my eurnzd trade at exactly the right time. Why don't all trades go this way?

You mean they don't?
  • #8,838
  • May 25, 2010 8:42am May 25, 2010 8:42am
Quoting Danku
I do not like that bearish break.....but let me wait and see when it gets to 1.5600 Resistance Area........then i will also look at an Oil Chart.....cheers Chris as always.......

Of course my friend. I think oil is going to be very interesting.....
  • #8,839
  • May 25, 2010 9:17am May 25, 2010 9:17am
Quoting Arfer Daily
Looks like I added to my eurnzd trade at exactly the right time. Why don't all trades go this way?
Nice trade mate!
  • #8,840
  • May 25, 2010 9:27am May 25, 2010 9:27am
Just let me show off this one time...
Attached Image (click to enlarge)
Click to Enlarge Name: eurnzd hourly 25 05 2010 2.gif Size: 36 KB
Position trader - Anything intraweek is just noise...
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