The financial world different market participantsHolding periods are at record lows and people are whining about it. Time to talk a bit about who participates in the market.
1- Liquidity
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Something like half of the trading volume is done by specialists & HFT firms as well as a couple of scalpers which is a name for retail traders that hold for a few minutes to gracefully provide liquidity to real traders.
It is not something "shocking", investing requires market makers as intermediaries and an exchange or at least reputable liquidity providers (banks, I said reputable not honest) as well as some rules, and derivatives trading has had this - or most of it - since at least 1750 BC.
Yes, HFT are pigs and have no shame front running big funds or sniping day traders which is a name for another group of retail traders, but back in the "floor" days they did just the same, today everything is electronic and smooth, costs have gone down, reactions are better etc.
Algos have caused big crashes, so let's hope man does not lose control and we do not end up screwing the markets that we need with technology.
1 issue with HFT is they are undercapitalized, the head of global markets research at Goldman Sachs says they are less capitalized than just 1 major bank. This causes them to aggressively adjust their bids when the market price drops. Back in 1987 human specialists had to beg their banks to give them more money to buy during the crash or the entire world would collapse. You should be able to easilly find an interview of Tom Sosnoff about it.
I wonder what would happen if this happened today... The FED in hindsight would print infinite money and give it to hft?
The players in this categories are various market makers that we call HFT, as well as to a much lesser degree a few retail traders called scalpers and front running algos.
2- Intraday
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This, if my sources are correct, represents another 30% or close to 30% of stock volume.
This had a boom in the 80s and 90s, and again recently with crypto and now tech stocks.
Most of the people behind this are brokers that spend alot of money to acquire new clients.
"Educators" or "influencers" that refer new suckers to brokers get paid up to hundreds of dollars per client (I should have just done this rather than tryhard).
The amount of quant funds infesting the market AND the success they have is directly correlated to how much retail traders (especially day traders) are around and also how much money these day traders are losing.
You could say they are all day traders but this should be divided in 2 groups: the technical "day traders" which are all retail, and the professional "quants" that abuse day traders. The biggest quants that made big money are Jim Simons & George Soros quants from the 80s and 90s as I said technical analysis and day trading were very popular.
Might have wanted to keep that for myself idk. Bah no one cares.
2 major groups: Day traders & quants. Also much more rare penny stock pump and dumps can be included.
3- Short term participants (days to weeks)
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Once again, alot of the money being extracted here comes from retail investors using random strategies called technical analysis.
> Pre rolls.
One group of participants that exploit flaws on very small timeframes (days) are all the pre-roll strategy investors.
They exploit commodity ETFS that all lose money over time and have to sell their 1! positions at fixed times to then buy on 2!
These funds regularly blow up, and lately the Oil fund USO was in the news because it became so big the regulators made it diversify its oil position, what got it so big is a very big supply of dumb money getting all excited at very low Oil prices thinking it was free money (below $20 then below $10 then even negative).
Professionals that use these strategies made hundreds of millions from both dumb ETF "investors" as well as retail swing and day traders that jumped at the opportunity to get ran over. Alot of these profits/losses are actually being covered by Interactive Brokers of which dumb clients turned a few hundred thousands into decamillion losses. And they are a prime broker with a barrier to entry (2 years verified experience and $10000 in capital).
As usual regulators, after alot of dumb money got hit hard, started an "investigation". USO suckers lost tens of millions months ago, the profit has been taken that's it, but they do not know it yet. According to Robintrack, most retail investors 6 months later are still bagholding what was supposed to be a quick swing trade.
Pre-roll traders will sell on 1! before the ETF sells and also buy on 2! before they buy, and sell after the big operation moved the price.
In the case of the huge Oil crash, fund traders bought before the price collapse and ended up buying back from idiots that "bought cheap".
They made money not by "crashing the price", they made money by holding their winners while dumb money was underwater.
This dumb money is actually fortunate that there were short sellers to buy from them so close to expiry.
I am not sure regulators with their "investigations" understand this simple concept.
From the website etfdailynews:
“I make a living off the dumb money,” says Emil van Essen, founder of an eponymous commodity trading company in Chicago. Van Essen developed software that predicts and profits from pre-rolling. “These index funds get eaten alive by people like me,” he says.
Quick! Investigations! "The trading house is now the focus of investigations by regulators on both sides of the Atlantic, Bloomberg reported."
markets.businessinsider.com
Stupid morons. And there's never investigations when "stonk price go up" or when dumb money gets lucky (making them confident and about to lose big). Remember Wirecard... No investigation here. Gee it really blows my mind just imagining the incredibly mind-bogglingly moronic less-than-human mouth breathers that come up with these "investigations". Can't wait for Bitcoin & Tesla investigations.
> Trend Followers.
"The trend is your friend". "Just follow the trend this is what good boys & girls do". Did trend following get to people heads. It was very popular in the 80s & 90s. Some famous trend followers made gigantic returns exploiting dumb money (not sure all of them knew it).
Trend following was the holy grail at the end of this period and even to today (people have slow brains or something), but it has not - or barely - worked for the last 20 years (all of this is about to change imo thought).
Today the holy grail is index passive investing , who is making this possible are central banks, and the suckers are honest hard working americans that lose purchasing power while passive investors get fatter.
One of the most famous trend followers is Richard Dennis, which in the 70s to 80s turned $1600 into $200 million, in about 10 years.
I doubt he had a clue what he was doing and I think it was both lucky timing and lucky with randomly using the right strategy.
After making big gains he was really excited and thought every one could make money with no brain (money grows on trees as we all know).
"Wow making money is really easy". Typical Dunning-Kruger, except his peak of mount stupid lasted way longer than for other people.
He got rekt in the late 80s, got back in his feet and made some profit in the 90s but much less (and never thought of trying to learn something new).
Then after the 2000 bubble exploded he just lost money and disappeared. He is probably selling courses now.
The sort of general way it all comes together over a period of a few months or years with medium term funds, trend followers & quants versus dumb money:
Here is an example from investopedia with sugar:
Those are big returns in just about 3 months.
A quote from a quant website.
"CTAs by being patient trend-followers took advantage of the random methods of chart traders and profited at their expense. Some that are new to trading are not aware of the frenzy in the 90s about intraday trading mainly financed by brokers. Systematic traders took advantage of it and made large returns. But after the random intraday and swing traders were driven out of the market, CTAs have had problems generating returns. There is scarcity of retail dumb money at this point."
The 80s & 90s were the period where George Soros and Jim Rogers made monster gains in commodities too.
George Soros kept making big profits after that period, Jim Rogers has not.
Since 2000 trend followers have been suffering.
I got into trend following a few months ago it is going all right. It is making a comeback imo, but I do not think it will last long. It might, we will see.
I trust myself to be able to adapt. When this stops working I also have my strategy I have been exploiting for years. If both stop working (unlucky) gee well I'll adapt, SOMETHING ought to be working. I'll survive. I mostly do what I do with Forex thought and it is a different world.
If trend following does not work just go for reversals 🤦♂️
It's so lame to get famous and get the glory but you were actually bad and you end up losing and have no clue why and just end up selling books and trading courses 😂
So on the short term we got retail swing traders that use random strategies, fomo gamblers, and the systematic trend followers & pre-roll people that abuse them. Also hedgers, and a couple of short term hedge funds that probably do not make money on average.
4- The medium term : Around 1 year
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I heard hedge & mutual funds had median holding periods of 9 to 12 months, I also heard they had holding periods of 17 months.
I will assume this is not counting the losers, especially if they have a low winrate, that would mean a TF much below the reality.
Retail is completely absent here.
There are various strategies. "Strategic" stock picking. Bull bias, bear bias (on the market in general, so they are looking for stocks to buy, or to sell). "Short sellers" (Enron, Tesla, ...).
Hedge funds also exploit random day & swing traders and made big profits in the 80s and 90s then last 20 years as retail investing declined have made less, but hedge funds did not go from 100 to 0, it is more tame than trend followers.
Recently some hedge funds have struck gold. Bill Ackman made 100R ($2.6 Billion) when the S&P crashed after coronavirus lockdowns.
He made big money with price go down, so of course really dumb people cried and accused him of dricing down the price during a CNBC interview ("spreading FUD") probably soon investigation and bla bla bla.
Where are all the investigations when some clown says that Tesla is a revolution and going up 1000 fold? Where are the investigation in Max Keiser saying silver and later bitcoin would rule the world? "Oh no no need for investigation when price go up 🤤"
5- The long term: 10, 20, 30 years
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2 categories:
- Private high net worth. Value investors like Warren Buffet, Charlie Munger, even thought they run a company, an example of a private investor is Phil Town which has a youtube channel and writes book he is not very famous but ye that's a private investor why would they be famous? Should they take a megaphone and shout their net worth on the top of buildings?
- Bagholders: Can either be retail investors that thought "Buy & Hold" meant "Buy garbage & Forget", I doubt they are aware 96% of US stocks go to zero, well 100% on a long enough horizon but we are looking at less than 3 decades here. Or can be day & swing traders that bought something stupid (USO, Bitcoin...) and refuse to cut their losses so they turn their gambles into long term bagholds. Bill Ackman is a famous bagholder, when he is wrong he is SO WRONG and he just keeps on holding his bags all the way to zero which is really crazy. Warren Buffett early in his carreer has been on rare occasion been a bagholder, what he calls his worse mistake cost him according to himself at least 100 billion, he just kept trying to get that textile company to be worth something. The company Warren Buffett bagheld is called Berkshire Hathaway.
Buffett actually rarely holds for more than 2 years, and half of his purchases are sold under 1 year. He has a 100% turnover!
From the paper linked below, "we observe a median holding period of a year, with approximately 20% of stocks held for more than two years. At the other end of the spectrum, approximately 30% of stocks are sold within six months."
papers.ssrn.com
So he loses (or breaks even sometimes perhaps) 80% of the time. But when he wins... you know... 150R.
Important: if I got this (didn't read the whole thing) they only looked at what was in his quarterly fillings!
Who knows what grandpa B bought and sold within weeks!
It is very hard to find what stocks Warren Buffett quickly exited without going over quaterly reports, every one touches themselves at his returns, wants to know what he holds to copy, looks at winners which is almost useless but out of tens of millions of die hard fans it's like not a single one gives a damn about looking at his cut losses, due to low IQ.
It is truly mind boggling that over 90% of retail investors just transformed LOOK FOR GREAT COMPANIES AT GOOD PRICES, BUY AND HOLD WINNERS, into "Never surrender never give up just buy absolute garbage down 90%, buy and forget, hold the bag to zero over the long term it will eventually go up".
You could literally tell them exactly what to do they'd end up losing all of their money and dying of food poisonning somehow because they are handicapped.
Buffett holds for 7.5 year on average (or he did in 2010), with 80% of stocks held for less than 2 years, and 20% held for more with a couple held for several decades. He ain't holding for 50 years or a century.
6- The very long term
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Big pension funds, insurance funds, sovereign wealth funds, mega bagholders (owners of ponzi shares held those to their death dreaming they would magically regain value)...
The big, big, BIG boys. They do very little volume in markets because they rarely participate, but when they do they move entire markets.
They move alot of money at once, and while random retail traders & quants do big volume day after day, they mostly cancel each other out.
The over 1 trillion dollar "NOK" fund owns 1.5% of world shares, and when they do something you can feel it. Socialism (they are not really socialist but whatever) works really well when you have immense wealth. Over 1 trillion for 5 million inhabitants.
They hold 2.6% of EU stocks and "only" 1% of american stocks. There is talk that they may sell EU stocks to buy NA holdings, mostly USA obviously.
"Norway wealth fund may move $50 billion into U.S. stocks from Europe"
www.investing.com
That would really help push the price up and help jump start a bubble.
50 billion is just a small adjustment for them.
"The central bank has said its advice was not based on any particular view on future return in individual markets or regions."
They don't really care. They are trying to preserve the country wealth and are just doing small adjustment ("small"). They hold forever.
"The minority centre-right cabinet of Prime Minister Erna Solberg must seek approval from parliament for any major strategic shifts at the fund, a process that could take months to complete and which may involve making compromises."
No day trading here...
I am old why am I focussing on Norway...
Those are the current biggest wealth funds (made of 1 or more funds for the country) in the world:
China 2,250,000 million usd - Origin: their bags come from sending free goods to fat americans. They believe they will get something in return.
UAE 1,350,000 million usd - Origin: Oil & Gas. Hehehe a few months ago I remember an idiot telling me arab countries were poor 3rd world countries.
Norway 1,100,000 million usd - Origin: Oil from the sea. Crossed 10 trillion NOK recently I think. Their children have their future covered.
Saudis 900,000 million usd - Origin: Oil from the sand. During an interview the wealth manager Yasir Al-Rumayyan said he wanted to grow it to 2 trillion. Future gambles to take advantage of?
Those were the big famous ones. Then you got Singapore, more arab countries... The USA have a (LOL!) 200 billion wealth fund (and 30 trillion liabilities). Talk about a pyramid scheme.
If you look at the biggest fund from any source by AUM who do you have at the top?
1- FED - 7,000,000 million usd (but really you can just put an infinite sign here)
2- BOJ - 5,200,000 million usd bigger than the US one relative to population what a scam
3- PBC - 5,150,000 million usd biggest baghodlers in the world (I'm just kidding don't cry China)
Then you got plenty of multi trillion US state owned funds (sounds pretty communist to me, I wonder why they are pushing the price up at the people's expense), Japanese megacorps & banks, China communist groups/banks, European banks. Some middle east holders of course. And then a grand total of 0 african country is present in the top 100.
Banks really dominate the world. They hold all the capital.
It would be a real shame for passive investors & tiktok robinhood holders if the US communist funds that hold over $10 trillion were to liquidate their assets to cover the US foreign liabilities (China) and to pay for social programs wouldn't it? A reaaaal shame 🙃
What is this? I am feeling tingles. Team Biden! It's just a shame they have all these toxic ultra racist, anti business & anti family views.
Quick! someone tell the clueless socialist woke crew the US are holding trillions that could more than cover their student debts and social programs!
Special mention: Blackrock is the world largest asset manager overseeing more than 7 trillion. And they work hand in hand with the FED.
Funds
Unemployment Rate Overlayed Federal Funds RateOne must admit it is remarkable where the unemployment level was pre-covid. There would have been a considerable melt up within the market at peak employment like that.
It is a trying state of affairs as the unemployment rate is viciously targeting various sectors relentlessly.
XAUUSD News+Analysis Latest By Hydra 2020 Long Trade Idea** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **
Forex Trading are leveraged product & can result in the loss of your entire capital.
Please ensure you fully understand the Risks involved.
Commodity Markets can be Strengthened !I expect an increase in the USCI (US Commodity Index Fund) Index.
This could be a forerunner of the rise of commodity-based Stocks and Commodities.
It would be more accurate to turn to single commodities and stocks rather than this fund.
We'il talk about going from general to private later.
Nevertheless, let's write down the parameters that make this idea less risky:
Position Size : Small amount of Portfolio
Risk/Reward Ratio : 1/2.4
Stop-Loss : 35.48
Goal : 38.78
Recent status on my Commodity-related Terminals (Duration : Autonomous LSTM Adaptive Period):
-General :
-Futures :
Recent status Commodity-related Terminals ( Duration : 14 weeks ) :
- General :
- Futures :
Regards.
ASX listed ETF 's vs LIC 's (Listed Investmt Co.)- Global Eqs.Very large ASX listed ETF 's versus large LIC 's (Listed Investment Companies) in Global Equities
- ETF (marked with stepped lines): VGS Vanguard MSCI Index International Shares ETF, IOO iShares Global 100 ETF, MGE Magellan Global Trust
- LIC: MFF (MFF Capital Investments Ltd, preciously Magellan Flagship Fund), FGG Future Generation Global Investment, PMC Platinum Capital Ltd, TGG Templeton Global Growth Fund, PIA Pengana International Equities Ltd
Natural Gas - Go LongIf we compare past economic trends from our past in terms of our natural gas price, there are obviously many factors that contribute to the price of Natural Gas as well as the timings of the swings. Most often, natural gas will see price increases more often in the winter if we see unexpected changes in winter weather making it a seasonal bet.
In this chart I have compared the federal funds rate, the SPX 500, and the price of natural gas. These factors, from historical perspective, attribute to substantial correlation especially when we are near a market top. The more instability has shown to greatly change the price of natural gas and we can see shortly after markets reach substantial highs, natural gas has dropped to substantially low prices, then, shortly after, they correct in a substantial move. Politics play a huge factors in the price as well with political candidates speaking about banning fracking, most likely, this will be a positive for the natural gas price. Given a ban to fracking, basic economics states that when supply decreases, while demand remains constant, we will see price increases to the area of supply deficiency. Global warming can be looked at as a negative for natural gas prices as well, but the world is not heating fast enough to reduce demand for natural gas. In fact, we are seeing a rise in natural gas power plants as an alternative energy source given its low price compared to other fuel sources. Any increased demand will need to be met by an increased supply, but if natural gas prices do no rise we may see energy companies enter bankruptcy. It is my expectation that natural gas will slowly become an increasingly monopolized industry, this will be due to the factors I have listed above, but mostly because smaller companies will lose profitability potential and be forced to sell their assets to larger companies that are more sustainable.
a monopolized industry will raise natural gas prices overall, but we will maintain smaller price swings heading into the future. The reason for this is because we will see a huge possibility that the United States will nationalize the natural gas industry similar to the way we treat utility companies who provide us energy.
In the short term, going long natural gas should reap great reward as our economic expansion wanes especially as we are entering another winter.
Please post a comment below if you would like to discuss this idea further. I do understand there are many other driving factors to the price of natural gas.
Cheers,
AC
401K, ETF's, Mutual Funds will loose massive value, Sell NowAll these products lack liquidity, are a form of derivative and will result in massive financial losses for those retail (mom & pop) investors who are the last to sell them. Get out now, reallocate some portion to cryptocurrency ( Bitcoin, Ripple XRP, Tron TRX, Stellar Lumens XLM ) . Your stock broker will never tell you this because it would negatively affect his / her paycheck. If nothing else buy physical gold or silver .
Not financial advice, just my opinion
BITCOIN HOT SEPTEMBER, OCTOBER FORECASTThis prediction have been posted for first time at September 1. With stops at 4723, and target between 6800-8400
You can rade more about it at bitcointalk.org
Target point for October is somewhere between 7000-7500 -8500 , that's differs from volatility that will be seen when will enter to target lvls.
On November, we will reach something between 8000-10000
Is this the start of a bullish breakout?Is this the start of a bullish breakout?
Too early to say yet. Wait and see?
March CornMarch Corn still sees horizontal movement with creep upwards. Thursday is the USDA report for all grains, but the 2016 crop is still impacting this market. If USDA report shows a lowering of future crops, this may help corn. Also Funds may buy this week so support levels around 354'2 off the 3/1 Gann Fan may hold. If prices fall further look for 349 4/1 Gann Fan as next support.
HASI - GOOD OPPORTUNITY WITH HIGH YIELDLooking to add this stock to my portfolio in order to diversify, spread the risk and get more income from dividends.
With this stock we can expect at the moment a dividend of 5.71% , pretty good if we see that is also looking to go up both fundamentally and techinically.
If you want to build a portfolio of stocks in the most professional way, get professional help writting at :
TOMMYJOSE92@GMAIL.COM , We will charge you just 1% of your invested capital as a fee, and you pay after you receive the portfolio and accept it.
God Bless You All.
EURUSDmacro money margin market models momentum net offer ofset open order options paid pair patient pips portfolio profit pullback put quoStill waitingte rally range rate realmoney retail risk sector sell settlement short slippage spot stoploss swap swiss takeprofit technical trade trading trader traderslife trend unemployment value volatility wedge work
AUDUSD 4 HOUR CHART SHORTI'M ALREADY IN A SHORT POSITION BUT IF PRICE RETRACES UP TO MY SELL ZONE I WILL LOOK AT PRICE ACTION TO ADD IN ANOTHER POSITION AND TARGET 0.75000. I STRONGLY BELIEVE WE CAN GET TO THERE IN THE SHORT TERM BECAUSE THE LABOUR MARKET IN THE U.S KEEPS COMING OUT GOOD WHICH WILL HAVE INVESTORS/TRADERS SPECULATING A RATE HIKE AS EARLY AS JULY. ON TOP OF THAT AUD CURRENCY IS STILL OVERVALUED AND THE AUSTRALIAN GOVERNMENT SAID HE.LL LIKE TO SEE AUD REACH 0.75000 WHICH IS ADDED CONFLUENCE THAT ITS ONLY A MATTER OF TIME UNTIL WE GET THERE. AUD IS DOVISH WHILE THE FED IS HAWKISH SO WE'VE GOT A GREAT DIVERGENCE ON THIS PAIR.