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Returns

Getting Paid? With the USD/TRY Carry Trade?The USD/TRY has one of the highest Roll Over Interest out there should you choose to take on this highly volatile pair. It isn't so much that it is volatile, it has to do more with price just moves one direction, and that is up. The way we want to go is down (short) or at least sideways (ranging). Why is this interesting? It is because the Rollover Interest for going short stands at a whopping annualized rate of 28.94%. With 1:4 Margin Requirement for trading a standard lot on the TRY (based off the broker I use), $25,000 could earn me $28,940 yearly, which would be a staggering 115% return at the end of the year. Compounded, I would be a multimillionaire in no time, Buying up yachts, private jets, gourmet food, luxury cars, a pony that shoots lasers, Space X Starship, and countless other items. But hold up, is there a downside or something that makes this too good to be true? Yes, there is price movement as well as changes in interest rates as well as capital in the account. Having only $25,000 in the account, going full throttle and placing one huge position is sure to activate a margin call within seconds (as price can move thousands of pips against you quickly) and/or cause you to lose more than you put in. Now, we don't want that. You would need to have at least double the amount in the account in order to allow for price movement. The return would be halved, but making over 50% yearly isn't too bad either, is it? With price movement, the USD/TRY (I just call it the TRY), price moved higher over 57,000 pips in 2022, and over 100,000 pips in 2023; that is $18,240 and $32,000 respectively. Interest have just reached 45%, so things definitely would not have been good. Now, with funds in your account, not to many of us have $25,000 lying around to utilize in the markets, nor do we want to just tie up $25,000 into something really risky. Yet if used correctly and price does stabilize, then the TRY carry trade could payout (similar to the EUR/HUF). What could be done to reduce the risk? For starters, position sizing. Don't use the full force of your account and go "YOLO." Manage expectations. With a $25,000 account size, only getting into a position at around $3,750 (which is about 15% of the account used and a 15k position), would be around $3,650 return, which would be about a 14.6% return (still not bad. How many people can do this). If things go sour and price does move up at the end the year by 100,000 pips against you ($0.05 move per pip), that would be -$5,000 reduced to $1,350 because of the gained rollover interest (which would be only a 5% hit to your account instead of 20%). Putting some hedges in could also reduce some of the risk. Additionally, research and analysis, this could push you to make a more informative speculation on if getting into the pair is a good idea. Furthermore, to really ensure you don't lose any money, is to not get into the pair at all. For myself, I am utilizing around 41% of my Forex account in this pair, about 14% of my overall accounts. There are hedges in place to reduce the impact of price moving against me as well as my position being small enough to not cause any traumatic moves, even if price moves 100,000 pips against me (of course don't want that to happen). The decision is also made to stay in this pair for the long term or until there is some major changes. There is additional funds in reserves if needed, if things don't go well, in order to put another plan into play to get out of my positions in an orderly fashion. You all have some great trading out there.
Education
by DollarSaenz
2
Flawed concepts: returns & log-returnsConsidering we are almost in 2k23 (Merry Christmas btw xd), obsession with returns & log-returns is hilarious: 1) It implies sampling, which is info loss by definition, I don't even wanna mention that most don't even bother with proper one-point estimates of dem datapoints, dem just use Close prices; 2) Then the differencing process itself, whatever the lag is, implies info loss, higher the lag - higher the info loss. I can totally get it people doing it 30 years ago when getting data was a problem, but now? As I said in "there's only one strategy" post and in other previous post, what you see on your chart is aggregated (binned) trading activity, a real-world process that can be later 'modeled' with math or algorithmized. Ultimately, doesn't matter on which one of some correlated assets it's happening, prices move up when there's a consistent wave of buying volume (buy market orders & aggressively placed bids), and prices move down when there's a consistent wave of selling volume (sell market orders & aggressively placed asks). Gas intakes, like nitro bro! The same principle propagate on every resolution, only the bin sizes are different. Returns disregard all this, they show you prices magically jumping one time step after another. Not understanding all this is in modern days is what I call a textbook-scientist/library-guy/paycheck quant syndrome. These people know a lot of stuff, read a lot of stuff, remember a lot of stuff that you can google in 2 minutes, they can calculate fast, remember all the primes for some reason, but can't create anything demselves. And usually, their understanding of a complex system stops on a model they've found in a paper, usually a bad one, but they don't get the principles how & why smth works. They are like these people who have huge muscles they like to stare at and show to others, but when it comes to entering The Octagon it ain't really helps. They don't improvise, adapt and overcome, if something is not in a book, they're stunned. It's all easy to fix tho: open your mind, start trusting yourself and start to use your own head for thinking. Understand that it's all about information, and in most cases every1 has the equal access to the most important info, and if not, the info can be inferred. Everything is connected in the Universe. If not returns/log returns than what? VD, volume delta/log volume delta, if the volumes are legit, or at least are "ok", like on BABA stock. IVD, inferred volume delta/ inferred log volume delta, if the actual volume data is incomplete, like on ES futures. You can google how to calculate volume delta yourself, ima tell you how to infer it, it's simply Close minus Open. Don't believe? Check for yourself, open a nice vehicle where volumes make sense, calculate both VD and IVD, check dem correlation. Unlike returns & log returns, Close minus Open not loosing any info, ain't no sampling & differencing happening. Was it really so hard to figure out? It was in front of your eyes for at least 20 years, Open prices been publicly available for while, and electronic trading platforms started to appear around that time. Oh, if you care for gaps some reason, you can take IVD and add the same logic as is used in so called "True Range", these are the bar sizes that take gaps into account. Use the same logic with IVD. On the chart you see 4 studies, top-down best to worst. These things suppose to quantify changes in direction/slope/gradient, see for yourself which one worked better, pay attention to the highlighted period marked with vertical lines. 1) Lol, simply a weighted mean on Close minus Open datapoints, one line of code essentially, works exceptionally; 2) A dead simple seasonal differencing, for some reason called "Momentum", one line of code, worse, but super easy to calculate; 3) Non-weighted average over log returns, harder to calculate, but the result is the same as number 2 xd, so even worse; 4) Macd, even more funny stuff goes inside, numerous parameters, smoothed for some reason (smoothing is info-loss by definition), much worse. The easiest one line of code study worked better, because it simply uses more information. Just wanna mention it again, if you trade manually you need none of these, you simply look at the charts and your embedded organic neural network sees it all instantly. If your embedded organic neural network doesn't know how to do it, read all other posts, they explain levels & waves, it's all you need. The whole game is about information.
CME_MINI:ES1!Education
by gorx1
GEO Group: BullishThe War on Fraud People Will go to Jail Government Expenditures are being reduced, however, by giving contracts to the GEO group, the government is bullish on this company. Fundamentally, net income and net revenue increase, bullish, especially in a time when the US dollar is increasing in value. Michael Burry's only stock position is GEO group I see no resistance or walls until at least $20 price levels, easy 100% return on investment. By buying shares, I do not need extra exposure which I typically use option plays for. I will sit on this play. I typically am never this long on something, but I truly believe that in this age of BTC and fraud from people who think the IRS are fools, will be surprised when the feds come knocking for the money. If the fed needs to reduce the money supply, it will do so by any means necessary. Also, like fundamentals, and financials, fully agree with this being way too undervalued. Just for the record I think EV cars will fail because they have zero towing capacity, likely will look into Hydrogen power instead.
NYSE:GEOLong
by kibakilla33
ETH Buy & Hold Monthly Returns in April, 2022In this idea we want to show our operation as a long term trader - another definition for the term "Investors" - in which we select - doing also fundamental analysis - assets with long term bullish Bias. During the selection process it is important to evaluate the performance of the assets and - once in the portfolio - to monitor how the situation evolves. How did ETH perform in April 2022? -21.11% As Quant Traders and Investors, we have developed a tool to help us decide if the asset has a long-term bullish bias and - even more important - to evaluate not only the profits but also the drawdowns at least on a monthly level - as investors portfolio monitoring is not that frequent - that we can expect. What do you think about the trend of ETH? Other assets to analyse?
BITSTAMP:ETHUSD
by TheSocialCryptoClub
The Bitcoin comfort zone - 90K within range? @tradingparrot Based on logarithmic model and 4-year halving cycle model we don't need a blow off top in the current cycle to get to 90K. We can just literally stay in the bitcoin comfort zone logarithmic channel and chill until we get there. Not financial advice but I kind of resonate with this idea. I'll be publish a video on youtube tonight with all the detail of this analysis. I'm tagging this as bullish in the context of the daily chart and with a time frame of months to a full year to allow the model to play out.
INDEX:BTCUSD
by TheTradingParrot
Performance distribution of retail investors and hedge fundsMy thoughts about performance. This kind of info is not very available so I have to do some guesswork. We that spend all day in front of the computer expect to get better returns than 10% a year. But we have no idea what is possible and where we "rank" compared to others. All academics look at ever is day traders, yes 99% of day traders lose money and 1% earn peanuts while taking huge risk, we get it. And sometimes they look at passive investors. Cool. But no one ever says anything about active investors or Forex speculators, just that "on average active retail investors outperform", how wonderful, the average, yes I'd call myself the average normie definitely LOL! And regulators are even worse, all they care about is protecting dumb money and scaring people away from day trading. The french "market authority" on television was literally screaming "flee Forex it is dangerous, you should fleeeeeee!", I kid you not. First we look at retail investors. So the french "market authority" (AMF) looked at FX & CFD brokers representing about half of the individual FX & CFD investor population. 14799 persons in the 2009-2013 period. They found that over 4 years close to 90% of traders lost money. This is another of their deceptive tricks. It's just as with science these days, the data says something, the abstract says the opposite. So according to the extremely biased french AMF OWN DATA: - 30% of traders are in the "0" column, and according to their own data there aren't that many traders with tiny accounts, so ~30% breakeven. - They refuse to give any % result, some may be recalculated by overall we do not know, therefore I will assume it does not look as bad (or they'd show) - 5% of all investors make 2/3 of the losses, or at least half - 1% of all investors only are actually making significant returns (and 2/3 of the total) - As always day traders that destroy the stats are mixed with the rest - Most "winning" traders are barely above 0, making just a few hundreds to thousands a year www.amf-france.org From other sources and the AMF sort of confirms this, we know that: - Losers (especially big losers) that stick to investing, the ones that never give up never surrender in the face of adversity, the courageous ones with "heart", ye these guys, their losses get bigger and bigger actually. - Most winners continue to win and their profits get bigger. Here page 19, this is for stocks, we can see the net monthly market-adjusted returns of 62,439 households a large discount brokerage firm from January 1991 to December 1996: - On average, as they keep hammering us with, they underperform the market by 0.14% (each month!) - The average individual investor gross returns are slightly above the S&P 500 index returns (page 3) - The average individual investor net returns are slightly below the S&P index returns (about 91% of the S&P) - The S&P returns a bit less than 1.5% monthly - The worst of the worst managed to return -20.85% below index monthly, probably a permabear day trader or something - The 1st percentile is at -4.86% below market, 5th at -2.45%, and 25th -0.73% - The 99th percentile is at +4.44%, 95th +2.15%, 75th +0.50% - The best individual investor got 48.35% above market MONTHLY - The best individual investor difference between net and gross is minuscule, obviously it is not a day trader, probably some lucky investments - The gross median return is at -0.01%! faculty.haas.berkeley.edu So it seems this is how it goes, a normal distribution: We do not have that much info, and what little there is is rather hard to find, and hidden behind mountains of trashy scams "how much money can I make day trading join my course". I really only care about my own performance but it's always interesting to see how it's all distributed, what is possible, etc. For some reason I am interested in patterns and statistics. Funny. The info does not get shared a lot. Based on research and what gets exchange it seems most "traders" are VERY interested in money and "lambos" and very few are interested in stats, patterns, numbers. Ye I mean what do stats and figures have to do with investing right? It's not about some numbers it's about how much money you can make trading on a phone and what you will do with all of that money right? Honestly if we eliminate day traders that already make up at least 2/3 of FX investors, and all the lambo trolls that hate numbers but "it's ok I manage my emotions", it's not 10% making money but 30% at least I am sure, and 10% making decent money (enough to start a real career). Would be nice if they could just once separate day traders and look at FX investors with a time horizon greater than 1 day. All we can do is guess more or less, obviously more than 10% of these make money, but has to be less than 50% very probably. 10 to 50%, that's pretty wide. Probably in the 20-40 range, that's all I can say with high certainty. Hedge funds next. Hedge funds were doing great in the 90s and Morgan Stanley has a doc about them here: www.morganstanley.com Page 6 we can see discretionary funds making 18% a year with a max drawdown of only 5%. For all strategies except perma-bear the max drawdown is smaller than the annual returns. With all the regulations and harder market (and little fixed income) the results today are probably not as good but I do not think they are extremely different either. My guess on how hedge funds fulfill their max drawdown obligations is they place most the money somewhere safe (92% of the whole in case of an 8% drawdown) and then they risk the entire 8%, they might give a bit of it to each of their traders that go aggressive, and if they return 100% on the 8% that's an 8% return overall. I'm pretty sure that's the idea. But they might not freeze the entire capital and go 10X leverage, maybe they do something more complicated, with 50% in cash/bonds, 30% in "safe enough" investments, and 20% in high risk active trading with a max drawdown of 25% on these 20% (so 5% overall). The definitely do something like this, have to. The serious ones at least. The S&P returned 17.2% with a max drawdown of 15.4%, and page 4 we can see again a normal distribution: - The median directional return yearly was 16.3% (0.9% below market!) and median max drawdown 28.5% - The 75% percentile made 20.5% (3.3% above market), remember retail 75ers were 0.50% above mkt monthly - The 25% bottom only make 11.1% which is 6.1% below market for the year - Stock selection has similar drawdown and the returns of the 25, 50, 75 are 12, 17.2, 20.9 - There are no giant losers or giant winners but there aren't 66000 funds, and they have restrictions - In particular So actually pretty similar thing. The major difference is around 15% of the retail stock investors lost money in a raging bull market and no hedge funds did (except the few bears I guess). Otherwise, same normal distribution but with less extremes for hedge funds, they're more compact around the center (market).
Education
by MrRenev
1
Its LIT$; Strong Fundamentals, Good technicals.Litentry: DID Aggregator, If you want techincals its in the section below. Ive been eyeing up litentry ($LIT) for the last month or two; it’s an innovative project backed with a strong team, solid fundamentals, and a realistic use case (if executed properly). For the time being, it is a speculative investment, given that the core product has yet to be launched and utilized by the general public. Feel free to jump into any section, perhaps this rant isn’t worth the time. Nonetheless, ill briefly explain the purpose of the project: What does it do? (Fundamentals) Litentry aims to aggregate data to identify unique users within multiple blockchains (read; interoperability) and facilitate multiple functions/features that previously were difficult to achieve in DApps. For example, suppose litentry manages to create unique IDs for people like you and I, and with these newly established blockchain identities we can undertake a new set of actions. A list of the common hypothetical actions include. *Personal Credit Scores: In the "real world", individuals acquire loans and credit through a system of scores and ratings (FICO, AAA, BB-). These scores are assigned by credit institutions like moodys, equifax, and fitch which ultimately designate your credit worthiness (how much you can borrow and/or at what interest rate). The system is based mostly on historical data; if you default on debt a lot, you lose the privilage of credit, but if you pay promptly youre allowed a bigger loan and/or at a lower interest rate. On the other hand, the "DeFI world" attempts to offer banking services to everyone, without exlclusivity, bias, or censorship, and right now, its limited by its collateralization ratios and requirements. If youre a small business owner in Nigeria and would like to expand you inventory by 10,000 USD via a personal/business credit utilizing the current DeFi services you would at least need to collateralize this loan with 20,000-30,000 USD worth of ETH, BTC, or others. If you don’t have collateral, you dont have DeFi; kinda lame. But, if you had built up a strong credit history on the blockchain, you could secure microloans (maybe even the full loan) using your DID that litenty has aggregated for you. Enter a new paradigm for DeFi in the world. *DAO Participation: It seems almost every token these days offers decentralized autonomous participation to its holders. That’s pretty cool, and analogous to shareholders in the stock market. In the "real world", financial reporting allows us to understand share distribution with reporting and compliance of large shareholders. And in blockchain tokens, we have that too, and even better. We can follow in real time the movement of tokens with every address that sends and receives the asset, if you knew Warren Buffett’s blockchain address, you could see when he acquired ETH, or when he sold it. But what if he held billions of ETHs spread out over thousands of addresses, he owned? Suddenly what seemed decentralized is no more, and ETH (or Token “X”) is a centralized organization. If you could assign unique identities to each holder voting and participation would be even more fair and decentralized this way. *KYC: Lastly, if you are going to run through a process of KYC with every new customer or with returning customers (log-ins) it would be quite easy to have an identity at hand to sign on/in. I´m Buying (Technicals) As you can see, we are in a pretty large range, excluding the local top of February, the horizontal price movement seems to be bound from 7.90$ to 12.50$ +- some cents. I like horizontal movements given that they often suggest some large accumulation (the bigger the accumulation the stronger the move to the upside and downside). A very weak trend has been established, its almost not noteworthy but its something to keep in mind just in case. I have bought small amount at 8.70 and intend to buy larger amounts near the POC. Its hard to snipe an entry with such a volatile asset, but if I were to call a sniping entry it would be at 7.97$ (+-0.02). Dollar-cost averaging this entry is key and expect a slightly larger holding period for bigger returns. However, the market in ETH is super-hot, and litentry hasn’t really followed the pace, it has a positive correlation (.43) to it so I can only hope it will catch up. Good trading, Matthias M.W
Long
by wachterxc
EURUSD Forecast and 15% trade running !Hey guys. Have a look at my forecast we are approaching a key level and should have a reaction. On my forecasted buy i took a BE. I was well aware it could drop back to mitigate a OB a bit further down and then go long which it did, also it didnt give an entry on the second long that i liked enough to take and then didnt give an entry at the top where i wanted sell. In saying this i managed to grab a nice little continuation down and then missed a scale in. Again like a keep saying master the liquidity or you will be the liquidity. Any questions fire away.
Short
by Bill-from-The-trading-Cartel
EURUSD forecast update and sell running 15%!!!Hey guys. Have a look at my forecast we are approaching a key level and should have a reaction. On my forecasted buy i took a BE. I was well aware it could drop back to mitigate a OB a bit further down and then go long which it did, also it didnt give an entry on the second long that i liked enough to take and then didnt give an entry at the top where i wanted sell. In saying this i managed to grab a nice little continuation down and then missed a scale in. Again like a keep saying master the liquidity or you will be the liquidity. Any questions fire away.
by Bill-from-The-trading-Cartel
1