Long & Wrong

Two points of admin…

1. I am about to have a cull of the many dead links in my blogroll, if you resume blogging again then please just leave a comment and I’ll return it to the  list. Similarly, if you have a blog that you would like listed (and I might like) then please also just mention it in  a comment.

2. I have noticed some ads appearing with these posts, I specifically chose WordPress because I object to ads, especially the kind that I noted here recently.  Apparently this is a ‘feature‘…

Only UK readers will understand this.

Advertising

To support the service we may occasionally show ads on your blog, however we do this very rarely. You can remove ads from your blog for a low yearly fee. We also have an option for high traffic blogs to show their own ads.

Hopefully the phrase ‘very rarely’ means they will soon disappear.  ’Caveat Emptor’ is probably about all I am allowed to say without finding my account suspended.

I am quite heavily in the red after the first couple of days of this week, but that’s OK because if anyone asks me I’ve got two new tactics to suggest success even where there is none…

1. Use the poker method of accounting.  This is even smarter and more devious than the Enron method… only report winnings.  Daniel Negreanu has tournament winnings of $12,583,677. I don’t quite(!) have those winnings but they are still of sizeable magnitude (just not quite as big as the losses).

2. Report turnover not profit.  The saying may be true –  ”turnover is vanity but profit is sanity” – but with negative profit like mine I’m going to concentrate on turnover.

Do I really have to explain the relevance?

So I have significant winnings this week and an impressive turnover, everything is good.  Now all I need is an accountant who is dumb enough to accept that statement.

I am finishing early because it is (a) Friday and (b) sunny. Before I headed off I did though realise that this blog was about to languish in limbo for another week.

I’m not sure what to do with the blog but for now I’ll post a chart because (a) it is easy and (b) it makes me look clever (today is definitely not representative of my week though, the more astute of you will recognise the market conditions that suit my method and those that most certainly do not).

It’s a bit rushed, e.g. (a) The first trade was a loser but the minus sign is obscured by a horizontal line and (b) I’ve only recorded pips and these are not the same as money (as I normalise the risk per trade and stops are not shown).

As I write this we have broken below xx050 and there is some strength to sell into but like I said, it’s sunny. Have a good weekend.

Now that summer is nothing more than a distant memory (it consisted of 3 warm days in June) I had planned to devote more attention to this blog.  My initial head-scratching and tea-drinking has though produced only  feelings of existential angst, I worry that trading is very simple (which is not the same as easy) and am no longer sure what there is to write about. Let me try and summarise my thoughts and why I feel there is little room to say anything much original…

1. Traders believe that price behaves in a non-random way. If you don’t believe this then you are  a gambler and are not welcome here.
2.Therefore the way to make money is to identify these non-random features and trade in such away as to exploit them for a positive edge. These non-random properties have no emotions so it makes no sense for you to either.
3.Profitability is achieved by repeatedly making positive expectancy decisions in a frustratingly probabilistic environment.  Good decisions and positive outcomes are not strongly correlated in the short term. You have to accept this fact emotionally and plan for it rationally (e.g. by recognising that the probability of 10,20,30… losing trades in a row is non-zero).

4. Keep repeating 3.

So I am left feeling that all the rest is just noise, the four points above are all that really matter (in my opinion) and the real work is in applying them at that tricky right hand side of the chart.  I’m not sure a blog is going to be any help and topics I used to think of as interesting might actually just be distracting.

The number of fellow bloggers who have fallen by the wayside, been silent for the last few months or moved onto that other zeroish-sum game, isn’t exactly inspiring me with confidence to continue either.

Let me mull it over for a bit. Perhaps blog-based existential angst is like the human kind and it will all feel better in the morning.