Archives of “February 2019” month

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Fashion & Trend

  
  Education
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MiniskirtIt has long been observed, casually, that the trends of hemlines and stock prices appear to be in lock step. Skirt heights rose to mini-skirt brevity in the 1920’s and in the 1960’s, peaking with stock prices both times. Floor length fashions appeared in the 1930’s and 1970’s (the Maxi), bottoming with stock prices. It is not unreasonable to hypothesize that a rise in both hemlines and stock prices reflects a general increase in friskiness and daring among the population, and a decline in both, a decrease. Because skirt lengths have limits (the floor and the upper thigh, respectively), the reaching of a limit would imply that a maximum of positive or negative mood had been achieved

Risk Management Game

  
  Education
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A random person is pulled off the street and given $10,000 to trade.  They have no prior experience which, on the bright side, means they have no bad habits, emotional baggage, or preconceived notions.  Before trading they go through a five day crash course on market basics (order entry process, chart reading, pattern recognition, etc…).  Suppose you are tasked with the responsibility of drafting a set of risk management rules which they are required to abide by.  The objective is to make them survive as long as possible in the trading arena so they can learn as much as possible through first-hand experience.

What types of rules would you set?

The ideal approach of course is to structure a set of rules which makes it as difficult as possible to blow up the account while still leaving them open to accumulating profits.  The goal isn’t so much helping them capture large gains as much as it is helping them survive.  After learning how to survive, then they can modify their approach to being more aggressive and seeking larger gains.

Here are two of my top rules: (more…)

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