Archives of “nutshell” tag

rss

Disappointment from the ECB ahead would be euro supportive

  
Analysis, Forex
#  #  #  #  #  #  #  #  #

The headline is the in a nutshell view from Macquarie following the European Central Bank overnight.

  • The banks notes expectations building for more from the ECB
  • But the ECB have a limited range of policy options available
  • The bank also faces political headwinds to further aggressive action
And thus eventual action could be disappointing to markets.
For the euro ahead:
  • market is pricing around 18bps of policy rate cuts over the next 12 months
  • Eurozone bond market rally is an indication market is also expecting the ECB to restart QE
And thus is if the ECB fail to deliver on either of these, euro rates would go higher supporting the euro
The headline is the in a nutshell view from Macquarie following the European Central Bank overnight.Secret message?

Book Review: No One Would Listen

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

This is a book about Harry Markopolos, who is the author of this book.  He talks about how he attempted  for years to expose the fraud that was Bernie Madoff.

The book takes the following form (from my view of how the author sees it):

  • How he came to a quick conclusion that Bernie Madoff was a fraud.
  • How he tried to convince others of that view, especially those that were feeding more money to Madoff.
  • Two journalists took his side and wrote about Madoff in 2001 or so, but to no avail.
  • Trying to come up with a similar strategy that would work, though it would return much less than Madoff’s supposed returns, and finding few would invest in it.
  • Fruitless wranglings with the clueless SEC.
  • Finally, in 2009, Madoff blows up.
  • Vindicated, he talks to the media, Congress, and anyone who will listen.
  • He excoriates the toothless SEC, and proposes better ways to root out financial fraud.

That’s the book in a nutshell.  But stylistically, the book harps on how no one would listen.  Well, duh.  No one did listen, or the book would have been over sooner.

People are not Vulcans.  They aren’t logical.  Most don’t think; instead, they mimic.  “If it works for him, it will work for me also.”

That was the case with Madoff.  He maneuvered many sheep into position to be fleeced, and worse, they begged for the privilege to be his clients.

There were many red flags flying:

  • No independent custodian
  • No independent Trustee
  • Small Auditor, incapable of auditing such an enterprise.
  • Returns were too smooth for being so high.
  • The asset size was to large for the markets supposedly employed.
  • Even front-running profits would not be enough, were Madoff to do that.
  • No profit motive.  Other managers with lesser track records charged more.
  • Marketing was by invitation.
  • Investors were sworn to secrecy.
  • And more, read the book. (more…)

Ray Dalio Principles

  
  Education
#  #  #  #  #  #  #  #  #  #
  • I remained wary about being overconfident, and I figured out how to effectively deal with my not knowing. I dealt with my not knowing by either continuing to gather information until I reached the point that I could be confident or by eliminating my exposure to the risks of not knowing.
  • While most others seem to believe that learning what we are taught is the path to success, I believe that figuring out for yourself what you want and how to get it is a better path.
  • How much do you let what you wish to be true stand in the way of seeing what is really true?
  • How much do you worry about looking good relative to actually being good?
  • The most important qualities for successfully diagnosing problems are logic, the ability to see multiple possibilities, and the willingness to touch people’s nerves to overcome the ego barriers that stand in the way of truth.
  • Know what you want and stick to it if you believe it’s right, even if others want to take you in another direction.
  • In a nutshell, this is the whole approach that I believe will work best for you—the best summary of what I want the people who are working with me to do in order to accomplish great things. I want you to work for yourself, to come up with independent opinions, to stress-test them, to be wary about being overconfident, and to reflect on the consequences of your decisions and constantly improve.

Power of Charts

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

thumbs_upThe critical ingredient is a maverick mind. Focus on trading vehicles, strategies and time horizons that suit your personality. In a nutshell, it all comes down to: Do your own thing (independence); and do the right thing (discipline).

Just 6 Days back written to Buy :Nagarjuna Const ,Hind Construction.

-From 142-155 stock number one had spurted and our Darling stock spurted from 112-130.

Last week Boldly written :Worst is over for Shipping Stocks.

G.E Shipping ,Mercator Lines :Yes both stock were on Fire and still looking hot and fiery.

Always Remember :Repeatedly reevaluate your open positions. Keep asking yourself: would I put my money into this if it were presented to me for the first time today? Is this trade progressing toward the ending position I envisioned?

Updated at 9:38/22nd Sept/Baroda

Words of Wisdom

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

These generally brief phrases often include such pearls of wisdom as:

“Buy low, sell high.”

This maxim describes profitable trading in a nutshell and represents what every successful trader aspires to do. Of course, this is much easier said than done.

“Let your profits run, but cut your losses short. “

Allowing a winning position to continue making profits while taking losses quickly can make up a solid trading strategy in itself, and it is a key element of just about any good money management plan.

Many successful traders apply this as a trading rule in their trading plans in one form or another, perhaps by having a minimum risk reward ratio where the anticipated reward on a trade is always greater than the risk taken.

“Sit on your hands when you don’t have a clue.”

Knowing when you do not know where the market is going and discerning when to stay out of the market because of difficult trading conditions or because of your individual portfolio situation can save a trader considerable money and frustration.

Remember, good trading opportunities eventually arise for those who wait for them patiently.

“No one ever went broke taking a profit.”

This seems a wise and yet somewhat limiting expression perhaps. Famous trader Jesse Livermore used to say this and then finish with “but no one ever got rich taking three or four points out of bull market”. Taking profits will always add to your account, but by “letting profits run”, a substantially higher profit can often be had.

“It’s never too low to sell or too high to buy.”

Typically, markets will continue moving in the direction of the general trend. When a high or low is made, often a sufficient amount of momentum will propel the price to an ever higher high or lower low.

“Price discounts all.”

The mantra of technical analysts, the saying refers to the belief that news about any event related to the trading instrument – whether it is related to current events or supply and demand – will already be included in the price of a currency.

“All news is old news.”

A variation on “Price discounts all”, this saying refers to the idea that the market has already moved to factor information into the currency pair’s exchange rate regardless of what the news that came out was.

“Buy the rumor, sell the fact.”

Buying the rumor means going long before a bullish news item ever makes it to the news wires for fundamental analysts to mull over. Trading activity then ensues based on this rumor indicating that an item of importance will soon be released. The trader wise to the rumor can take advantage of the release of this news by selling out their position once it becomes public.

“Plan your trade and trade your plan.”

Trading does not favor the scatterbrained over the long term, so having a comprehensive and objective trading plan which can be easily followed and implemented makes up a key component of any successful trader’s methods.

“The trend is your friend.”

Keeping abreast of the major trend in the market and following it by positioning according to its overall direction will tend to give a trader an edge.

“Markets go up the stairs and down the elevator.”

This saying refers to the slow and plodding nature with which markets often go up, whereas when prices decline, they tend to do it in a much faster and abrupt way. While less of a factor in the forex market, this is especially true of stock markets.

Basically, all of the above sayings contain valuable advice and trading wisdom that can be useful for just about anyone involved or thinking about getting involved in trading forex or any other market.

Zero is Bottom

  
  Education
#  #  #  #  #  #  #  #  #  #  #

The markets have a clearly defined Zero-value. This has several important implications. First, traders often discount the possibility of something becoming absolutely worthless (i.e. going to zero), so the more the price goes down, the greater the traders’ tendency is to believe that it has a higher probability of going up again; therefore the temptation to catch the bottom and go long becomes compelling (despite its irrationality). Traders must realize that how they are hardwired to think as people is not necessarily the way they should think as a trader. There is a reason why 90% of people who attempt to make a living as a trader end up failing and it is not because of intelligence, information, technology or effort. In a nutshell, I believe failure in trading is because of a lack of self-awareness. The solution is to compartmentalize your thinking. When you are interacting in society or at home, let yourself think like a person; but when you sit down to trade, you need to think objectively by evaluating risk/reward as a trader should.

The Win/Loss Ratio

  
  Education
#  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #  #

42-21056354“One common adage on this subject that is completely wrongheaded is: You can’t go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. … (more…)

Ray Dalio Principles

  
Education, Life
#  #  #  #  #  #  #  #  #  #  #  #  #

Afew gems taken from Ray Dalio’s Principles. Here’s the link to the ‘Principles’ Ray Dalio founder of Bridgewater Associates published:

  • I remained wary about being overconfident, and I figured out how to effectively deal with my not knowing. I dealt with my not knowing by either continuing to gather information until I reached the point that I could be confident or by eliminating my exposure to the risks of not knowing.
  • While most others seem to believe that learning what we are taught is the path to success, I believe that figuring out for yourself what you want and how to get it is a better path.
  • How much do you let what you wish to be true stand in the way of seeing what is really true?
  • How much do you worry about looking good relative to actually being good?
  • The most important qualities for successfully diagnosing problems are logic, the ability to see multiple possibilities, and the willingness to touch people’s nerves to overcome the ego barriers that stand in the way of truth.
  • Know what you want and stick to it if you believe it’s right, even if others want to take you in another direction.
  • In a nutshell, this is the whole approach that I believe will work best for you—the best summary of what I want the people who are working with me to do in order to accomplish great things. I want you to work for yourself, to come up with independent opinions, to stress-test them, to be wary about being overconfident, and to reflect on the consequences of your decisions and constantly improve.
Go to top