Notes for Chat with Traders, Episode 10

Added on by C. Maoxian.

Episode 10 ... Tim Grittani (52:48)

  • Finance major at Marquette
  • Learned that he didn't like finance
  • Was into poker and sports betting in high school
  • Opened account with ShareBuilder(?)
  • Started randomly buying and selling 30 cent stocks
  • Lost half his account within a couple of weeks
  • Joined Tim Sykes' "Silver Package"
  • Blindly followed trade alerts from "gurus"
  • Had emotional trouble once money was on the line
  • Hiding his P&L helped him become less emotional
  • Went full time after six months of struggle, $1,300 in the hole
  • November 2011 (?) back to breakeven
  • Made a new mistake, learned something new every day for six months
  • Learned to focus on a couple main set-ups
  1. OTC Pump and Dumps
  2. Buying multi-week or 52-week breakouts
  • Frustrated with listed stocks because too many factors affecting stocks
  • OTC stocks trade in a world of their own
  • Learned to understand promotions run on OTC market
  • Promoters have email lists with thousands of people on them
  • Understood all the connected promoter websites, subscribed to all of them
  • Would try to act on emails he received as fast as possible, beat the crowd on the spike up
  • Would also buy breaks of daily highs on the pumped stock
  • Fine line with fraud regarding stock promotions
  • Learned liquidity all important
  • Began short selling promotions instead of buying them
  • OTC promotions would get halted and would re-open weeks later down dramatically
  • OTC market dead until marijuana stocks ran in 2014
  • Began short selling listed stocks in the same way he shorted OTC promotions
  • When he sees patterns forming, he knows what to do
  • His edge is his experience
  • Spends 15 minutes every night putting together the next day's watchlist
  • Lost $290,000 on a single trade, LAKE, 9.90 entry, October 2014 (chart below)
  • Refused to cut his losses when mis-timed his entries, would always look to add higher
  • Before LAKE, trades would always work out for him in the end, developed a bad habit
  • LAKE experience taught him to cut losses
  • You need the right broker for your trading strategy
  • SpeedTrader best to buy OTC promotions back then
  • Only trade liquid, volatile stocks
  • Identify and focus on your niche
  • Traded only two OTC set-ups (new promotions, breakouts), nothing else
  • Trade charts and price action only (not hype)
  • Everyone knows OTC stocks are garbage, but just as many listed stocks are also garbage
  • Never hold and hope
  • Cut losses intelligently, not necessarily quickly
  • Base stops on chart, not some preconceived dollar or percentage amount
  • Figure your size from your risk level ... dollar risk is constant
  • "Trade the ticker, not the company" -- a Nate Michaud saying
  • Couldn't live without a market scanner -- how he finds his plays
  • Top percent gainers with dollar volume requirements is his main scan
  • Hasn't read any trading books, but interested in trading psychology books most
  • Don't waste your time following trade alerts or mimicking trades
  • Just make your own trades, win or lose, figure things out on your own
  • Be mindful about volume and liquidity -- avoid thin stocks
  • Blog:
  • Twitter: @KroyRunner89
2018-02-06_12-10-57 grittani.jpg

Notes for Chat with Traders, Episode 69

Added on by C. Maoxian.

Episode 69 ... John Carter (66:34)

Sounds like a down to earth guy, clearly another old pro. 

  • Loves the short side
  • Starts the year with a $180,000 account with goal to turn into a million 
  • Very aggressive trader
  • Been actively trading for 25 years
  • With experience comes patience
  • Difference between successful and unsuccessful traders is patience
  • Patience to wait for the set-up, patience to hold winners
  • If you get emotional and chase, you mess up your mindset
  • Opportunity cost of chasing is huge
  • 18-year old working at mall in cookie store, making $4 an hour
  • Saved up $1,000 over the course of a summer, bought call options on Intel
  • Made $800 in a week from those call options, he was hooked [what if he lost?]
  • Dad read Investor's Business Daily
  • Wired as a risk taker
  • Three times where he built up 10K to 100K with crazy position sizes
  • Then lost it all by trying to go from 100K to 1,000K
  • Mark Douglas' books helped a lot
  • Stopped trying to make a million dollars
  • Appetite for too much risk vesus too much fear
  • If you're too fearful, you can't make a living as a trader
  • Made 100K a year in the corporate world, figured he had to make the same if he traded full time
  • People who are too fearful wait for confirmation and that's the exact time you should be taking profits
  • Became friends with Mark Douglas
  • Douglas' insights into the markets and human mind were key
  • You should think probabilistically while you're in a trade -- anything can happen, no emotional attachments
  • Most people try trading for two years then give up
  • He used early trading profits to buy rental property
  • Later sold rental property to have bigger trading stake
  • Took him eight years of frustration to learn how to trade
  • Average trader with right tools, it should take two years to learn how to trade
  • How do you react when you have money on the line? Calmly take action or deer in headlights?
  • People need to find their sweet spot
  • Types of trading: day trading, swing trading, investing  
  • Nearly impossible to overcome commissions when day trading
  • Impossible to know what's going to happen three months out
  • Two days to two weeks is his sweet spot
  • Looks at 30 minute charts, that's the lowest time frame he'll look at, NEVER looks at five minute charts
  • Markets pop then consolidate
  • Cut his teeth on stock index futures
  • Big options trader on individual stocks
  • Old traders have "three set-ups and four markets" and care about nothing else
  • You don't do the same trades all the time -- depends if the market is bullish or bearish
  • You can be long, short, or flat
  • Flat is one of the best positions -- mind is neutral
  • "Don't piss away your chips" -- be patient
  • One or two days a month of focus are all you need with larger than normal position size
  • People who trade to alleviate their boredom piss away their capital
  • To become a good trader, you have to master exits (both stop losses and targets)
  • Options are priced for "expected moves" -- exit at dollar move that's priced in by options
  • Huge fan of Fibonacci extensions: 1.272 odds of getting there good (take bulk off), odds of getting to 1.618 much lower
  • Options nice because you can define your risk easily, you can only lose what you put up
  • Selling options is fun too
  • Mistake that novice options traders make is looking for cheap options
  • Out of the money options are designed to suck people in and expire worthless
  • If you're bullish on something: buy an in the money call and sell a put credit spread (expires worthless)
  • If you're bearish on something: buy an in the money put and sell a call credit spread (expires worthless)
  • Greeks are a distraction to him, he never looks at them
  • Favorite set-up: "Squeeze" -- Bollinger bands are inside of the Keltner channels
  • Bollinger band contraction eventually leads to range expansion
  • He never looks at a chart for more than a split second
  • Best set-ups are obvious instantly ... don't stare at it and force things
  • All set-ups should be simple enough to explain to a twelve year old
  • Any more than three indicators on a chart is too many
  • Wins and losses are randomly distributed ... you need a large sample size to come to correct conclusions
  • Easy to get lost in indicators, price is the most  important thing
  • January 2014, (14 15 16, he can't remember), big TSLA trade [it was Jan. 13]
  • Likes to track short interest ... TSLA at 40%
  • TSLA had been down ten, suddenly up five
  • Bought 100 call options of TSLA at $6 (account was $1.5MM)
  • Ended up adding and adding, built up to 1000 call options in TSLA [half the account?]
  • Trade went against him a little, so he took a shower, trade stabilized
  • Sold half into close, half into next morning's gap up -- made $1.4MM
  • No more million dollar day trades since then for him
  • Everything came together ... takes guts to hold on to those concentrated positions
  • When things happen that shouldn't happen, people are on the wrong side, big things happen
  • Get on the other side of other people's pain  [I like it]
  • He likes three or four large positions to 18 small positions
  • Don't shotgun, be patient and focus
  • When he was young, he wanted to make that one big trade
  • When you're older and more confident, you have your skills and you get patient
  • Anyone who trades for a living has developed confidence despite constant uncertainty
  • Get comfortable being uncomfortable
  • 1000 members in his gold-level chat room
  • Twitter: @johnfcarter -- infrequent twitterer

TV Shows Watched -- Peaky Blinders

Added on by C. Maoxian.

Watched season one and enjoyed it. 

Notes for Chat with Traders, Episode 32

Added on by C. Maoxian.

Repeat guest ... first heard him on Episode 66, listened out of order. 

Episode 32 ... Dan Shapiro (68:43)

  • Grew up in Brooklyn
  • Lacked direction in life
  • Generic Trading / Carlin Equities (1999-2006),  sold to RBC [in 2007]
  • Borrowed money from neighborhood loan shark
  • Ron Shear at Generic Trading hired him
  • Met Mayer Hoffman, great prop trader (made hundreds of millions)
  • Did well during dot com boom
  • Would just buy the dips and did very well
  • Dot com bust and 9/11 changed everything
  • Didn't make any money for two years
  • Incredibly depressed, would sob himself to sleep
  • End of 2003 started making money again
  • People trading off their iWatches while on vacation on social media (it ain't real)
  • "Here's the deal"
  • Grew up poor in Brighton Beach, mom a manicurist, dad a waiter
  • Tasted success trading during dot com boom, had no Plan B
  • If he didn't succeed at trading, he would have killed himself (he's serious about this)
  • No highs, no lows to trading, it's just work
  • Wife told him he'd have to get a real job
  • Make $100 a day first, then go from there
  • Stocks trade in intervals, like steps in a staircase
  • Stocks go from supply to supply and demand to demand
  • Most stocks are not trade-able
  • Most traders have no patience and no bankroll and no education
  • Looks at 60 minute pivots
  • Figure out who the hell you are
  • Where emotional buyers meet technical sellers: the supply zone
  • The more hands you play, the quicker you'll figure things out
  • He'll only be 6'2" if he puts on his wife's 4" heels -- be realistic
  • Figure out what not to do
  • How do you mentally stay afloat? Turn off your P&L
  • The more emotional you are about a trade, the more you'll mess it up
  • Don't walk away from the table when you're dealt pocket aces
  • Trade the set-up, not your P&L
  • Can't take trading to heart, you have to have a sense of humor
  • The revenge trade does not work, ever
  • You can't cry your money back to you
  • A lot of traders can't accept defeat
  • Lose the battle, not the war
  • The market takes your money and your confidence
  • You don't lose your confidence, it gets transferred to another trader
  • Don't let things snowball, get a massage, go to a sauna, do something nice for yourself
  • Listens to Sade to get depressed which makes him angry which makes him a better trader
  • Makes his money as a swing trader in a trending market
  • Dumb money trades in the morning and smart money trades in the afternoon
  • Will keep a good runner overnight
  • Treat trading like a business, it isn't fun
  • You don't serve filet mignon on a paper plate
  • Mayer Hoffman, Jason Lieber -- they'd tell you if you were trading like a putz
  • Hoffman taught him there's no such thing as overbought
  • "Whatever goes down, should go lower"
  • Price action dictates everything, opinions don't matter
  • Don't fight price action
  • Turn off social media, read good blogs instead, old vets
  • Every trader he knows has blown out, including Mayer
  • He never sells dreams, only reality
  • Don't think you're alone, keep your head up
  • "The rich people don't live in Times Square"
  • Twitter: @DanShep55

The Times Ain't Forgotten

Added on by C. Maoxian.

No good live version on YouTube so I'm forced to embed this ... Jason Isbell's album The Nashville Sound has several tracks that I like, which is remarkable. I'll feature the others in time. This song was written shortly after the booboisie elected T___p. 

Notes for Chat with Traders, Episode 157

Added on by C. Maoxian.

Repeat guest, formerly featured in Episode 119

Episode 157 ... Alex @TAGRtrades (62:23)

  • Wife takes care of their new baby (four months old)
  • Hasn't had a full night of sleep in four months
  • Child care $30K a year so doesn't make sense for wife not to stay at home [only in 'murika]
  • December 2017 his best month to date
  • Bitcoin / Blockchain mania at end of year 2017, he was able to catch that
  • MARA, DPW, RIOT his main plays ... sympathy plays
  • He would buy the one that was still red when the other two turned green
  • Lots of liquidity, easy to trade size since exits so easy
  • June 2018 will be five years of trading full time
  • Have to know what are the leaders and laggards in a sector
  • He knew when to back off, take the foot off the pedal, this time around
  • When friends and family contact you for advice, it shows the end is near
  • One or two days a month was where he made the bulk of his gains
  • Equity curve looks pretty when stretched out, but if you zoom in it looks choppier
  • Compounding is the key
  • Only one day this year with zero trades, but quite a few with only one or two trades
  • Stocks that he trades are low float, under $10 ... lots of liquidity issues
  • Makes errors, then doesn't correct them, tries to wriggle out, problems snowball
  • Trying to be better about 1) market preparation; 2) holding longer; 3) getting bigger 
  • In order to get bigger, you have to get better [great saying]
  • Liquidity issues are huge when your account size gets bigger
  • Lives in central time zone, market opens at 8:30 AM
  • Starts looking at market about 90 minutes before the open
  • Develops watch list night before -- stocks to watch
  • Puts 12 charts on the screens at once
  • Looks at daily charts for support / resistance levels
  • Following the right people on Twitter is important for getting news
  • Pays for two news services, squawk boxes (TradeXchange, Benzinga Pro); worth the money
  • He's in favor of journaling, but doesn't do it as much as he used to
  • He's not a big spender, seeing himself down $2-3K in a trade still painful
  • When he has a big day, he doesn't celebrate
  • Still risks same percentage per trade (max 2-3% loss) as in the past
  • Has no confidence in his swing trading ability yet
  • People say he's just a long-biased trader in a giant bull market (to put him down I guess?)
  • Now he's 85% on the long side, 15% short side
  • Short trades are 1/20th the size of his long trades
  • Never adds to his short trades, takes one shot
  • Watches top ten most volume names closely
  • Uses to scan ... under $10 stocks, trading 2.5x average daily volume (whatever the default is)
  • Great charts don't matter if the volume isn't there
  • Looks closely at all the charts (20-30) from scan above
  • Low float, hot sector, high short interest, good chart setups
  • Knows top five and bottom five from his list
  • Always starts with the daily chart, only looks back 20 days for high / low resistance
  • Then looks at the hourly chart for support / resistance
  • Uses 3 minute chart to enter trades
  • Looks for flag and pennant patterns after a breakout
  • Uses VWAP on every single chart, but doesn't overanalyze it
  • VWAP gives you a quick basis of where the average person stands
  • Adds 200- and 50-day moving average to charts as target levels (since other people look at those levels)
  • No longer scales into trades, he just goes all in now, max risk from single entry, one shot
  • Quickly takes profits on a piece, then slowly scales out the rest (1/5th his size left at final target, e.g. 200-day MA)
  • Self-discipline all important, be flexible, make adjustments
  • New traders see one mold, try it, it doesn't fit them, they give up or lose a lot
  • Be flexible instead, find what fits you
  • Twitter: @TAGRtrades

Won't You Help Me Share My Load

Added on by C. Maoxian.

No good live version so I'm forced to embed this. Another case where the cover is better than the original ... Raul has a nicer voice than Van's:

Great Videos from Linda Raschke

Added on by C. Maoxian.

Linda Raschke did this series of videos for Futures Magazine back in 2013 and every one of them is pure gold. (Great story in the final segment about Linda's cat making some amazing hotkey trades.) 

Bonus ... I found another good one (of course good traders are made not born, but I believe it does help to be born with a certain temperament):

Double bonus ... so much gold in the following three short videos, every word is precious ... if you don't get it, listen over and over and over until you do: 

Misery Loves Company

Added on by C. Maoxian.

No live version on YouTube so I'm forced to embed this ... maybe the perfect anthem for San Francisco? 

Notes for Chat with Traders, Episode 156

Added on by C. Maoxian.

Episode 156 ... Michael Katz (59:45)

  • Has three kids, two boys and a girl
  • Started in markets, late 1990s, then in his late teens, during internet boom (born 1980?)
  • Opened first account with a couple thousand dollars 
  • Blew up a couple of accounts early on
  • Discovered equitytradingonline ... Gary Roth
  • Seven Points Capital (Mike Mangieri, Gary Roth, Mike Katz) started as execution firm
  • Started trading "parity" on NYSE 
  • Parity: buy on the bid through the floor broker, could easily scratch the trade, "risk free"
  • Getting good locates is a key edge a prop firm can provide [don't I know it!]
  • Scalping with size in high volume stocks within $5 to $20 range
  • Trades 50 million shares a month
  • Uses hot keys
  • Scales in and scales out
  • Has 15 different set-ups, each with its own rules
  • Descending triangles in low-cap trash names that have flown ("Flying Pigs") ... look for a lower high
  • Enters within the triangle, enters the break of the triangle, enters the retrace to base of triangle
  • ECN rebates don't make much difference to his P&L 
  • Trades eight to ten names on any given day
  • Will swing trade ... if it's green and it's working, he'll keep it; then exit rules come into play
  • The best trades start working right away
  • Whatever is gapping, he'll notice it
  • Uses scanner to find intraday setups: volume, volatility criteria
  • Watching volume important to him
  • Recommends Anna Coulling's book, A Complete Guide to Volume Price Analysis
  • He looks closely at Volume Profile
  • Consistency is what differentiates great traders from lucky ones
  • Need a clear and definable edge
  • Avoid large losses, scale back when you're not performing well
  • On the other hand, scale up dramatically when you're feeling in the zone
  • Always knows where he's getting out before he gets in
  • Amateur traders just hope for the best, never even consider their exit when wrong
  • Risks a fixed dollar amount on every trade
  • Sizes his positions based on stop price and fixed dollar loss, determined in advance
  • If he breaks his rules, he sizes down, slows down, takes a day off
  • Rule breaking very important to pay attention to [recognize when you're going on tilt]
  • Taking losses quickly, which most people can't do, itself is an edge
  • Reading order flow, observing patterns, also both edges
  • Big fan of journaling
  • Sports, trading, poker are all the same: you have a game plan, you execute during the game, then review the tapes afterward
  • Over time you develop a trading method
  • He still loves watching trading videos on YouTube, seeing what other people do
  • He's willing to learn from everywhere he can, then makes it his own
  • Can't imitate someone else's method, only yours will work for you
  • Establish rules for each set-up
  • Surround yourself with good, smart people who can mentor you
  • Be careful because there are false gurus and DVD sellers out there looking to take advantage of you
  • There are great traders on Twitter (mentions SmashTheBid) who are under the radar; seek them out
  • Katz says some kind things to Aaron in parting 
  • Twitter: Michael_Katz11

The State of Film Criticism Today

Added on by C. Maoxian.

Thanks to my buddy Ben for hipping me to "Rex Reed Bangs a Gong on the Mediocrity of Modern Life." The URL for that piece is mysteriously: who-is-rex-reed.html.

I love Rex (meaning I almost always agree with him). He's the last honest movie critic. He has balls, the way only a gay man born in the American South in the 1930's can have balls. And he writes well.

A few excerpts to whet your appetite:

"Mr. Reed bought his apartment in the Dakota for $30,000 in 1970." [nice timing]
"... one of the reasons that movies are so profoundly screwed up today is because the last person who gets any credit for anything is the writer."
"All [neighbor John Lennon] did was lie around stoned watching television."

Tell the People What They Want To Hear

Added on by C. Maoxian.

Another Kacy & Clayton song... love their sound but still find the lyrics largely unintelligible. Not thrilled with the official video; I prefer to make up my own story to match the song. 

Notes for Chat with Traders, Episodes 149 and 150

Added on by C. Maoxian.

Episodes 149 & 150 ... Aaron Brown (59:21, 64:19)

Interesting guy ... clearly not a conventional thinker or person ... I enjoyed it.

  • At AQR ($200 billion quant fund) for a decade
  • Didn't like the commute to AQR
  • Liked reading numbers in back of newspaper (sports and financial statistics) as a boy
  • Read Thorp's Beat the Dealer, fascinated by it
  • Grew up in the western US in the 1960s (Seattle)
  • Became obsessed with money around age 14 in the early 1970s
  • People who lost their jobs in the neighborhood disappeared; it was creepy
  • Very shy kid, 14 years old, tried to play poker to make money, and it worked
  • Went to Harvard, took a lot of math and statistics, graduate courses only, Harrison White signed off on it
  • Harvard grad students are dumber than Harvard undergrads, classes more interesting at grad level
  • Becoming better known as pro poker player ... also did a lot of sports betting
  • It's hard to scale up when you win at poker
  • Your unconscious brain wins poker at the highest levels, not understanding the numbers
  • Have to enlist your unconscious brain to win at high levels of poker
  • Don't let fear and greed drown out the quiet voices in your brain
  • Good traders use their unconscious brain to make good trades
  • Sleep deprivation stimulates a certain kind of learning
  • You need to know yourself, what motivates you
  • Your conscious brain isn't consulted when you make decisions, you just make up excuses after the fact
  • 1978-79, people didn't really know how to trade options
  • If you could do option math in your head, you could make money
  • Floor trading options you can pick up crumbs, but you can't scale
  • They were worried about the speed of sound in a 20 foot radius around options specialist post [not the speed of light as in the HFT age, a funny comment]
  • You had to physically be in the pit, and the trades were small time, no big lots
  • Couldn't get rich betting sports games, but you could get rich running a bookie operation
  • Entered Ph.D. program in finance at U. of Chicago 
  • Managed billion dollar bond fund in the 1980s
  • Head of mortgage securities
  • Crash of 1987 hurt everyone
  • Became a professor for a time
  • Went to work for JP Morgan
  • It's easy to make money, but hard to keep it
  • Invented the term "risk management" (outside of the insurance industry), didn't mean "risk minimization"
  • Front office risk manager decides how much traders can bet
  • CEO talks to middle office risk manager who talks to the front office risk manager who talks to the traders
  • Started at AQR in May 2007 and crisis hit in August 2007
  • Cut risk in late July 2007 just by chance
  • Losing a worst-case loss for a year every day, day after day, for three days
  • Cliff Asness called the bottom of it, whether by chance or not, no one knows [Cliff is now a billionaire]
  • Quant equity crisis of 2007, everyone forgot about it after the 2008 crisis hit
  • Featured in Scott Patterson's book, The Quants
  • 3000 longs and 3000 shorts simultaneously, make tiny gains with massive leverage, that's the idea
  • Quant equity funds all had overlapping positions, this was part of the problem
  • Funds don't have to report their short positions, only longs
  • Brokers can tell you what is Hard To Borrow
  • Quants are engineers, logical ... learn from mistakes
  • Quants don't like to change bet size just because of losses, hate drawdown control policies
  • Down 10% in a month, whether through losses or redemptions, clients can terminate contracts
  • Let investors out who want to get out, you don't want them in your fund anyway
  • You never want to be in a trade where the risk is managing you
  • All words for risk have some opinion attached to it (either positive or negative)
  • Traders have a very different idea about risk
  • Risk is something we exploit, it's like energy, and we respect it
  • Most people like predictability, but some people are more spontaneous
  • Gamblers and thrill seekers trade with no edge
  • The goal of trading is making money, that's your job, nothing else matters
  • Most people don't know why they do what they do
  • Most people who try to trade are pursuing some silly illusion
  • The best traders do it because they can't imagine doing anything else
  • You want to start risk taking when you're young, can't do it when there are "adult stakes"
  • The best traders are really bad about explaining how they manage risk
  • Traders who try to swing big to make up for past losses, it's a disaster
  • But you have to be willing to make big bets even after a series of losses
  • How far do things have to go against you before you know that you're wrong?
  • Traders internalize two ideas: they might be right and they might be wrong
  • How much does it make if you're right, how much does it lose if you're wrong?
  • Only need two scenarios in your mind for any trade
  • You equally weight both scenarios in your mind
  • How much are you willing to lose when you're wrong? Must decide this first
  • Most traders leave too much money on the table most of the time
  • Most traders spend 80% of pre-trade strategy about capping the downside
  • They should spend 80% of the time figuring out what they're going to do if they're right
  • How do you exit a trade when you're right? This is the key question
  • Some people want to win a lot of pots (at poker) instead of winning a big pot
  • You have to know who you are ... do you prefer scalping (winning lots of pots) or holding for a larger gain (winning an occasional big pot)?
  • You should know your profit ratio: average win on winning trades divided by the average loss on losing trades
  • Your win ratio is going to be whatever it is... think harder about your profit ratio
  • Don't try to guess what will happen, just prepare for what might happen
  • Risk avoidance mistake: start small and then get bigger (you should reverse this)
  • Plan for success! Pick a size and stick with it
  • Emotional decision making means reckless decisions
  • Focus on median outcomes (not the average outcome) ... look for good median outcomes
  • Kelly Criterion teaches us that if you take more risk, all you do is increase probablity and size of bad outcomes
  • Every trader MUST understand the Kelly Criterion (read Thorp's book)
  • Haghani experiment with bet size with biased coin very telling ... most people (financial professionals) went broke!
  • Every finance professor in the country should have been shocked by the Haghani Experiment (but they didn't care)
  • Things happen that you can't put in your probability model
  • 1% of the time you have no idea what's going to happen -- it's not predictable 
  • Takes significant amount of resources to maintain a Value at Risk model
  • Good non-specialist description of VaR: Financial Risk Management for Dummies (a book he wrote)
  • Kelly Criterion teaches you to design trades with maximum loss in mind given your edge ... gets you in the right ballpark
  • Haghani Experiment proved most people have no idea how to size a bet
  • Professional gamblers he asked all instantly knew the optimal bet size in the Haghani Experiment
  • His website: (lots of fascinating stuff on there)

Bitcoin Sell Setup Finally Appears on 24-hour Chart

Added on by C. Maoxian.

The waves are very clear in the Bitcoin (as they are in most speculative manias) ... if Bitcoin breaks below the 16,000 level, then the targets that come into play are 10,900, 8,800, and 3,600. Since these targets are based on the 24-hour chart, it will take weeks for them to play out, but that's my take on things.

Price could push above wave C without triggering below 16,000, possibly setting up a higher wave C, but unless the major wave 5 is "invalidated" (price moving above it), this looks very bearish to me.

2018-01-08_6-59-18 bitcoin.jpg