ask Dcifrths...well, anything...about finance/mkts/ports that is.

[Paluka]

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Do you know any successful daytraders? If so, how have they run, and do you have any specifics on returns and/or standard deviations? Have you considered day-trading?

There's a guy that is maknig a steady killing in a certain futures market doing day trading. His stats are below. I cannot reveal which market or who he trades with (all this data is confidential obv).

Cumulative $48,964,107.50
Stdev $189,344
Mean $129,193
Days 379
Hours 2653
$ / Hour $18,456.13

I have charts in excel for daily and cumulative P/L, what is best way to host them (If you want them).

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I'm calling giant [censored] on this.

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I'm back at work today. I'll dig up the graphs.

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P/L at the end of each day

Cumulative P/L

Pretty damn insane.

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I still don't understand what this is supposed to be. If you are trying to tell me these are the results of some dude working with his own capital and day trading equities, then I'm not believing any of this. If this is the results of some complex operation at a big firm, then who cares. And why on earth would someone make $60 mill in a year and then share it with some dude who is going to post in on a random internet forum.

[ifckladyluck]

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Do you know any successful daytraders? If so, how have they run, and do you have any specifics on returns and/or standard deviations? Have you considered day-trading?

There's a guy that is maknig a steady killing in a certain futures market doing day trading. His stats are below. I cannot reveal which market or who he trades with (all this data is confidential obv).

Cumulative $48,964,107.50
Stdev $189,344
Mean $129,193
Days 379
Hours 2653
$ / Hour $18,456.13

I have charts in excel for daily and cumulative P/L, what is best way to host them (If you want them).

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I'm calling giant [censored] on this.

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I'm back at work today. I'll dig up the graphs.

[/ QUOTE ]

P/L at the end of each day

Cumulative P/L

Pretty damn insane.

[/ QUOTE ]

I still don't understand what this is supposed to be. If you are trying to tell me these are the results of some dude working with his own capital and day trading equities, then I'm not believing any of this. If this is the results of some complex operation at a big firm, then who cares. And why on earth would someone make $60 mill in a year and then share it with some dude who is going to post in on a random internet forum.

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h8 speak

[DcifrThs]

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I heard that FOREX trading cannot be beaten. It is a zero sum market, because it is so efficient and unpreditable. True?

What are the fundamental argumens that one can make a profit in forex trading?

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forex trading is EXACTLY the opposite of what that person just. forex (assuming you mean foreign exchange or currency) trading is the most obviously profitable area to generate returns.

this is the case because every once in a while, you get a non-profit maximizing entity that will move the price, on purpose, to an unsustainable level.

central bank of china right now is one of those. they are quite possibly the ONLY market participant that is short the Yuan at this point. they are short to the tune of over one TRILLION dollars. they sold that many yuan to keep their export led economy growing at super high levels for their own purposes.

the central bank is not trying to earn risk premia or generate returns by selling the yuan (like most every other market participant in every other market that is "rational" is expected to do).

that is why forex is one of the, if not the only (other than commodities etc.) market in which some, sometimes MASSIVE, participants PLAN ON LOSING MONEY!!! a super obvious no brainer trade right now is to be LONG the yuan. too bad we can't purchase it directly. BUT, interactivebrokers does sell a contract that is synthetically long the yuan or actually long the yuan (i dont' know which)

so no, what you heard is not true. whoever told you that needs to get his/her facts straight.

now, the 2nd question is way more interesting. i could probably write volumes on it and still not be 100% correct or accurate. forex trading is extremely unpredictable and VERY inefficient (one of the most inefficient markets if you are basing efficiency on the rationality of participants reflected in the movement of prices, which i think is a decent marker for that term).

prices are driven at any one time by tons of things like the following (that are tied together nonlinearly and in vastly different proportions depending on tons of different things):

1) actual & expected interest rate differentials (which can be broken down into growth rate differentials & inflation rate differentials and then broken down allt he way to the little indicators that go w/ each of those)

2) relative attractiveness of investing in a country vs. another (which again has something to do w/ interest rates, but not always...i.e. china has low interest rate but is EXTREMELY attractive to investors). examples can be latin american countries (Specifically commodity exporters) in the 70s. banks were dying to get in there and they made dollar denominated loans in sick sizes to those countries b/c commodity prices were so high and the countries' demand for consumption skyrocketed so they borrowed in dollar denominated debt on their future ability to earn income based on those high prices. when prices fell & the US interest rate soared, the countries coudn't make dollar payments & they defaulted causing a masssssssssive banking crisis.

also in this one is political stability, tax breaks for corporations, labor markets, stock performance (a country's currency can appreciate simply by having an attractive stock market to which int'l money flows)

i'm getting tired of writing, so you can google or wikipedia or research in some other way the others since they'll take even longer to outline...

3) balance of payments

4) purchasing power parity

5) currency boards, or other pegs or crawling peg type systems

6) carry trading

all those (and i may have forgotten some) can lead to profitable situations in trading currencies (especially the last one since betting against carry traders is like an option, you lose while they gain, and then BOOM you win a ton).

__________________

NOW, with all that said, i want to make clear one major point:

INVESTING FOR THE LONG TERM IN DEVELOPED COUNTRY CURRENCIES IS A ZERO SUM GAME AND PRODUCES ZERO EXPECTED RETURNS WITH A TON OF RISK.

further, emerging market currencies are ONLY profitable because of the systemic (country related) risk you take on when you hold that currency. you get paid via how interest rates play out over time and thus collect a risk premium.

that is the reason why hedging passive (or active) allocations to assets classes in other developed (and emerging, since you can take a view on currencies independently) countries is so important. otherwise, you have added something that will delivery NO expected return but add a TON of risk to yoru portfolio.

hope that helps.

Barron

PS- there are arguments that carry trading can provide an expected return for one reason or another but i'd rather not get into that now. if you want, ask that question and i'll take a break and go though both sides of the issue.

[CrushinFelt]

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Do you know any successful daytraders? If so, how have they run, and do you have any specifics on returns and/or standard deviations? Have you considered day-trading?

There's a guy that is maknig a steady killing in a certain futures market doing day trading. His stats are below. I cannot reveal which market or who he trades with (all this data is confidential obv).

Cumulative $48,964,107.50
Stdev $189,344
Mean $129,193
Days 379
Hours 2653
$ / Hour $18,456.13

I have charts in excel for daily and cumulative P/L, what is best way to host them (If you want them).

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I'm calling giant [censored] on this.

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I'm back at work today. I'll dig up the graphs.

[/ QUOTE ]

P/L at the end of each day

Cumulative P/L

Pretty damn insane.

[/ QUOTE ]

I still don't understand what this is supposed to be. If you are trying to tell me these are the results of some dude working with his own capital and day trading equities, then I'm not believing any of this. If this is the results of some complex operation at a big firm, then who cares. And why on earth would someone make $60 mill in a year and then share it with some dude who is going to post in on a random internet forum.

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h8 speak

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I have acces to every trade and every account. This was my gift to the forum on a little tangent of a question I asked dcfr. This account does exist, is one person, and rapes the market. I did nothing other than gather data and take it from numbers and turn it into pictures. It is his own capital. I'm not posting anything material on this forum (i.e. account name, number or the market in which the trades occur, i'd be breaking all sorts of documents I signed if that were the case).

[turnipmonster]

barron, is there any correlation between bid/ask spread and volume? if not, what causes shifts in bid/ask spread?

[Paluka]

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barron, is there any correlation between bid/ask spread and volume? if not, what causes shifts in bid/ask spread?

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Are you talking about equities?

[DcifrThs]

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barron, is there any correlation between bid/ask spread and volume? if not, what causes shifts in bid/ask spread?

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hmmmm, i haven't thought about this but reasoning out loud:

when volume is low, fewer people are trading or fewer things are being traded & thus execution becomes harder so the bid ask spread should widen.

so volume should be negatively correlated to the size of the bid/ask spread if that logic is correct.

i'd love to hear more informed views on this since i'm not a logistical trader and this info is likely useful.

Thanks for the question,
Barron

[turnipmonster]

yes, equities. also, what other factors influence the bid/ask spread for equities? I'm assuming number of market markers on a given board, no?

also, when I see something like this for a stock:
bid: 5.00 x 100
ask: 5.69 x 2000

on yahoo finance, what does that mean?

let me know if any of these questions don't make sense to ask, I am very new at this stuff.

[Evan]

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yes, equities. also, what other factors influence the bid/ask spread for equities? I'm assuming number of market markers on a given board, no?

also, when I see something like this for a stock:
bid: 5.00 x 100
ask: 5.69 x 2000

on yahoo finance, what does that mean?

let me know if any of these questions don't make sense to ask, I am very new at this stuff.

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Wow, that is a giant spread. The actual notation means there's an order to buy 100 shares at 5 and an order to sell 2000 shares at 5.69 those will be the next orders executed at their respective prices.

Edit to be clearer: If someone places a market order to buy <=2000 shares the transaction will occur at $5.69. If someone places a market order to sell <=100 shares the transaction will occur at $5. If the order is bigger than the shares indicated it will move to the next order, which may or may not be at the same price. If someone places a limit order either lower on the ask side or higher on the bid, that order will take over as the next to be executed.

What this means for you is that if you want to buy >100 shares/sell >2000 shares with a market order you should look at the order book to see the queue of orders so that you'll know the average price it will be executed at.

[DcifrThs]

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yes, equities. also, what other factors influence the bid/ask spread for equities? I'm assuming number of market markers on a given board, no?

also, when I see something like this for a stock:
bid: 5.00 x 100
ask: 5.69 x 2000

on yahoo finance, what does that mean?


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ugh, that means you are getting raped on that spread [img]/images/graemlins/frown.gif[/img]

usually spreads are a few %, not over 10% of the bid.

Barron