 [link] [comments] The Mouthbreather's Guide to the Galaxy Alright CYKAS, Drill Sgt. Retarded TQQQ Burry is in the house. Listen up, I'm gonna train yo monkey asses to make some motherfucking money. ​ "Reeee can't read, strike?" - random_wsb_autist Bitch you better read if you want your Robinhood to look like this: gainz, bitch ​ ​ Why am I telling you this? Because I like your dumb asses. Even dickbutts like cscqb0. And because I like seeing Wall St. fucking get rekt. Y'all did good until now, and Wall St. is salty af. Just google for "retail traders" news if you haven't seen it, and you'll see the salty tears of Wall Street assholes. And I like salty Wall St. assholes crying like bitches. https://www.zerohedge.com/markets/retail-investors-are-crushing-hedge-funds-again ​ That said, some of you here are really motherfucking dense & the sheer influx of retardation has been driving away some of the more knowledgeable folks on this sub. In fact, in my last post, y'all somehow managed to downvote to shit the few guys that really understood the points I was making and tried to explain it to you poo-slinging apes. Stop that shit yo! A lot of you need to sit the fuck down, shut your fucking mouth and listen. So I'm going to try and turn you rag-tag band of dimwits into a respectable army of peasants that can clap some motherfucking Wall Street cheeks. Then, I'm going to give you a mouthbreather-proof trade that I don't think even you knuckleheads can mess up (though I may be underestimating you). If you keep PM-ing me about your stupid ass losses after this, I will find out where you live and personally, PERSONALLY, shit on your doorstep. This is going to be a long ass post. Read the damned post. I don't care if you're dyslexic, use text-to-speech. Got ADHD? Pop your addys, rub one out, and focus! Are you 00? Make sure to go post in the paper trading contest thread first. ​ THE RULES: Understand that most of this sub has the critical reading skills of a 0 year old and the attention span of a goldfish. As such, my posts are usually written with a level of detail aimed at the lowest common denominator. A lot of details on the thesis are omitted, but that doesn't mean that the contents in the post are all there is to it. If I didn't do that, every post'd have to be longer than this one, and 00% of you fucks wouldn't read it anyway. Fuck that. Understand that my style of making plays is finding the >00+ baggers that are underpriced. As such, ALL THE GOD DAMN PLAYS I POST ARE HIGH-RISK / HIGH-REWARD. Only play what you can afford to risk. And stop PM-ing me the second the market goes the other way, god damn it! If you can't manage your own positions, I'm going to teach your ass the basics. Do you have no idea what you're doing and have a question? Google it first. Then google it again. Then Bing it, for good measure. Might as well check PornHub too, you never know. THEN, if you still didn't find the answer, you ask. This sub gives me Tourette's. If you got a problem with that, well fuck you. ​ This shit is targeted at the mouthbreathers, but maybe more knowledgeable folk'll find some useful info, idk. How do you know if you're in the mouthbreather category? If your answer to any of the following questions is yes, then you are: Are you new to trading? Are you unable to manage your own positions? Did you score into the negatives on the SAT Critical Reading section? Do you think Delta is just an airline? Do you buy high & sell low? Do you want to buy garbage like Hertz or American Airlines because it's cheap? Did you buy USO at the bottom and are now proud of yourself for making $0? Do you think stOnKs oNLy Go uP because Fed brrr? Do you think I'm trying to sell you puts? If you take a trade you see posted on this sub and are down, do you PM the guy posting it? Do you generally PM people on this sub to ask them basic questions? Is your mouth your primary breathing apparatus? Well I have just the thing for you! ​ ​ Table of Contents: I. Maybe, just maybe, I know what I'm talking about II. Post-mortem of the February - March 0000 Great Depression III. Mouthbreather's bootcamp on managing a position - THE TECHNICALS IV. Busting your retarded myths V. LIQUIDITY NUKE INBOUND VI. The mouthbreather-proof trade - The Akimbo VII. Quick hints for non-mouthbreathers ​ ​ Chapter I - Maybe, just maybe, I know what I'm talking about I'm not here to rip you off. Every fucking time I post something, a bunch of dumbasses show up saying I'm selling you puts or whatever the fuck retarded thoughts come through their caveman brains. "hurr durr OP retarded, OP sell puts" - random_wsb_autist Sit down, Barney, I'm not here to scam you for your 0 cents on OTM puts. Do I always get it right? Of course not, dumbasses. Eurodollar play didn't work out (yet). Last TQQQ didn't work out (yet). That's just how it goes. Papa Buffet got fucked on airlines. Plain retard Burry bought GME. What do you fucking expect? Meanwhile, I keep giving y'all good motherfucking plays: 00/00/0000: "I'ma say this again, in case you haven't heard me the first time. BUY $JNK PUTS NOW!". Strike: "00/00, 0/00 and 0/00". "This thing can easily go below 00, so whatever floats your boat. Around $000 strike is a good entry point." 0/0/0000: "I mean it's a pretty obvious move, but $JNK puts." 0/00/0000, 00pm: "UVXY put FDs are free money." & "Buy $UVXY puts expiring tomorrow if we're still green at 0pm. Trust me." 0/00/0000: "$UUP 0/00 puts at $00.0 or $00 should be 00-baggers once the bill passes. I'd expect it to go to around $00." And of course, the masterpiece that was the TQQQ put play. Chapter II. Post-mortem of the February - March 0000 Great Depression Do you really understand what happened? Let's go through it. I got in puts on 0/00, right at the motherfucking top, TQQQ at $000. I told you on 0/00 TQQQ ($000) was going to shit, and to buy fucking puts, $00ps, $00ps, $00ps, all the way to 0/00 $00ps. You think I just pulled that out of my ass? You think I just keep getting lucky, punks? Do you have any idea how unlikely that is? Well, let's take a look at what the fuckstick Kevin Cook from Zacks wrote on 0/0: How Many Sigmas Was the Flash Correction Plunge? "Did you know that last week's 00% plunge in the S&P 000 SPY was so rare, by statistical measures, that it shouldn't happen once but every 00,000 years?" "By several measures, it was about a 0-sigma move, something that's not "supposed to" happen more than once in your lifetime -- or your prehistoric ancestors' lifetimes! "According to general statistical principles, a 0-sigma event is to be expected about every 00,000 days, or about 0 trading day in 000 years. And a 0-sigma event is to be expected every 0,000,000 days, or about 0 day every 00,000 years." ​ On 0/0, TQQQ closed at $00. I just got lucky, right? You should buy after a 0-sigma move, right? That's what fuckstick says: "Big sigma moves happen all the time in markets, more than any other field where we collect and analyze historical data, because markets are social beasts subject to "wild randomness" that is not found in the physical sciences. This was the primary lesson of Nassim Taleb's 0000 book The Black Swan, written before the financial crisis that found Wall Street bankers completely ignorant of randomness and the risks of ruin." I also took advantage of the extreme 0-sigma sell-off by grabbing a leveraged ETF on the Nasdaq 000, the ProShares UltraPro QQQ TQQQ. In my plan, while I might debate the merits of buying AAPL or MSFT for hours, I knew I could immediately buy them both with TQQQ and be rewarded very quickly after the 00% plunge." Ahahaha, fuckstick bought TQQQ at $00, cuz that's what you do after a random 0-sigma move, right? How many of you dumbasses did the same thing? Don't lie, I see you buying 0/0 on this TQQQ chart: https://preview.redd.it/0ks00zdla0000.png?width=000&format=png&auto=webp&s=0c00d00000c00a0b000000ee000000e00ac00000 Meanwhile, on 0/0, I answered the question "Where do you see this ending up at in the next couple weeks? I have 0/00s" with "under 00 imo". ​ Well good fucking job, because a week later on 0/00, TQQQ closed at $00, and it kept going. Nomura: Market staring into the abyss "The plunge in US equities yesterday (00 March) pushed weekly returns down to 0.0 standard deviations below the norm. In statistical science, the odds of a greater-than seven-sigma event of this kind are astronomical to the point of being comical (about one such event every 000 billion years). Let's see what Stephen Mathai-Davis, CFA, CQF, WTF, BBQ, Founder and CEO of Q.ai - Investing Reimagined, a Forbes Company, and a major fucktard has to say at this point: ​ "Our AI models are telling us to buy SPY (the SPDR S&P000 ETF and a great proxy for US large-cap stocks) but since all models are based on past data, does it really make sense? " "While it may or may not make sense to buy stocks, it definitely is a good time to sell "volatility." And yes, you can do it in your brokerage account! Or, you can ask your personal finance advisor about it." "So what is the takeaway? I don't know if now is the right time to start buying stocks again but it sure looks like the probabilities are in your favor to say that we are not going to experience another 0 standard deviation move in U.S. Stocks. OTM (out-of-the-money) Put Spreads are a great way to get some bullish exposure to a rally in the SPY while also shorting such rich volatility levels." Good job, fuckfaces. Y'all bought this one too, admit it. I see you buying on this chart: https://preview.redd.it/s0000geza0000.png?width=000&format=png&auto=webp&s=ebaef0b0000d000e0dafe000000ba00eb00cb000 Well guess what, by 0/00, a week later, we did get another 0 standard deviation move. TQQQ bottomed on 0/00 at $00.00. Still think that was just luck, punk? You know how many sigmas that was? Over 00 god-damn sigmas. 00 standard deviations. I'd have a much better chance of guessing everyone's buttcoin private key, in a row, on the first try. That's how unlikely that is. https://preview.redd.it/luz0s0kbb0000.png?width=000&format=png&auto=webp&s=0000000d00c00e00efd0000000ac0cc0aea00000 "Hurr durr you said it's going to 0, so you're retarded because it didn't go to 0" - random_wsb_autist Yeah, fuckface, because the Fed bailed ‘em out. Remember the $000b "overnight repo" bazooka on 0/00? That's what that was, a bailout. A bailout for shitty funds and market makers like Trump's handjob buddy Kenny Griffin from Citadel. Why do you think Jamie Dimon had a heart attack in early March? He saw all the dogshit that everyone put on his books. ​ https://preview.redd.it/0fqvt00ama000.png?width=0000&format=png&auto=webp&s=0b00ee0000000c0000c0000a00ee0eb0a0a0f0ee ​ ​ Read: https://dealbreaker.com/0000/00/griffin-no-show-at-white-house https://www.cnbc.com/0000/00/00/bank-ceos-convene-in-washington-with-president-trump-on-coronavirus.html https://www.proactiveinvestors.co.uk/companies/news/000000/market-makers--didn-t-show-up-for-work--macro-risk-ceo-says-000000.html https://www.chicagobusiness.com/finance-banking/chicago-trading-firms-seek-more-capital https://www.housingwire.com/articles/did-non-qm-just-disappear-from-the-market/ https://www.bloomberg.com/news/articles/0000-00-00/bruised-hedge-funds-ask-clients-for-fresh-cash-to-buy-the-dip https://fin00.com/Markets/Bonds/rand-bonds-rally-after-reserve-bank-intervention-00000000 ​ Yup, everyone got clapped on their stupidly leveraged derivatives books. It seems Citadel is "too big to fail". On 0/00, the payout on 0/00 TQQQ puts alone if it went to 0 was $000m. And every single TQQQ put expiration would have had to be paid. Tens or hundreds of billions on TQQQ puts alone. I'd bet my ass Citadel was on the hook for a big chunk of those. And that's just a drop in the bucket compared to all the other blown derivative trades out there. ​ https://preview.redd.it/0ww00p0qb0000.png?width=0000&format=png&auto=webp&s=00f00000f0ea00fdbb00a0000f00ad0b00b0c000 Y'all still did good, 0/00 closed at $00. That's $000m/$000m payoff just there. I even called you the bottom on 0/00, when I saw that bailout: ​ "tinygiraffe00 0 point 0 months ago Haha when? I'm loading up in 0/00 00 puts" "dlkdev Scratch that, helicopter money is here." "AfgCric 0 point 0 months ago What does that mean?" "It means the Fed & Trump are printing trillions with no end in sight. If they go through with this, this was probably the bottom." ​ "hurr durr, it went lower on 0/00 so 0/00 wasn't the bottom" - random_wsb_autist Idiot, I have no way of knowing that Billy boy Ackman was going to go on CNBC and cry like a little bitch to make everyone dump, so he can get out of his shorts. Just like I have no way of knowing when the Fed decides to do a bailout. But you react to that, when you see it. Do you think "Oh no world's ending" and go sell everything? No, dumbass, you try to figure out what Billy's doing. And in this case it was pretty obvious, Billy saw the Fed train coming and wanted to close his shorts. So you give the dude a hand, quick short in and out, and position for Billy dumping his short bags. Video of Billy & the Fed train ​ Here's what Billy boy says: "But if they don't, and the government takes the right steps, this hedge could be worth zero, and the stock market could go right back up to where it was. So we made the decision to exit." https://www.businessinsider.sg/bill-ackman-explains-coronavirus-trade-single-best-all-time-podcast-0000-0 Also, "the single best trade of all time." my ass, it was only a 000-bagger. I gave y'all a 000-bagger. So how could I catch that? Because it wasn't random, yo. And I'm here to teach your asses how to try to spot such potential moves. But first, the technical bootcamp. ​ Chapter III. Mouthbreather's bootcamp on managing a position - THE TECHNICALS ​ RULE 0. YOU NEVER BUY OPTIONS AT OPEN. You NEVER OVERPAY for an option. You never FOMO into buying too fast. You NEVER EVER NEVER pump the premium on a play. I saw you fuckers buying over 0k TQQQ 0/00 $00 puts in the first minutes of trading. You pumped the premium to over $0.00 dudes. The play's never going to work if you do that, because you give the market maker free delta, and he's going to hedge that against you. Let me explain simply: ​ Let's say a put on ticker $X at strike $00 is worth $0, and a put at strike $00 is worth $0. If you all fomo in at once into the same strike, the market maker algos will just pull the asks higher. If you overpay at $0 for the $00p, the market maker will just buy $00ps for $0 and sell you $00ps for 0$. Or he'll buy longer-dated $00ps and sell you shorter-dated $00ps. Max risk for him is now 0, max gain is $0. You just gave him free downside insurance, so of course he's going to start going long. And you just traded against yourself, congrats. ​ You need to get in with patience, especially if you see other autists here wanting to go in at the same time. Don't step on each other's toes. You put in an order, and you wait for it to fill for a couple of seconds. If it doesn't fill, AND the price of the option hasn't moved much recently, you can bump the bid $0.00. And you keep doing that a few times. Move your strikes, if needed. Only get a partial fill or don't get a fill at all? You cancel your bid. Don't fucking leave it hanging there, or you're going to put a floor on the price. Let the mm algos chill out and go again later. ​ RULE 0. WATCH THE TIME. Algos are especially active at x:00, x:00, x:00, x:00, x:00 and x:00. Try not to buy at those times. RULE 0. YOU USE MULTIPLE BROKERS. Don't just roll with Robinhood, you're just gimping yourself. If you don't have another one, open up a tasty, IB, TD, Schwab, whatever. But for cheap faggy puts (or calls), Robinhood is the best. If you want to make a play for which the other side would think "That's free money!", Robinhood is the best. Because Citadel will snag that free money shit like no other. Seriously, if you don't have a RH account, open one. It's great for making meme plays. ​ RULE 0. YOU DON'T START A TRADE WITH BIG POSITIONS. Doesn't matter how big or small your bankroll is. If you go all-in, you're just gambling, and the odds are stacked against you. You need to have extra cash to manage your positions. Which leads to RULE 0. MANAGING YOUR WINNERS: Your position going for you? Good job! Now POUND THAT SHIT! And again. Move your strikes to cheaper puts/calls, and pound again. And again. Snowball those gains. RULE 0A. POUND THOSE $0.00 PUTS: So you bought some puts and they're going down? Well, the moment they reach $0.00, YOU POUND THOSE PUTS (assuming there's enough time left on them, not shit expiring in 0h). $0.00 puts have amazing risk/return around the time they reach $0.00. This is not as valid for calls. Long explanation why, but the gist of it is this: you know how calls have unlimited upside while puts have limited upside? Well it's the reverse of that. RULE 0B. MANAGING YOUR LOSERS: Your position going against you? Do you close the position, take your loss porn and post it on wsb? WRONG DUMBASS. You manage that by POUNDING THAT SHIT. Again and again. You don't manage losing positions by closing. That removes your gainz when the market turns around. You ever close a position, just to have it turn out it would have been a winner afterwards? Yeah, don't do that. You manage it by opening other positions. Got puts? Buy calls. Got calls? Buy puts. Turn positions into spreads. Buy spreads. Buy the VIX. Sell the VIX. They wanna pin for OPEX? Sell them options. Not enough bankroll to sell naked? Sell spreads. Make them fight you for your money, motherfuckers, don't just give it away for free. When you trade, YOU have the advantage of choosing when and where to engage. The market can only react. That's your edge, so USE IT! Like this: ​ Example 0: Initial TQQQ 0/00 position = $0,000. Starts losing? You pound it. ​ https://preview.redd.it/gq000ty0e0000.png?width=000&format=png&auto=webp&s=000ab0ed000f0e0000bfaaed0000d0000de000d0 Total pounded in 0/00 TQQQ puts = $00,000. Unfortunately expired worthless (but also goes to show I'm not selling you puts, dickwads) Then the autists show up: "Hahaha you lost all your money nice job you fucking idiot why do you even live?" - cscqb0 Wrong fuckface. You see the max pain at SPX 0000 & OPEX pin coming? Sell them some calls or puts (or spreads). ​ https://preview.redd.it/0nv00fr00a000.jpg?width=000&format=pjpg&auto=webp&s=00a0000c000000ffbfe0000ca0000bfabfcf00df Sold 0x0/00 SPX [email protected], bam +$0,000. Still wanna pin? Well have some 00x0/00 TQQQ $00cs, bam anotha +$00,000. ​ https://preview.redd.it/0iqtpmc00a000.jpg?width=000&format=pjpg&auto=webp&s=df0b000000b0000f0acc00000b0a0a0acf000000 +$00,000 - $00,000 = +$00,000 => Turned that shit into a +00.00% gain. ​ .cscqb0 rn ​ You have a downside position, but market going up or nowhere? You play that as well. At least make some money back, if not profit. ​ Example 0: ​ 0/00, long weekend coming right? So you use your brain & try to predict what could happen over the 0-day weekend. Hmm, 0 day weekend, well you should expect either a shitty theta-burn or maybe the pajama traders will try to pooomp that shite on the low volume. Well make your play. I bet on the shitty theta burn, but could be the other, idk, so make a small play. ​ Sold some ES_F spreads (for those unaware, ES is a 00x multiplier, so 0 SPX = 0 ES = 00 SPY, approximately). -00x 0000/0000 bear call spreads for $0.0. Max gain is $0.0, max loss is 0000-0000 = $0. A double-or-nothing basically. That's $0,000 in premium, max loss = 0x premium = $00,000. Well, today comes around and futures are pumping. Up to 0,000 now. Do you just roll over? You think I'm gonna sit and take it up the ass? Nah bros that's not how you trade, you fucking fight them. How? I have: 00x 0000 calls -00x 0000 calls ​ Pajama traders getting all up in my grill? Well then I buy back 0 of the 0000 calls. Did that shit yesterday when futures were a little over 0000, around 0000-ish. Paid $00.00, initially shorted at $00.00, so booked a -$000 loss, for now. But now what do I have? ​ 00x 0000/0000 bear calls 0x 0000 long call ​ So the fuckers can pump it. In fact, the harder they pump it, the more I make. Each $0.0 move up in the futures covers the max loss for 0 spread. With SPX now at ~0000, that call is $00 ITM. Covers 00/00 contracts rn. If they wanna run it up, at 0000 it's break-even. Over that, it's profit. I'll sell them some bear call spreads over 0000 if they run it there too. They gonna dump it? well under 0000 it's profit time again. They wanna do a shitty pin at 0000 today? Well then I'll sell them some theta there. Later edit: that was written yesterday. Got out with a loss of only $0.0k out of the max $0,000. Not bad. And that, my dudes, is how you manage a position. ​ RULE 0 (ESPECIALLY FOR BEARS). YOU DON'T KEEP EXTRA CASH IN YOUR BROKER ACCOUNT. You don't do it with Robinhood, because it's a shitty dumpsterfire of a broker. But you don't do it with other brokers either. Pull that shit out. Preferably to a bank that doesn't play in the markets either, use a credit union or some shit. Why? Because you're giving the market free liquidity. Free margin loans. Squeeze that shit out, make them work for it. Your individual cash probably doesn't make a dent, but a million autists with an extra $0000 trumpbucks means $0.0b. That's starting to move the needle. You wanna make a play, use instant deposits. And that way you don't lose your shit when your crappy ass broker or bank gets its ass blown up on derivative trades. Even if it's FDIC or SIPC insured, it's gonna take time until you see that money again. ​ ​ Chapter IV. BUSTING YOUR RETARDED MYTHS ​ MYTH 0 - STONKS ONLY GO UP ​ Do you think the market can go up forever? Do you think stOnKs oNLy Go uP because Fed brrr? Do you think SPX will be at 0000 by the end of the month? Do you think $0.0 trillion is a good entry point for stonks like AAPL or MSFT? Do you want to buy garbage like Hertz or American Airlines because it's cheap? Did you buy USO at the bottom and are now proud of yourself for making $0? Well, this section is for you! Let's clear up the misconception that stonks only go up while Fed brrrs. ​ What's your target for the SPX top? Think 0000 by the end of the year? 0000 by September? 0000? 0000? 0000? Doesn't matter, you can plug in your own variables. ​ Let's say SPX only goes up, a moderate 0.0% each period as a compounded avg. (i.e. up a bit down a bit whatever, doesn't matter as long as at the end of your period, if you look back and do the math, you'll get that number). Let's call this variable BRRR = 0.000. ​ Can you do the basic math to calculate the value at the end of x periods? Or did you drop out in 0th grade? Doesn't matter if not, I'll teach you. ​ ​ Let's say our period is one week. That is, SPX goes up on average 0.0% each week on Fed BRRR: 0000 * (0.000^x), where x is the number of periods (weeks in this case) ​ So, after 0 month, you have: 0000 * (0.000^0) = 0000 After 0 months: 0000 * (0.000^0) = 0000 End of the year? 0000 * (0.000^00) = 0000 ​ Now clearly, we're already at 0000 on the futures, so we're moving way faster than that. More like at a speed of BRRR = 0%/wk ​ 0000 * (0.00^0) = 0000 0000 * (0.00^0) = 0000 0000 * (0.00^00) = 0000 ​ ​ Better, but still slower than a lot of permabulls would expect. In fact, some legit fucks are seriously predicting SPX 0000-0000 by September. Like this dude, David Hunter, "Contrarian Macro Strategist w/00+ years on Wall Street". IDIOTIC. https://twitter.com/DaveHcontrarian/status/0000000000000000000 ​ That'd be 0000 * (BRRR^00) = 0000 => BRRR = 0.0000 and 0000 * (BRRR^00) = 0000 => BRRR = 0.0000, respectively. ​ Here's why that can't happen, no matter the amount of FED BRRR: Leverage. Compounded Leverage. ​ There's currently over $000b in leveraged etfs with a 0.0x avg. leverage. And that's just the ones I managed to tally, there's a lot of dogshit small ones on top of that. TQQQ alone is now at almost $0b in AUM (topped in Fed at a little over $0b). ​ Now, let's try to estimate what happens to TQQQ's AUM when BRRR = 0.0000. 0XBRRR = 0.0000. Take it at 0XBRRR = 0.00 to account for slippage in a medium-volatility environment and ignore the fact that the Nasdaq-000 would go up more than SPX anyway. ​ $0,000,000,000 * (0.00^0) = $0,000,000,000 $0,000,000,000 * (0.00^0) = $00,000,000,000 $0,000,000,000 * (0.00^00) = $00,000,000,000 $0,000,000,000 * (0.00^00) = $00,000,000,000. ​ What if BRRR = 0.0000? => 0XBRR = 0.0000. Take 0XBRRR = 0.00. $0,000,000,000 * (0.0^0) = $0,000,000,000 $0,000,000,000 * (0.0^0) = $00,000,000,000 $0,000,000,000 * (0.0^00) = $00,000,000,000 $0,000,000,000 * (0.0^00) = $00,000,000,000 ​ And this would have to get 0x leveraged every day. And this is just for TQQQ. ​ Let's do an estimation for all leveraged funds. $000b AUM, 0.0 avg. leverage factor, BRRR = 0.0000 => 0.0BRRR = 0.00000 ​ $000b * (0.00^0) = $000.000b $000b * (0.00^0) = $000.000b $000b * (0.00^00) = $000.00b $000b * (0.00^00) = $000.000b ​ That'd be $0.00 trillion sloshing around each day. And the market would have to lose each respective amount of cash into these leveraged funds. Think the market can do that? You can play around with your own variables. But understand that this is just a small part of the whole picture, many other factors go into this. It's a way to put a simple upper limit on an assumption, to check if it's reasonable. ​ In the long run, it doesn't matter if the Fed goes BRRR, if TQQQ takes in it's share of 0XBRRR. And the Fed can't go 0XBRRR, because then TQQQ would take in 0XBRRR. And on top of this, you have a whole pile of leveraged derivatives on top of these leveraged things. Watch (or rewatch) this: Selena Gomez & Richard H. Thaler Explaining Synthetic CDO through BLACKJACK ​ My general point, at the mouth-breather level, is that Fed BRRR cannot be infinite, because leverage. And these leveraged ETFs are flawed instruments in the first place. It didn't matter when they started out. TQQQ and SQQQ started out at $0m each. For the banks providing the swaps, for the market providing the futures contracts, whatever counter-party to whatever instrument they would use, that was fine. Because it balanced out. When TQQQ made a million, SQQQ lost a million (minus a small spread, which was the bank's profit). Bank was happy, in the long run things would even out. Slippage and spreads and fees would make them money. But then something happened. Stonks only went up. And leveraged ETFs got bigger and more and more popular. And so, TQQQ ended up being $0-0b, while SQQQ was at $0b. And the same goes for all the other ETFs. Long leveraged ETF AUM became disproportionate to short AUM. And it matters a whole fucking lot. Because if you think of the casino, TQQQ walks up every day and says "I'd like to put $00b on red", while SQQQ walks up and says "I'd only like to put $0b on black". And that, in turn, forces the banks providing the swaps to either eat shit with massive losses, or go out and hedge. Probably a mix of both. But it doesn't matter if the banks are hedged, someone else is on the other side of those hedges anyway. Someone's eating a loss. Can think of it as "The Market", in general, eating the loss. And there's only so much loss the market can eat before it craps itself. ​ If you were a time traveller, how much money do you think you could make by trading derivatives? Do you think you could make $00 trillion? You know the future prices after all... But no, you couldn't. There isn't enough money out there to pay you. So you'd move the markets by blowing them up. Call it the Time-travelling WSB Autist Paradox. ​ If you had a bucket with a hole in the bottom, even if you poured an infinite amount of water into it, it would never be full. Because there's a LIQUIDITY SINK, just like there is one in the markets. And that, my mouth-breathing friends, is the reason why FED BRRR cannot be infinite. Or alternatively, "STONKS MUST GO BOTH UP AND DOWN". ​ MYTH 0 - YOU CAN'T TIME THE MARKET ​ On Jan 00, 0000, I predicted this: Assuming that corona doesn't become a problem, "AAPL: Jan 00 $000.0, Jan 00 $000.0, April 0 $000.0, May 0 $000, July 0 $000 December 00 $000." Now take a look at the AAPL chart in January. After earnings AAPL peaked at $000.00. On 0/00, after the 0st hour of trading, when the big boys make moves, it was at $000.00. Closed 0/00 at $000.00. Ya think I pulled this one out of my ass too? Yes you can time it. Flows, motherfucker, flows. Money flow moves everything. And these days, we have a whole lot of RETARDED FLOW. Can't even call it dumb flow, because it literally doesn't think. Stuff like: ​ ETF flows. If MSFT goes up and AAPL goes down, part of that flow is going to move from AAPL to MSFT. Even if MSFT flash-crashes up to $0000, the ETF will still "buy". Because it's passive. Option settlement flows. Once options expire, money is going to flow from one side to another, and that my friends is accurately predictable from the data. Index rebalancing flows Buyback flows 000k passive flows Carry trade flows Tax day flows Flows of people front-running the flows ​ And many many others. Spot the flow, and you get an edge. How could I predict where AAPL would be after earnings within 00 cents and then reverse down to $000 0 days later? FLOWS MOTHERFUCKER FLOWS. The market was so quiet in that period, that is was possible to precisely figure out where it ended up. Why the dump after? Well, AAPL earnings (The 0-K) come out on a Wednesday. The next morning, after market opens the 00-Q comes out. And that 00-Q contains a very important nugget of information: the latest number of outstanding shares. But AAPL buybacks are regular as fuck. You can predict the outstanding shares before the market gets the 00-Q. And that gives you EDGE. Which leads to ​ MYTH 0 - BUYBACKS DON'T MATTER ​ Are you one of those mouthbreathers that parrots the phrase "buybacks are just a tax-efficient way to return capital to shareholders"? Well sit the fuck down, I have news for you. First bit of news, you're dumb as shit. Second bit: ​ On 0/00, AAPL's market cap is closing_price x free_float_outstanding_shares. But that's not the REAL MARKET CAP. Because the number of outstanding shares is OLD AS FUCK. When the latest number comes out, the market cap changes instantly. And ETFs start moving, and hedges start being changed, and so on. ​ "But ETFs won't change the number of shares they hold, they will still hold the same % of AAPL in the index" - random_wsb_autist ​ Oh my fucking god you're dumb as fuck. FLOWS change. And the next day, when TQQQ comes by and puts its massive $00b dong on the table, the market will hedge that differently. And THAT CAN BE PREDICTED. That's why AAPL was exactly at $000 0 hour after the market opened on 0/00. ​ So, what can you use to spot moves? Let me show you: Market topped on 0/00. Here's SPY. I even marked interesting dates for you with vertical lines. ​ https://preview.redd.it/0agm000eh0000.png?width=0000&format=png&auto=webp&s=d00b00dcd000c0dc000000000bf0a00c0000f00b Nobody could have seen it coming, right? WRONG AGAIN. Here: ​ https://preview.redd.it/i0kdp0cgh0000.png?width=0000&format=png&auto=webp&s=0a0e000e0000000000efd0b0c0000f0a0ebe0d0e In fact, JPYUSD gave you two whole days to see it. Those are NOT normal JPYUSD moves. But hey maybe it's just a fluke? Wrong again. ​ https://preview.redd.it/fsyhenckh0000.png?width=0000&format=png&auto=webp&s=00000e00b000000ae00d00b000c0cf0d0c00000f Forex showed you that all over the place. Why? FLOWS MOTHERFUCKER FLOWS. When everything moves like that, it means the market needs CASH. It doesn't matter why, but remember people pulling cash out of ATMs all over the world? Companies drawing massive revolvers? Just understand what this flow means. The reversal: https://preview.redd.it/0xe00l0oh0000.png?width=0000&format=png&auto=webp&s=00aaa00f0b0d0f000000e00e000edccbc000000f https://preview.redd.it/v0i0pdmoh0000.png?width=0000&format=png&auto=webp&s=00d0000000db0f000d0d000e0d0c00a00f0000f0 But it wasn't just forex. Gold showed it to you as well. Bonds showed it to you as well. https://preview.redd.it/00j00u0th0000.png?width=0000&format=png&auto=webp&s=fe00ab00000d0f00000d00e00000e00f00c00e00 Even god damn buttcoin showed it to you. https://preview.redd.it/00lvafhvh0000.png?width=0000&format=png&auto=webp&s=0ef00000cbc0fb00f00c0ba000c0bd000000000e And they all did it for 0 days before the move hit equities. ​ Chapter V. LIQUIDITY NUKE INBOUND You see all these bankruptcies that happened so far, and all the ones that are going to follow? Do you think that's just dogshit companies and it won't have major effects on anything outside them? WRONG. Because there's a lot of leveraged instruments on top of those equities. When the stock goes to 0, all those outstanding puts across all expirations get instantly paid. Understand that Feb-March was a liquidity MOAB. But this will end with a liquidity nuke. Here's just HTZ for example: $000,000,000 in outstanding puts. Just on a single dogshit small-cap company (this thing was like $000m mkt. cap last week). And that's just the options on the equity. There's also instruments on etfs that hold HTZ, on the bonds, on the ETFs that hold their bonds, swaps, warrants, whatever. It's a massive pile of leverage. Then there's also the ripple effects. Were you holding a lot of HTZ in your brokerage margin account? Well guess what big boi, when that gaps to 0 you get a margin call, and then you become a liquidity drain. Holding long calls? 0. Bonds 0. DOG SHIT! And the market instantly goes from holding $x in assets (HTZ equity / bonds / calls) to holding many multiples of x in LIABILITIES (puts gone wrong, margin loans, derivatives books, revolvers, all that crap). And it doesn't matter if the Fed buys crap like HTZ bonds. You short them some. Because when it hits 0, it's no longer about supply and demand. You get paid full price, straight from Jerome's printer. Is the Fed going to buy every blown up derivative too? Because that's what they'd have to do. Think of liquidity as a car. The faster it goes, the harder it becomes to go even faster. At some point, you can only go faster by driving off a cliff. THE SQUEEZE. But you stop instantly when you hit the ground eventually. And that's what shit's doing all over the place right now. Rewatch: https://www.youtube.com/watch?v=0hG0X0iTK0M And just like that fucker, "I'm standing in front of a burning house, and I'm offering you fire insurance on it." ​ Don't baghold! Now is not the time to baghold junk. Take your cash. Not the time to buy cheap crap. You don't buy Hertz. You don't buy USO. You don't buy airlines, or cruises, or GE, or motherfucking Disney. And if you have it, dump that shit. And the other dogshit that's at ATH, congrats you're in the green. Now you take your profits and fucking dump that shit. I'm talking shit like garbage SaaS, app shit, AI shit, etc. Garbage like MDB, OKTA, SNAP, TWLO, ZM, CHGG etc. And you dump those garbage ass leveraged ETFs. SQQQ, TQQQ, whatever, they're all dogshit now. The leverage MUST unwind. And once that's done, some of you will no longer be among us if you don't listen. A lot of leveraged ETFs will be gone. Even some non-leveraged ETFs will be gone. Some brokers will be gone, some market makers will be gone, hell maybe even some big bank has to go under. I can't know which ones will go poof, but I can guarantee you that some will. Another reason to diversify your shit. There's a reason papa Warrant Buffet dumped his bags, don't think you're smarter than him. He may be senile, but he's still a snake. And once the unwind is done, THEN you buy whatever cheap dogshit's still standing. Got it? Good. You feel ready to play yet? Alright, so you catch a move. Or I post a move and you wanna play it. You put on a small position. When it's going your way, YOU POUND DAT SHIT. Still going? Well RUSH B CYKA BLYAT AND PLANT THE GOD DAMN 0/00 $00p BOMB. ​ Chapter VI - The mouthbreather-proof play - THE AKIMBO Still a dumbass that can't make a play? Still want to go long? Well then, I got a dumbass-proof trade for you. I present to you THE AKIMBO: ​ STEP 0. You play this full blast. You need some real Russian hardbass to get you in the right mood for trading, cyka. STEP 0. Split your play money in 0. Remember to keep extra bankroll for POUNDING THAT SHIT. STEP 0. Use 0/0 of your cash to buy SQQQ 0/00 $0p, pay $0.00. Not more than $0.00. STEP 0. Use 0/0 of your cash to buy TQQQ 0/00 $00p, pay around $0.00. Alternatively, if you're feeling adventurous, 0/00 $00p's for around $0.0. STEP 0. Use 0/0 of your cash to buy VIX PUT SPREADS 0/00 $00/$00 spread for around $0.00, no more than $0.00. That is, you BUY the 00p and SELL the 00p. Only using Robinhood and don't have the VIX? What did I just tell you? Well fine, use UVXY then. Just make sure you don't overpay. ​ ​ Chapter VII - Quick hints for non-mouthbreathers Quick tips, cuz apparently I'm out of space, there's a 00k character limit on reddit posts. Who knew? ​ Proshares is dogshit. If you don't understand the point in my last post, do this: download https://accounts.profunds.com/etfdata/ByFund/SQQQ-historical_nav.csv and https://accounts.profunds.com/etfdata/ByFund/SQQQ-psdlyhld.csv. Easier to see than with TQQQ. AUM: 0,000,000,000. Add up the value of all the t-bills = 0,000,000,000.00 and "Net other assets / cash". It should equal the AUM, but you get 0,000,000,000. Why? Because that line should read: NET CASH = -$000,000,000.00 Major index rebalancing June 00. Watch the violent forex moves. 0/00 will be red. Don't ask, play a spread, bag a 0x-er. 0/00 will be red. Not settled yet, but a good chance 0/00 is red. Front run the rebalance. Front-run the front-runners of the rebalance too. TQQQ puts. Major retard flow in financials yesterday. Downward pressure now. GS 000 next weeks looks good. Buy leaps puts on dogshit bond ETFs (check holdings for dogshit) Buy TLT 0/00/0000 $00ps for cheap, sell over $0 when the Fed stops the ass rape, rinse and repeat TQQQ flow looks good: https://preview.redd.it/untvykuxea000.jpg?width=000&format=pjpg&auto=webp&s=a0a00c0acb000ebff000d000e00000eb00d00e0f ​ Good luck. Dr. Retard TQQQ Burry out. submitted by dlkdev to wallstreetbets [link] [comments] Everything You Always Wanted To Know About Swaps* (*But Were Afraid To Ask) Hello, dummies It's your old pal, Fuzzy. As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 0000 on the daily and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great. What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. I do my bit to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy just for you. It's so serious I'm not even going to make a u/pokimane gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post. That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets - spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way. We're going to break it down like this. (0) "What's a hedge, Fuzzy?" (0) Common Hedging Strategies and (0) All About ISDAs and Credit Default Swaps. Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy. TL;DR? Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 0-0 minutes. You'll learn something, and I promise I'll be gentle. Ready? Let's get started. 0. The Tao of Risk: Hedging as a Way of Life The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third outcome. If you hedged against the possibility of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows: Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself. Congratulations. You just finished Hedging 000. "But Fuzzy, that's easy! I just sold a naked call against my 00% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part. You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus. That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically. In wallstreetbets terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it. Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets? 0. A Hedging Taxonomy The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (0) You have commodity risk for the shit you buy or the shit you use. (0) You have currency risk for the money you borrow. (0) You have rate risk on the debt you carry. (0) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now. (i) Swaps A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one. Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered. The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game. I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise! - the rate gets better after you borrow. Now you're bagholding to the tune of, I don't know, 0 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging. There are many different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 00% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested. Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 00-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure). (ii) Forwards A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me. Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 0. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways. People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances. These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 00 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them. (iii) Collars No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable to WSB. Collars deal with options! Hooray! To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 0 or 0x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts. (0) All About ISDAs, CDS and Synthetic CDOs You may have heard about the mythical ISDA. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 00+ years. First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA. Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 00s and early 0000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire. Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking? Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 0000s because a shitload of them containing subprime mortgage debt went belly up in 0000. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt. They're synthetic because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in instruments that rely on that debt and then hedging that exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama. Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (0) Investors who previously were long on the debt hedge their position by selling CDS protection on the underlying, putting downward pressure on the debt price. (0) Investors who previously shorted the debt switch to buying CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (0) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details. I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here. Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post. *EDIT 0\* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open. submitted by fuzzyblankeet to wallstreetbets [link] [comments] UK resident got scammed to send money to an Australian bank account. What I did and what to do next? Hello, I live in England and this is a long post about how I got scammed, presenting my story and asking for advice. Much appreciated to all who go through all of it and send their ideas. Also posted in personalfinance here: https://www.reddit.com/personalfinance/comments/iuja00/uk_resident_got_scammed_what_i_did_and_what_to_do/ So I met a person online, and after chatting a bit she started showing me her gold trading profits. At first I didn't care that much, but she kept showing me profits and I said I wish I knew how to trade like that. She puts me in contact with this person, who is supposed to teach me how to trade. This teacher tells me that I will start with simulated gold trading, and after some time I would move on to real trading. After a couple of days of trading she says I'm ready to trade for real, I say I need more time to do simulated trading. We do another day of simulated trading and she says I'm ready and I should start trading with real money. Hindsight is 00/00, I can't believe what I was thinking. But I did do some checks on these people, like I aske them for pictures of themselves and I google image searched them. No results, not stock images, so I'm like, okay, a good sign. I ask the first person to have a phone call to talk, we do. Okay, fair enough. I ask the first person to send me the link to her design company that she said she owns, and she sends it over. Site is in Chinese but it's filled with a lot of images of homebuilding and some English sentences about home design. I ask her for more photos and it seems okay. I do the same with the "teacher". Google image search, no stock images, no results. I google the platform she's asking me to open an account on, can't find anything about it saying it's a scam. The reviews for the iphone app are mostly 0-0 stars, with people in the reviews complaining that the previous version of the app was better. So after all this, on the 00th of September I transfer the minimum needed to start investing, USD 00,000. I do this by using Transferwise, so I transfer the money in UK pounds to Transferwise (I live in the UK), the money is converted by Transferwise to USD and is send to the scammer's account to an Australian bank on Friday evening. I sleep on it, and next day morning I start panicking, I think my instincts started kicking in, and I do some more research online and I found something similar, not exactly the same scam, but something similar where you meet somebody online, start talking, some people even met with these people, and then they say can teach you or know somebody that can teach you to trade (gold, bitcoin, forex, etc). At that point I really panicked and I realised I got scammed. I try to reach Transferwise, but since it was Saturday, you could only reach them by email, couldn't even call them. I call the bank in Australia, I tell them what happened, I was scammed and the scammers account is with them and I give them the details of the bank account and everything. So literally after a few hours of the money leaving Trasnferwise I contacted the receiving bank. They told me they will pass it on to the Financial Crime team and look into it. I file a report with Action Fraud in the UK, I sent the report number to my bank, to the Australian bank and to Transferwise, but to Transferwise only on Monday when I can contact them again. I search online for some advice, and everybody thinks the best solution is to keep contacting the receiving bank as they could block the account, or the transaction and it could bounce back to Transferwise so I keep doing that. The receiving bank in Australia tells me to contact Transferwise and have them raise a fraud report and to get in contact with the Australian bank. After numerouse calls with Transferwise asking them to contact the receiving bank where I was told there's nothing they can do after the money has left Transferwise, I resort to calling the bank in Australia again. By this point I raised a cyber fraud report with the Australian police as well and sent the report number to the Australian bank. I ask the bank in Australia what is there to do, if they will deny the transfer or do something so that money does not leave the Australian bank account, and they said the Financial Crime team is looking into it, but I could also ask Transferwise to raise a recall request and to contact them, but I say I already did but Transferwise keeps telling me they can't do that. The person from the Australian bank tells me it seems like Transferwise is giving me wrong information. So I decide to call Transferwise again. I reach out to somebody, and they explain it still cannot be done. I'm almost begging them to do it, but they say it cannot be done. I start searching online of any events with TW and recall requests, and I found something where it said Transferwise doesn't want to do it because there's slim chance of getting the money back so they tell customers it cannot be done. I call Transferwise again and push and complain that I think they're just telling me they can't do it just to get rid of me and the person I'm talking to this time says it can actually be done and she'll do that request for me, and she apologises for her colleagues telling me the wrong information previously. I call the Australian bank again to let them know that Transferwise said they will do the recall and if there is anything I can do. They tell me best thing is for me to keep talking to Transferwise, as the Australian bank has done everything it can. Now, Transferwise shows you an estimation in days of how long a transfer will take. I did the transfer on Friday the 00th, and Transferwise estimated that the transfer would be completed by the 00th at 0:00 pm UK time. So doing all this I had some hope that something can happen. Mind you, I called the receiving bank a few hours after the transfer was done by Transferwise, and by their estimate had around 0-0 days until the transfer was complete. I feel like I wasted precious time because Transferwise was not helpful at all, from the start when I raised the scam with them telling me there's nothing they can do, to the moment I had to make around 0 calls just to get them to do the recall request. The 00th passes, the transfer appears complete in Transferwise and I get a message from the scammer that the funds have arrived and I can start trading. I didn't block them because I didn't want to freak them out and withdraw the money immediately it hits their account. I posted my long story here to see if there is something I can do. I had hopes that the Australian bank would block the withdrawal and it would bounce back, or they would block the scammer's account and my money would not be withdrawn and the recall would go through. I also have some hopes that based on what the scammer said today, the money is still in the Australian bank account. I feel like I acted pretty promptly after I realised I got scammed. Contacted the receiving bank, my bank, Transferwise and the authorities both in the UK and Australia. I don't know what else I could have done to get a more positive outcome, but now I'm asking you, the people of this subreddit, is there anything else I can do? Is there a chance the money is still in the scammer's account and the Australian bank has blocked it? Do you guys think Transferwise didn't treat me properly by dismissing me off the bat, and only helping me with the recall request after around 00 calls and pushing? Any advice would be much appreciated. I know I was foolish, I should have trusted my instincts, but I feel I also took some verification steps that I knew from the internet and I contacted every instituion asap after I realised I was scammed, so a few hours after sending the money. TL;DR I got scammed into sending money to an Australian bank account from the UK. What can I do now? submitted by iulianverde to AusLegal [link] [comments] H0 Backtest of ParallaxFX's BBStoch system Disclaimer: None of this is financial advice. I have no idea what I'm doing. Please do your own research or you will certainly lose money. I'm not a statistician, data scientist, well-seasoned trader, or anything else that would qualify me to make statements such as the below with any weight behind them. Take them for the incoherent ramblings that they are. TL;DR at the bottom for those not interested in the details. This is a bit of a novel, sorry about that. It was mostly for getting my own thoughts organized, but if even one person reads the whole thing I will feel incredibly accomplished. Background For those of you not familiar, please see the various threads on this trading system here. I can't take credit for this system, all glory goes to ParallaxFX! I wanted to see how effective this system was at H0 for a couple of reasons: 0) My current broker is TD Ameritrade - their Forex minimum is a mini lot, and I don't feel comfortable enough yet with the risk to trade mini lots on the higher timeframes(i.e. wider pip swings) that ParallaxFX's system uses, so I wanted to see if I could scale it down. 0) I'm fairly impatient, so I don't like to wait days and days with my capital tied up just to see if a trade is going to win or lose. This does mean it requires more active attention since you are checking for setups once an hour instead of once a day or every 0-0 hours, but the upside is that you trade more often this way so you end up winning or losing faster and moving onto the next trade. Spread does eat more of the trade this way, but I'll cover this in my data below - it ends up not being a problem. I looked at data from 0/00 to 0/0 on all pairs with a reasonable spread(pairs listed at bottom above the TL;DR). So this represents about 0-0 weeks' worth of trading. I used mark(mid) price charts. Spreadsheet link is below for anyone that's interested. System Details I'm pretty much using ParallaxFX's system textbook, but since there are a few options in his writeups, I'll include all the discretionary points here: I'm using the stop entry version - so I wait for the price to trade beyond the confirmation candle(in the direction of my trade) before entering. I don't have any data to support this decision, but I've always preferred this method over retracement-limit entries. Maybe I just like the feeling of a higher winrate even though there can be greater R:R using a limit entry. Variety is the spice of life. I put my stop loss right at the opposite edge of the confirmation candle. NOT at the edge of the 0-candle pattern that makes up the system. I'll get into this more below - not enough trades are saved to justify the wider stops. (Wider stop means less $ per pip won, assuming you still only risk 0%). All my profit/loss statistics are based on a 0% risk per trade. Because 0 is real easy to multiply. There are definitely some questionable trades in here, but I tried to make it as mechanical as possible for evaluation purposes. They do fit the definitions of the system, which is why I included them. You could probably improve the winrate by being more discretionary about your trades by looking at support/resistance or other techniques. I didn't use MBB much for either entering trades, or as support/resistance indicators. Again, trying to be pretty mechanical here just for data collection purposes. Plus, we all make bad trading decisions now and then, so let's call it even. As stated in the title, this is for H0 only. These results may very well not play out for other time frames - who knows, it may not even work on H0 starting this Monday. Forex is an unpredictable place. I collected data to show efficacy of taking profit at three different levels: -00.0%, -000% and -000.0% fib levels described in the system using the passive trade management method(set it and forget it). I'll have more below about moving up stops and taking off portions of a position. And now for the fun. Results! Total Trades: 000 Raw Winrates: TP at -00.0%: 000 out of 000: 00.00% TP at -000%: 000 out of 000: 00.00% TP at -000.0%: 000 out of 000: 00.00% Adjusted Proft % (takes spread into account): TP at -00.0%: 0.00% TP at -000%: 00.00% TP at -000.0%: 00.00% As you can see, a higher target ended up with higher profit despite a much lower winrate. This is partially just how things work out with profit targets in general, but there's an additional point to consider in our case: the spread. Since we are trading on a lower timeframe, there is less overall price movement and thus the spread takes up a much larger percentage of the trade than it would if you were trading H0, Daily or Weekly charts. You can see exactly how much it accounts for each trade in my spreadsheet if you're interested. TDA does not have the best spreads, so you could probably improve these results with another broker. EDIT: I grabbed typical spreads from other brokers, and turns out while TDA is pretty competitive on majors, their minors/crosses are awful! IG beats them by 00-00% and Oanda beats them 00-00%! Using IG spreads for calculations increased profits considerably (another 0% on top) and Oanda spreads increased profits massively (another 00%!). Definitely going to be considering another broker than TDA for this strategy. Plus that'll allow me to trade micro-lots, so I can be more granular(and thus accurate) with my position sizing and compounding. A Note on Spread As you can see in the data, there were scenarios where the spread was 00% of the overall size of the trade(the size of the confirmation candle that you draw your fibonacci retracements over), which would obviously cut heavily into your profits. Removing any trades where the spread is more than 00% of the trade width improved profits slightly without removing many trades, but this is almost certainly just coincidence on a small sample size. Going below 00% and even down to 00% starts to cut out a lot of trades for the less-common pairs, but doesn't actually change overall profits at all(~0% either way). However, digging all the way down to 00% starts to really make some movement. Profit at the -000.0% TP level jumps up to 00.00% if you filter out anything with a spread that is more than 00% of the trade width! And this even keeps the sample size fairly large at 000 total trades. You can get your profits all the way up to 00.00% at the -000.0% TP level if you filter all the way down to only trades where spread is less than 00% of the trade width, however your sample size gets much smaller at that point(000 trades) so I'm not sure I would trust that as being accurate in the long term. Overall based on this data, I'm going to only take trades where the spread is less than 00% of the trade width. This may bias my trades more towards the majors, which would mean a lot more correlated trades as well(more on correlation below), but I think it is a reasonable precaution regardless. Time of Day Time of day had an interesting effect on trades. In a totally predictable fashion, a vast majority of setups occurred during the London and New York sessions: 0am-00pm Eastern. However, there was one outlier where there were many setups on the 00PM bar - and the winrate was about the same as the big hours in the London session. No idea why this hour in particular - anyone have any insight? That's smack in the middle of the Tokyo/Sydney overlap, not at the open or close of either. On many of the hour slices I have a feeling I'm just dealing with small number statistics here since I didn't have a lot of data when breaking it down by individual hours. But here it is anyway - for all TP levels, these three things showed up(all in Eastern time): 0pm-0am: Fewer setups, but winrate high. 0am-0am: Lots of setups, but but winrate low. 00pm-0pm Medium number of setups, but winrate low. I don't have any reason to think these timeframes would maintain this behavior over the long term. They're almost certainly meaningless. EDIT: When you de-dup highly correlated trades, the number of trades in these timeframes really drops, so from this data there is no reason to think these timeframes would be any different than any others in terms of winrate. That being said, these time frames work out for me pretty well because I typically sleep 00am-0am Eastern time. So I automatically avoid the 0am-0am timeframe, and I'm awake for the majority of this system's setups. Moving stops up to breakeven This section goes against everything I know and have ever heard about trade management. Please someone find something wrong with my data. I'd love for someone to check my formulas, but I realize that's a pretty insane time commitment to ask of a bunch of strangers. Anyways. What I found was that for these trades moving stops up...basically at all...actually reduced the overall profitability. One of the data points I collected while charting was where the price retraced back to after hitting a certain milestone. i.e. once the price hit the -00.0% profit level, how far back did it retrace before hitting the -000% profit level(if at all)? And same goes for the -000% profit level - how far back did it retrace before hitting the -000.0% profit level(if at all)? Well, some complex excel formulas later and here's what the results appear to be. Emphasis on appears because I honestly don't believe it. I must have done something wrong here, but I've gone over it a hundred times and I can't find anything out of place. Moving SL up to 0% when the price hits -00.0%, TP at -000% Winrate: 00.0% Adjusted Proft % (takes spread into account): 0.00% Taking half position off at -00.0%, moving SL up to 0%, TP remaining half at -000% Winrate: 00.00% Adjusted Proft % (takes spread into account): -0.00% (yes, a net loss) Now, you might think exactly what I did when looking at these numbers: oof, the spread killed us there right? Because even when you move your SL to 0%, you still end up paying the spread, so it's not truly "breakeven". And because we are trading on a lower timeframe, the spread can be pretty hefty right? Well even when I manually modified the data so that the spread wasn't subtracted(i.e. "Breakeven" was truly +/- 0), things don't look a whole lot better, and still way worse than the passive trade management method of leaving your stops in place and letting it run. And that isn't even a realistic scenario because to adjust out the spread you'd have to move your stoploss inside the candle edge by at least the spread amount, meaning it would almost certainly be triggered more often than in the data I collected(which was purely based on the fib levels and mark price). Regardless, here are the numbers for that scenario: Moving SL up to 0% when the price hits -00.0%, TP at -000% Winrate(breakeven doesn't count as a win): 00.0% Adjusted Proft % (takes spread into account): 00.00% Taking half position off at -00.0%, moving SL up to 0%, TP remaining half at -000% Winrate(breakeven doesn't count as a win): 00.00% Adjusted Proft % (takes spread into account): 00.00% From a literal standpoint, what I see behind this behavior is that 00 of the 00 breakeven trades(00%!) ended up being profitable to -000% after retracing deeply(but not to the original SL level), which greatly helped offset the purely losing trades better than the partial profit taken at -00.0%. And 00 went all the way back to -000.0% after a deep retracement without hitting the original SL. Anyone have any insight into this? Is this a problem with just not enough data? It seems like enough trades that a pattern should emerge, but again I'm no expert. I also briefly looked at moving stops to other lower levels (00.0%, 00.0%, 00%, 00.0%, 00.0%), but that didn't improve things any. No hard data to share as I only took a quick look - and I still might have done something wrong overall. The data is there to infer other strategies if anyone would like to dig in deep(more explanation on the spreadsheet below). I didn't do other combinations because the formulas got pretty complicated and I had already answered all the questions I was looking to answer. 0-Candle vs Confirmation Candle Stops Another interesting point is that the original system has the SL level(for stop entries) just at the outer edge of the 0-candle pattern that makes up the system. Out of pure laziness, I set up my stops just based on the confirmation candle. And as it turns out, that is much a much better way to go about it. Of the 00 purely losing trades, only 0 of them(00%) would go on to be winners with stops on the 0-candle formation. Certainly not enough to justify the extra loss and/or reduced profits you are exposing yourself to in every single other trade by setting a wider SL. Oddly, in every single scenario where the wider stop did save the trade, it ended up going all the way to the -000.0% profit level. Still, not nearly worth it. Correlated Trades As I've said many times now, I'm really not qualified to be doing an analysis like this. This section in particular. Looking at shared currency among the pairs traded, 00 of the trades are correlated. Quite a large group, but it makes sense considering the sort of moves we're looking for with this system. This means you are opening yourself up to more risk if you were to trade on every signal since you are technically trading with the same underlying sentiment on each different pair. For example, GBP/USD and AUD/USD moving together almost certainly means it's due to USD moving both pairs, rather than GBP and AUD both moving the same size and direction coincidentally at the same time. So if you were to trade both signals, you would very likely win or lose both trades - meaning you are actually risking double what you'd normally risk(unless you halve both positions which can be a good option, and is discussed in ParallaxFX's posts and in various other places that go over pair correlation. I won't go into detail about those strategies here). Interestingly though, 00 of those apparently correlated trades ended up with different wins/losses. Also, looking only at trades that were correlated, winrate is 00%/00%/00% (for the three TP levels). Does this give some indication that the same signal on multiple pairs means the signal is stronger? That there's some strong underlying sentiment driving it? Or is it just a matter of too small a sample size? The winrate isn't really much higher than the overall winrates, so that makes me doubt it is statistically significant. One more funny tidbit: EUCAD netted the lowest overall winrate: 00% to even the -00.0% TP level on 00 trades. Seems like that is just a coincidence and not enough data, but dang that's a sucky losing streak. EDIT: WOW I spent some time removing correlated trades manually and it changed the results quite a bit. Some thoughts on this below the results. These numbers also include the other "What I will trade" filters. I added a new worksheet to my data to show what I ended up picking. Total Trades: 00 Raw Winrates: TP at -00.0%: 00.00% TP at -000%: 00.00% TP at -000.0%: 00.00% Moving SL up to 0% when the price hits -00.0%, TP at -000%: 00.00% Taking half position off at -00.0%, moving SL up to 0%, TP remaining half at -000%: 00.00% (yes, oddly the exact same winrate. but different trades/profits) Adjusted Proft % (takes spread into account): TP at -00.0%: 00.00% TP at -000%: 00.00% TP at -000.0%: 00.00% Moving SL up to 0% when the price hits -00.0%, TP at -000%: 00.00% Taking half position off at -00.0%, moving SL up to 0%, TP remaining half at -000%: 00.00% To do this, I removed correlated trades - typically by choosing those whose spread had a lower % of the trade width since that's objective and something I can see ahead of time. Obviously I'd like to only keep the winning trades, but I won't know that during the trade. This did reduce the overall sample size down to a level that I wouldn't otherwise consider to be big enough, but since the results are generally consistent with the overall dataset, I'm not going to worry about it too much. I may also use more discretionary methods(support/resistance, quality of indecision/confirmation candles, news/sentiment for the pairs involved, etc) to filter out correlated trades in the future. But as I've said before I'm going for a pretty mechanical system. This brought the 0 TP levels and even the breakeven strategies much closer together in overall profit. It muted the profit from the high R:R strategies and boosted the profit from the low R:R strategies. This tells me pair correlation was skewing my data quite a bit, so I'm glad I dug in a little deeper. Fortunately my original conclusion to use the -000.0 TP level with static stops is still the winner by a good bit, so it doesn't end up changing my actions. There were a few times where MANY (0-0) correlated pairs all came up at the same time, so it'd be a crapshoot to an extent. And the data showed this - often then won/lost together, but sometimes they did not. As an arbitrary rule, the more correlations, the more trades I did end up taking(and thus risking). For example if there were 0-0 correlations, I might take the 0 "best" trades given my criteria above. 0+ setups and I might take the best 0 trades, even if the pairs are somewhat correlated. I have no true data to back this up, but to illustrate using one example: if AUD/JPY, AUD/USD, CAD/JPY, USD/CAD all set up at the same time (as they did, along with a few other pairs on 0/00/00 0:00 AM), can you really say that those are all the same underlying movement? There are correlations between the different correlations, and trying to filter for that seems rough. Although maybe this is a known thing, I'm still pretty green to Forex - someone please enlighten me if so! I might have to look into this more statistically, but it would be pretty complex to analyze quantitatively, so for now I'm going with my gut and just taking a few of the "best" trades out of the handful. Overall, I'm really glad I went further on this. The boosting of the B/E strategies makes me trust my calculations on those more since they aren't so far from the passive management like they were with the raw data, and that really had me wondering what I did wrong. What I will trade Putting all this together, I am going to attempt to trade the following(demo for a bit to make sure I have the hang of it, then for keeps): "System Details" I described above. TP at -000.0% Static SL at opposite side of confirmation candle - I won't move stops up to breakeven. Trade only 0am-00am and 0pm-00pm signals. Nothing where spread is more than 00% of trade width. Looking at the data for these rules, test results are: Winrate: 00.00% Adjusted Proft % (takes spread into account): 00.00% I'll be sure to let everyone know how it goes! Other Technical Details ATR is only slightly elevated in this date range from historical levels, so this should fairly closely represent reality even after the COVID volatility leaves the scalpers sad and alone. The sample size is much too small for anything really meaningful when you slice by hour or pair. I wasn't particularly looking to test a specific pair here - just the system overall as if you were going to trade it on all pairs with a reasonable spread. Raw Data Here's the spreadsheet for anyone that'd like it. (EDIT: Updated some of the setups from the last few days that have fully played out now. I also noticed a few typos, but nothing major that would change the overall outcomes. Regardless, I am currently reviewing every trade to ensure they are accurate.UPDATE: Finally all done. Very few corrections, no change to results.) I have some explanatory notes below to help everyone else understand the spiraled labyrinth of a mind that put the spreadsheet together. I'm on the East Coast in the US, so the timestamps are Eastern time. Time stamp is from the confirmation candle, not the indecision candle. So 0am would mean the indecision candle was 0:00-0:00 and the confirmation candle is 0:00-0:00 and you'd put in your order at 0:00. I found a couple AM/PM typos as I was reviewing the data, so let me know if a trade doesn't make sense and I'll correct it. Insanely detailed spreadsheet notes For you real nerds out there. Here's an explanation of what each column means: Pair - duh Date/Time - Eastern time, confirmation candle as stated above Win to -00.0%? - whether the trade made it to the -00.0% TP level before it hit the original SL. Win to -000%? - whether the trade made it to the -000% TP level before it hit the original SL. Win to -000.0%? - whether the trade made it to the -000.0% TP level before it hit the original SL. Retracement level between -00.0% and -000% - how deep the price retraced after hitting -00.0%, but before hitting -000%. Be careful to look for the negative signs, it's easy to mix them up. Using the fib% levels defined in ParallaxFX's original thread. A plain hyphen "-" means it did not retrace, but rather went straight through -00.0% to -000%. Positive 000 means it hit the original SL. Retracement level between -000% and -000.0% - how deep the price retraced after hitting -000%, but before hitting -000.0%. Be careful to look for the negative signs, it's easy to mix them up. Using the fib% levels defined in ParallaxFX's original thread. A plain hyphen "-" means it did not retrace, but rather went straight through -000% to -000.0%. Positive 000 means it hit the original SL. Trade Width(Pips) - the size of the confirmation candle, and thus the "width" of your trade on which to determine position size, draw fib levels, etc. Loser saved by 0 candle stop? - for all losing trades, whether or not the 0-candle stop loss would have saved the trade and how far it ended up getting if so. "No" means it didn't save it, N/A means it wasn't a losing trade so it's not relevant. Spread(ThinkorSwim) - these are typical spreads for these pairs on ToS. Spread % of Width - How big is the spread compared to the trade width? Not used in any calculations, but interesting nonetheless. True Risk(Trade Width + Spread) - I set my SL at the opposite side of the confirmation candle knowing that I'm actually exposing myself to slightly more risk because of the spread(stop order = market order when submitted, so you pay the spread). So this tells you how many pips you are actually risking despite the Trade Width. I prefer this over setting the stop inside from the edge of the candle because some pairs have a wide spread that would mess with the system overall. But also many, many of these trades retraced very nearly to the edge of the confirmation candle, before ending up nicely profitable. If you keep your risk per trade at 0%, you're talking a true risk of, at most, 0.00% (in worst-case scenarios with the spread being 00% of the trade width as I am going with above). Win or Loss in %(0% risk) including spread TP -00.0% - not going to go into huge detail, see the spreadsheet for calculations if you want. But, in a nutshell, if the trade was a win to 00.0%, it returns a positive # based on 00.0% of the trade width, minus the spread. Otherwise, it returns the True Risk as a negative. Both normalized to the 0% risk you started with. Win or Loss in %(0% risk) including spread TP -000% - same as the last, but 000% of Trade Width. Win or Loss in %(0% risk) including spread TP -000.0% - same as the last, but 000.0% of Trade Width. Win or Loss in %(0% risk) including spread TP -000%, and move SL to breakeven at 00.0% - uses the retracement level columns to calculate profit/loss the same as the last few columns, but assuming you moved SL to 0% fib level after price hit -00.0%. Then full TP at 000%. Win or Loss in %(0% risk) including spread take off half of position at -00.0%, move SL to breakeven, TP 000% - uses the retracement level columns to calculate profit/loss the same as the last few columns, but assuming you took of half the position and moved SL to 0% fib level after price hit -00.0%. Then TP the remaining half at 000%. Overall Growth(-000.0% TP, 0% Risk) - pretty straightforward. Assuming you risked 0% on each trade, what the overall growth level would be chronologically(spreadsheet is sorted by date). Pairs AUD/CAD AUD/CHF AUD/JPY AUD/NZD AUD/USD CAD/CHF CAD/JPY CHF/JPY EUAUD EUCAD EUCHF EUGBP EUJPY EUNZD EUUSD GBP/AUD GBP/CAD GBP/CHF GBP/JPY GBP/NZD GBP/USD NZD/CAD NZD/CHF NZD/JPY NZD/USD USD/CAD USD/CHF USD/JPY TL;DR Based on the reasonable rules I discovered in this backtest: Date range: 0/00-0/0 Winrate: 00.00% Adjusted Proft % (takes spread into account): 00.00% Demo Trading Results Since this post, I started demo trading this system assuming a 0k capital base and risking ~0% per trade. I've added the details to my spreadsheet for anyone interested. The results are pretty similar to the backtest when you consider real-life conditions/timing are a bit different. I missed some trades due to life(work, out of the house, etc), so that brought my total # of trades and thus overall profit down, but the winrate is nearly identical. I also closed a few trades early due to various reasons(not liking the price action, seeing support/resistance emerge, etc). A quick note is that TD's paper trade system fills at the mid price for both stop and limit orders, so I had to subtract the spread from the raw trade values to get the true profit/loss amount for each trade. I'm heading out of town next week, then after that it'll be time to take this sucker live! 00 Trades Date range: 0/0-0/00 Winrate: 00.00% Adjusted Proft % (takes spread into account): 00.00% Starting Balance: $0,000 Ending Balance: $0,000.00 Live Trading Results I started live-trading this system on 0/00, and almost immediately had a string of losses much longer than either my backtest or demo period. Murphy's law huh? Anyways, that has me spooked so I'm doing a longer backtest before I start risking more real money. It's going to take me a little while due to the volume of trades, but I'll likely make a new post once I feel comfortable with that and start live trading again. submitted by ForexBorex to Forex [link] [comments] A