We have 4 predominant approaches to market analysis: 1. Common sense: Choosing the right blend of assets in the first place, buy with discount, not getting greedy, see where the market is going. 2. Psychological: Seasonality, Elliot waves, support/resistance, dead cat bounce, retail investor behavior, algorithmic slippage. 3. Fundamental: Accounting ratios, long term indicators and …
Rebalancing
To reduce the psychological pressure, we do not want to modify the amount of money committed to investment beyond the monthly saving/using rate. Instead we use rebalancing tactics. The idea is pretty simple. If we have a portfolio of assets, we could improve the alpha of the portfolio (risk-adjusted reward) by combining uncorrelated bets. If …
Booklets
Trading tactics tips: Money management system full in-depth guide to trader psychology. Trader checklist a list of things to follow when trading. Behavioral aspects: behavioral science a list of trader biases. More behavior more reasons for failure Yet more reasons for failure I love: traders loose when they took positions that are too big. Charting …
Time scale and risk element
We assume that the readers are disciplined and trust statistical tools. Furthermore diversification and tracking enables some higher risk tolerance. The factor that limits diversification is ignorance. The highest risk element is the trader’s psychology. Various personal biases cause illogical trade decision. To remove the psychological element we limit time scale exposure (opposing trends), and …
Classes of assets
Our strategy is built from generating classes of assets and tailoring the tactics per class. The criteria for classification: 1. Trading speed: position [slow, expected to hold for months], swing-trading [mid-speed, daily oversight required] , day-trading [highly risky, should be checked every 30 min or so] 2. Risk level: leverage, beta of the underlying asset, …
Tools ideas
The tools we are building should allow the following: 1. Generate a wishlist of stocks for further use according to diversification sections 2. Select from wishlist stocks into portfolio, calculate beta and std 3. Backtest the portfolio of drawdown, upside etc 4. Analyze the whole market according to index/sector. 5. Generate timed signals for buy/sell. …
Site structure
The most visited part of the site is the Tools category with various charting and portfolio management tools. The Tactics category has our strategies and tactics. In the Analysis section try to outline long-term trends and correlations In the News section we put links to daily and weekly news and signals
Daily status
-Gas is up again due to cold weather forecast. Expected to nosedive when the cold is over due to excess production. -Oil is going further down. -Dollar reaches all time high. -Stocks try to recover Dec 31 losses following the dollar.
Analysis 2015 Q1
Since the QE program has ended and the rate will be coming up in April, Q1 2015 is going to be nervous [line December 2014]. -The crude oil price will drop to 45$ stay there for 3 months and then go up very fast to 80$. -Defensive sectors like Utility, Healthcare and Consume Staples are …
Gold prices
Gold is currently deflating. Approximately 50% of gold is bought by China for reserves and by India for private use. There is a danger Russia will use its gold if RUB is pressured. Gold tracks inversely with dollar due to inflation/deflation cycle. Mining companies and silver do not fully follow gold prices but have similar …