Posts Tagged ‘price information’

Rise of the Machines

Rise of the Machines

the terminatorCourtesy of Tim at The Psy-Fi Blog

High Frequency Trading

Proponents of high frequency trading tell us that they’re doing us all a service by improving liquidity in markets, which supposedly benefits everyone. However, to implement their strategy they’re prepared to pay a fee to get microscopically early access to prices. So, if you take the liquidity argument seriously, this suggests that these altruistic traders are paying stockmarket operators to give the rest of us a free ride, out of the kindness of their hearts.

Presumably no one really believes this. However, the trouble is that the rise of the machines exposes the fragile markets of the world to yet another possible source of mass extinction. Time for the Terminator. Again.

Automated and Algorithmic

The concept behind high frequency trading is simple. Practitioners pay a fee to markets to get access to real-time data a tiny fraction ahead of everyone else and then hugely powerful computer systems driven by automated trading software search out short term pricing anomalies and seek to exploit them.

Hidden deep behind this is the idea that although stock prices theoretically follow a random walk – which essentially means that a stock’s price in future is not predictable from its price now (which would thus instantly invalidate a thousand trading strategies) – there is evidence of autocorrelation in markets which says that this isn’t quite true. As Campbell, Lo and MacKinley put it in The Econometrics of Financial Markets:

"The fine structure of securities markets and frictions in the trading process can generate predictability. Time-varying expected returns due to changing business conditions can generate predictability. A certain degree of predictability may be necessary to reward investors for bearing certain dynamic risks."

It may be a wild shot in the dark but I’m guessing the authors think that there may be some predictability in market behaviour. The evidence they quote supports them.

Short-term trading techniques aim to exploit this asymmetry in markets. However, the ultra-fast reaction times of the latest market networks and the power of the supercomputers employed has changed the rules. These systems give the high frequency traders a tiny and fleeting advantage over other market participants. Tiny and fleeting, however, can be enough to make lots and lots of money if you do it often enough.

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Phil's Favorites

Ray Dalio Is Kinda, Sorta, Really Wrong, Part 2

 

Ray Dalio Is Kinda, Sorta, Really Wrong, Part 2

Courtesy of John Mauldin, Thoughts from the Frontline

Last week we started a mini-series in the form of an open letter responding to a series of essays by Ray Dalio, the founder of Bridgewater Associates. I wrote that he was kinda, sorta wrong in Why and How Capitalism Needs to Be Reformed, Parts 1 and 2 but really, really wrong in ...



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Zero Hedge

Hong Kong Rocked By Biggest March Yet After Extradition Bill Pulled; Millions Demand Lam Resign

Courtesy of ZeroHedge. View original post here.

Despite City Executive Carrie Lam's major concession to the protest movement - that is, the (not really) 'indefinite' suspension of the extradition bill that catalyzed the protests - a planned protest march went ahead as scheduled on Sunday, marking the second consecutive Sunday of street protests in Hong Kong.

...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Kimble Charting Solutions

Gold Bugs Index Attempting 8-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble.

Are Gold Bugs fans about to receive positive news they haven’t had in years? Possible!

This chart looks at the Gold Bugs Index (HUI) on a weekly basis over a couple of decades. The index has spent the majority of the past 20-year inside of rising channel (1).

The index hit the top of the channel in 2011, where it peaked and started creating a series of lower highs for the past 8-years, which has formed line (2).

The index is now kissing the underside of falling resistance and the underside the 2016/2017 lows at (3).

Joe Friday Just The Fa...



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Insider Scoop

Wedbush: Apple's Stock Could Gain $20-$25 From US-China Trade Deal

Courtesy of Benzinga.

The Sino-American trade dispute and near-term developments could prove to be a "major swing factor" for Apple Inc. (NASDAQ: AAPL), according to Wedbush.

The Analyst

Daniel Ives maintained an Outperform rating on Apple with an unchanged $235 pric...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Chart in video

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If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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