Posts Tagged ‘trading system’

High-Frequency Trading: Something Black?

High-Frequency Trading: Something Black?

Courtesy of Karl Denninger at The Market Ticker 

Now this is interesting, coming from the annual "black hat" conference in Las Vegas (for those not involved in the computer security world, that’s an annual gathering of hackers where various presentations are made that amount to brags and bags that have or can be run on various parts of information technology):

Among the talks conspicuously absent from this year’s schedule: a presentation exposing security vulnerabilities in banks’ high-speed trading systems.

The talk, planned by security researchers Varun Uppal and Gyan Chawdhary, would have dealt with methods for hiding risky unauthorized trades in high-speed trading applications, as well as demonstrating a "sniffing" software tool capable of siphoning trading information to a faraway hacker to allow a high-tech form of real-time insider trading. But Uppal tells us that the talk has been cancelled after concerns were raised by a financial industry client of the security auditing firm he works for, Information Risk Management.

Methods eh?

I suppose we’re supposed to believe that this is all theoretical, right?

Oh, somehow I doubt it.

And why?

Well, it wouldn’t have anything to do with firms intentionally ignoring security capabilities for reasons of SPEED, would it?  (Note that encryption, in particular, is rather slow comparatively.  Plain text is of course very fast.)

While security measures for FIX programs are available, Uppal says he’s audited firms that ignore them for convenience or speed. Uppal says that could allow a hacker to monitor a bank’s trades and make near-simultaneous ones, or even steal a bank’s unique trading algorithm.

Oh, they would do that.  That’s very nice.

New?  Oh no.  It’s not new either

In a 2007 Black Hat presentation, David Goldsmith and Jeremy Rauch of Matasano Security listed systematic problems with the security of high speed trading systems such as the difficulty of encrypting trade data and banks’ reluctance to add any security that might slow down the transactions,

Right.  Speed before security.  Engage in an arms race and if someone else gets unlawful advantage as a consequence of your refusal to follow best practices, well, that’s too damn bad.

Let’s contrast that with what happens in the Interbank (e.g. Visa, MasterCard, Discover, etc) networks.  There if you store unencrypted cardholder data (it’s faster and easier!) or if you use unencrypted transport between…
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Trend Models – Tutorial

This post is from Allan who wrote this for me after I asked him how his trading system works and what he’s doing with his newly launched newsletter, Trend Following Trading Models.  

In case you’re wondering after reading this article, the daily chart on Google has a sell signal while the weekly chart is on a buy. So if you’re trading this system with a short-term time frame, you’re short, and if you’re trading this system with a long-term time frame, you’re long. And if you’re using the daily as a filter, as Allan does, you’re flat – meaning the divergence between the daily and the weekly is sending you to the sidelines. - Ilene   

Trend Models – Tutorial

Courtesy of Allan 

This morning I want to explain my Trend Models and how they work. 

I started a newsletter service on January 2, 2010 and just a few days later the first stock trade idea was sent to the list, via my trend model system. Here’s the trade, featuring Google.

Thursday Morning, January 7, 2010 7:53 AM:

 Trade Idea : Short GOOG
 

As you can see from the above chart, GOOG closed Wednesday below it’s trend line (solid navy line) and generated a SHORT signal @ 608.  The previous signal was a LONG generated November 9, 2009 @ 562.  

The early January SHORT was closed out on March 3rd at 545, for a gain on the trade of about 63 points:

That is pretty much the entire system, LONG above the trend lines and SHORT below them.  The system works on all time periods, below is the GOOG Weekly chart:

You can see from the interaction of prices and the trend line how effective the Weekly trend is on being on the right side of GOOG.  After the close each day I update the status of trends on Daily and Weekly charts for about 50 different stocks and ETF’s.  They all are not as effective as the GOOG trends, but most are and even if you only traded GOOG (some subscribers do just that), you should be able see the benefit of knowing where the trend line is, either above or below prices, for any…
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Zero Hedge

WeWork Board, Softbank Officials Push For CEO Neumann's Ouster

Courtesy of ZeroHedge View original post here.

The odds of WeWork co-founder and CEO Adam Neumann becoming "the world's first trillionaire"  maybe about to take another major hit.

In what appears to be the latest attempt to salvage the farce that is the WeWork IPO (and the massive hole it will leave in Masayoshi Son's balance sheet and credibility), ...



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Insider Scoop

Notable Insider Buys In The Past Week: AbbVie, Kraft Heinz And More

Courtesy of Benzinga

Insider buying can be an encouraging signal for potential investors.

A packaged food giant and two drugmakers saw notable insider buying activity this past week.

Some of this insider buying occurred alongside insider sales.

Conventional wisdom says that insiders and 10% owners really only buy shares of a company for one reason — they believe the stock price will rise and they want to profit. So insider...



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Phil's Favorites

Peloton IPO Guide... And Why It Makes No Sense

Courtesy of ZeroHedge

By Scott Willis via Grizzle.com

BOTTOM LINE

At the end of the day, Peloton is a gym membership pretending to be a tech company.

We fully admit the product is exciting and unique in the market, but Peloton still faces the same problem...



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Digital Currencies

Buyer beware: How Libra differs from Bitcoin

 

Buyer beware: How Libra differs from Bitcoin

Recent revelations about the lack of privacy protections in place at the companies involved in Facebook’s new Libra crytocurrency raise concerns about how much trust users can place in Libra. (Shutterstock)

Courtesy of Alfred Lehar, University of Calgary

Facebook, the largest social network in the world, stunned the world earlier this year with the announcement of its own cryptocurrency, Libra.

The launch has raised questions about the difference between Libra and existing cryptocurrencies, as well as the implications of private companies competing with s...



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Lee's Free Thinking

Look Out Bears! Fed New QE Now Up to $165 Billion

Courtesy of Lee Adler

I have been warning for months that the Fed would need new QE to counter the impact of massive waves of Treasury supply. I thought that that would come later, rather than sooner. Sorry folks, wrong about that. The NY Fed announced another round of new TOMO (Temporary Open Market Operations) today.

In addition to the $75 billion in overnight repos that the Fed issued and has been rolling over since Tuesday, next week the Fed will issue another $90 billion. They’ll come in the form of three $30 billion, 14 day repos to be offered next week.

That brings the new Fed QE to a total of $165 billion. Even in the worst days of the financial crisis, I can’t remember the Fed ballooning its balance sheet by $165 bi...



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The Technical Traders

Is A Price Revaluation Event About To Happen?

Courtesy of Technical Traders

Skilled technical traders must be aware that price is setting up for a breakout or breakdown event with recent Doji, Hammer
and other narrow range price bars.  These types of Japanese Candlestick patterns are warnings that price is coiling into
a tight range and the more we see them in a series, the more likely price is building up some type of explosive price breakout/breakdown move in the near future.  The ES (S&P 500 E-mini futures) chart is a perfect example of these types of price bars on the Daily chart (see below).

Tri-Star Tops, Three River Evening Star patterns, Hammers/Hangmen and Dojis are all very common near extreme price peaks and troughs.  The rea...



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Kimble Charting Solutions

India About To Experience Major Strength? Possible Says Joe Friday

Courtesy of Chris Kimble

If one invested in the India ETF (INDA) back in January of 2012, your total 7-year return would be 24%. During the same time frame, the S&P 500 made 124%. The 7-year spread between the two is a large 100%!

Are things about to improve for the INDA ETF and could it be time for the relative weakness to change? Possible!

This chart looks at the INDA/SPX ratio since early 2012. The ratio continues to be in a major downtrend.

The ratio hit a 7-year low a few months ago and this week it kissed those lows again at (1). The ratio near weeks end is attempting to...



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Chart School

Crude Oil Cycle Bottom aligns with Saudi Oil Attack

Courtesy of Read the Ticker

Do the cycles know? Funny how cycle lows attract the need for higher prices, no matter what the news is!

These are the questions before markets on on Monday 16th Aug 2019:

1) A much higher oil price in quick time can not be tolerated by the consumer, as it gives birth to much higher inflation and a tax on the average Joe disposable income. This is recessionary pressure.

2) With (1) above the real issue will be the higher interest rate and US dollar effect on the SP500 near all time highs.

3) A moderately higher oil price is likely to be absorbed and be bullish as it creates income for struggling energy companies and the inflation shock may be muted. 

We shall see. 

...

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Biotech

The Big Pharma Takeover of Medical Cannabis

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

 

The Big Pharma Takeover of Medical Cannabis

Courtesy of  , Visual Capitalist

The Big Pharma Takeover of Medical Cannabis

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless co...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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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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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About Ilene:

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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