In my time trading forex, I never really stopped to consider the physicality of it all. We're dealing with real money here. Most of it is paper mind you, but it's physical nonetheless. And it's being exchanged for goods and services. People are collecting it, spending it, or simply wishing for it. In general more people understand and are involved in the stock markets, but honestly the currency markets play a much more vital role in there lives.
Now despite the dollar gloom and doom, we're in luck that our currency is one of many fiat currencies trending to zero. Since the rates change at any time, we're not always winning that race (here's to hoping the dollar comes in last, cheers). We can look to our European friends to find several examples of failed currencies, not only within my lifetime, but also my trading lifetime. The Turkish lira, and the Icelandic krona to name a couple. I remember watching the bid price on kronas blow up live. What a crazy day that was! However, I was not in Iceland at the time, nor invested in the currency. What happened on the ground when the paper became worthless? What did people do?
This past week I got to experience the fragile beginnings of such an event. Visiting Hungary let me see and touch the bills that may one day be worthless or otherwise replaced. Hungary has never quite recovered from the 2008 financial crisis and the pain is getting worse. Having accepted one IMF bailout, they find themselves asking for another.
So what did the country look like? The bars certainly seemed full. The streets still busy and the restaurants still serving food. Yet there were rallies and protests in front of the parliament building, and whispers on the streets. Currency was leaving the country and locals talked of moving money to nearby Austria and other foreign banks. The feeling in the air was a nervous laughter, ripe with anticipation of knowing what must come, while still hoping it wouldn't.
So what does the collapse of the dollar look like? What will history say? I can imagine a similar story when the time comes.
Showing posts with label life. Show all posts
Showing posts with label life. Show all posts
1.20.2012
11.08.2011
Jesse Livermore, speculation, and people
I just finished re-reading Jesse Livermore's auto-biography,Reminiscences of a Stock Operator. What a wonderful read. In this post besides advocating anyone who hasn't yet read the text do so (you can find it FREELY available here: http://www.archive.org/details/ReminiscencesOfAStockOperator), I wanted to highlight a couple quotes from the book on people:
"I absolutely believe that price movement patterns are being repeated. They are recurring patterns that appear over and over, with slight variations. This is because markets are driven by humans and human nature never changes"
"On the other hand there is profit in studying the human factors, the ease with which human beings believe what it pleases them to believe; and how they allow themselves indeed, urge themselves to be influenced by their cupidity or by the dollar-cost of the average man's carelessness. Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was. Weapons change, but strategy remains strategy, on the New York Stock exchange as on the battlefield. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared: "The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.""
"The message of the tape is the same. That will be perfectly plain to anyone who will take the trouble to think. He will find if he asks himself questions and considers conditions, that the answers will supply themselves directly. But people never take the trouble to ask questions, leave alone seeking answers. The average American is from Missouri everywhere and at all times except when he goes to the brokers' offices and looks at the tape, whether it is stocks or commodities. The one game of all games that really requires study before making a play is the one he goes into without his usual highly intelligent preliminary and precautionary doubts. He will risk half his fortune in the stock market with less reflection than he devotes to the selection of a medium-priced automobile."
On the surface, Livermore traded in a completely different world. Insider trading was rampant, stock manipulation and tip buy/selling was popular, bank runs were common... Hah, see not so different after all? In truth however, humans are the same. The same emotions that drove and controlled the market in Livermore's time do so today. We simply need to accept and understand this. I'll include a few more highlighting the inherent laziness and gullibility of man.
"The average man doesn't wish to be told that it is a bull or bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn't even wish to have to think. It is too much bother to have to count the money that he picks up from the ground."
"At first, when I listened to the accounts of old-time deals and devices I used to think that people were more gullible in the 1860's and 70's than in the 1900's. But I was sure to read in the newspapers that very day or the next something about the latest Ponzi or the bust-up of some bucketing broker and about the millions of sucker money gone to join the silent majority of vanished savings."
How true! There is nothing new under the sun1! Re-reading Livermore's observations brings to mind the recent EVE Online ponzi scheme that rather successfully executed it's mission, netting a cool ~50k USD for its creators2.
All said, I will be continuing to study people. In understanding people, I will understand markets.
1. Ecclesiastes 1:9
2. http://www.evenews24.com/2011/08/14/the-1-trillion-isk-ponzi-phaser-inc-speaks/
"I absolutely believe that price movement patterns are being repeated. They are recurring patterns that appear over and over, with slight variations. This is because markets are driven by humans and human nature never changes"
"On the other hand there is profit in studying the human factors, the ease with which human beings believe what it pleases them to believe; and how they allow themselves indeed, urge themselves to be influenced by their cupidity or by the dollar-cost of the average man's carelessness. Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was. Weapons change, but strategy remains strategy, on the New York Stock exchange as on the battlefield. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared: "The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.""
"The message of the tape is the same. That will be perfectly plain to anyone who will take the trouble to think. He will find if he asks himself questions and considers conditions, that the answers will supply themselves directly. But people never take the trouble to ask questions, leave alone seeking answers. The average American is from Missouri everywhere and at all times except when he goes to the brokers' offices and looks at the tape, whether it is stocks or commodities. The one game of all games that really requires study before making a play is the one he goes into without his usual highly intelligent preliminary and precautionary doubts. He will risk half his fortune in the stock market with less reflection than he devotes to the selection of a medium-priced automobile."
On the surface, Livermore traded in a completely different world. Insider trading was rampant, stock manipulation and tip buy/selling was popular, bank runs were common... Hah, see not so different after all? In truth however, humans are the same. The same emotions that drove and controlled the market in Livermore's time do so today. We simply need to accept and understand this. I'll include a few more highlighting the inherent laziness and gullibility of man.
"The average man doesn't wish to be told that it is a bull or bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn't even wish to have to think. It is too much bother to have to count the money that he picks up from the ground."
"At first, when I listened to the accounts of old-time deals and devices I used to think that people were more gullible in the 1860's and 70's than in the 1900's. But I was sure to read in the newspapers that very day or the next something about the latest Ponzi or the bust-up of some bucketing broker and about the millions of sucker money gone to join the silent majority of vanished savings."
How true! There is nothing new under the sun1! Re-reading Livermore's observations brings to mind the recent EVE Online ponzi scheme that rather successfully executed it's mission, netting a cool ~50k USD for its creators2.
All said, I will be continuing to study people. In understanding people, I will understand markets.
1. Ecclesiastes 1:9
2. http://www.evenews24.com/2011/08/14/the-1-trillion-isk-ponzi-phaser-inc-speaks/
11.05.2011
Gaming and Trading
I have been undertaking further study of people. The analytic mind is constantly amazed at what others will do. Indeed, when time and abstraction from the situation allow, my own actions are utterly confusing for me to understand.
To this end, I got into online gaming. Specifically, online PVP or player versus player gaming. Obviously while exciting to play, playing against a computer has no comparison in dealing with a human opponent. While I did chose a game I enjoyed playing, I also made sure to chose something which required team play. That's right, while the game was PVP, it required playing as a team with 2, 3, or 4 other people you may or may not know. Success came to those who understood how people work, how to be a leader, how to motivate; indeed how to succeed at a common goal when given a random selection of people. Alexander the Great's success can be attributed to his mastery of this skill.
This gaming binge culminated in me running a semi-professional team, entering contests for real money (who knew people would pay to watch this?) and competing with other teams. I must tell you from the start that this ended as one can expect. We had some great early successes, but slowly and surely personalities began to outshine our success. Being human, mistakes are inevitable. As the fearless leader, I ultimately saw the team disband after an especially egregious series of mistakes and loses. It's almost like a bad dream. In just 2 short hours we went from a successful, united team to splintered and disbanded.
So what happened? In short, people. I had lessons yet to be learned on understanding people's actions and taking control. While this spectacular defeat is meaningless in the grand scheme of life, it's lessons are not. I experienced all portions of the emotional spectrum while undertaking play. I have raged, confronted my own disappointment and fears, and accomplished my own goals through what can only be called undying perseverance and study. It must be said I am not a gamer. This PC upon which I type is not a "gaming rig". I didn't have all the best tools, nor the natural skill that would allow me to succeed. But succeed I did. Before I ended the experiment a few weeks ago, I rose to the top 15% of players, the small percentage who can say they have a > 55% winning percentage1.
So what does this have to do with trading? Well, the untold story above is what it cost me. I said I accomplished my goals, but it was a year long struggle. My devotion and study was immense. I had to learn many lessons the hard way, and not unlike trading, had to pay my dues. Digging myself into a hole only made my eventual rise that much more difficult, but it also allowed it to be more rewarding.
Trading is about people. People make markets. To pit your brain and might against another is the greatest thrill in the world. To walk away successful is to know no greater joy. So many lessons have been learned about people, about leadership, and about anticipating other actions. I hope to apply these thoughts into my future strategies and having learned these lessons in a virtual world I trust I can carry at least some of the answers into the real world.
1. It's interesting to note a vast majority of people never rise above a 50% win ratio, many never even coming close. This corresponds extremely well to what we find in trading. It's the top 5% in trading who are truly successful, perhaps 10% more who manage to scrape by with minor success. The overwhelmingly majority hardly break even, with most losing much more than they win.
To this end, I got into online gaming. Specifically, online PVP or player versus player gaming. Obviously while exciting to play, playing against a computer has no comparison in dealing with a human opponent. While I did chose a game I enjoyed playing, I also made sure to chose something which required team play. That's right, while the game was PVP, it required playing as a team with 2, 3, or 4 other people you may or may not know. Success came to those who understood how people work, how to be a leader, how to motivate; indeed how to succeed at a common goal when given a random selection of people. Alexander the Great's success can be attributed to his mastery of this skill.
This gaming binge culminated in me running a semi-professional team, entering contests for real money (who knew people would pay to watch this?) and competing with other teams. I must tell you from the start that this ended as one can expect. We had some great early successes, but slowly and surely personalities began to outshine our success. Being human, mistakes are inevitable. As the fearless leader, I ultimately saw the team disband after an especially egregious series of mistakes and loses. It's almost like a bad dream. In just 2 short hours we went from a successful, united team to splintered and disbanded.
So what happened? In short, people. I had lessons yet to be learned on understanding people's actions and taking control. While this spectacular defeat is meaningless in the grand scheme of life, it's lessons are not. I experienced all portions of the emotional spectrum while undertaking play. I have raged, confronted my own disappointment and fears, and accomplished my own goals through what can only be called undying perseverance and study. It must be said I am not a gamer. This PC upon which I type is not a "gaming rig". I didn't have all the best tools, nor the natural skill that would allow me to succeed. But succeed I did. Before I ended the experiment a few weeks ago, I rose to the top 15% of players, the small percentage who can say they have a > 55% winning percentage1.
So what does this have to do with trading? Well, the untold story above is what it cost me. I said I accomplished my goals, but it was a year long struggle. My devotion and study was immense. I had to learn many lessons the hard way, and not unlike trading, had to pay my dues. Digging myself into a hole only made my eventual rise that much more difficult, but it also allowed it to be more rewarding.
Trading is about people. People make markets. To pit your brain and might against another is the greatest thrill in the world. To walk away successful is to know no greater joy. So many lessons have been learned about people, about leadership, and about anticipating other actions. I hope to apply these thoughts into my future strategies and having learned these lessons in a virtual world I trust I can carry at least some of the answers into the real world.
1. It's interesting to note a vast majority of people never rise above a 50% win ratio, many never even coming close. This corresponds extremely well to what we find in trading. It's the top 5% in trading who are truly successful, perhaps 10% more who manage to scrape by with minor success. The overwhelmingly majority hardly break even, with most losing much more than they win.
4.17.2011
Why exits are more important than entries
Often when looking at trading strategies you find yourself looking for keys to figure out the start of a breakout or trend. Jumping on-board when a trend is starting ensures you have a good ride on the trend for healthy profits. But focusing on the entry point is flawed logic. It is the exit point that determines your profit, and ultimately, your success.
Exits are much harder to get right. Whenever you start something you have to think about your exit strategy. It's so easy in the beginning to get into a trade; think about the end. I find the end of something is far more interesting and telling than the beginning. This applies not only to trading, but life as well. Look over your trades for the last week. When did you exit the trade? Why? Don't get caught up on the P/L, or attempt to optimize the exit based on hindsight. You need to understand the raw thought process behind your exit. Study yourself, watch yourself. You'll find your logic may or may not hold when examined after the situation.
A wise sailor once told me, better to be on land wishing you were sailing, than sailing wishing you were on land. It sounds cliched, I know; but think before you trade. Not about profits, entries, or leverage, rather focus on how you're going to get out of the trade.
For myself, I think it's time I changed my exit strategies to be more focused for success, instead of minimizing damage. I guess one should play to the outcome you wish to see, and not the outcome you're trying to avoid.
Exits are much harder to get right. Whenever you start something you have to think about your exit strategy. It's so easy in the beginning to get into a trade; think about the end. I find the end of something is far more interesting and telling than the beginning. This applies not only to trading, but life as well. Look over your trades for the last week. When did you exit the trade? Why? Don't get caught up on the P/L, or attempt to optimize the exit based on hindsight. You need to understand the raw thought process behind your exit. Study yourself, watch yourself. You'll find your logic may or may not hold when examined after the situation.
A wise sailor once told me, better to be on land wishing you were sailing, than sailing wishing you were on land. It sounds cliched, I know; but think before you trade. Not about profits, entries, or leverage, rather focus on how you're going to get out of the trade.
For myself, I think it's time I changed my exit strategies to be more focused for success, instead of minimizing damage. I guess one should play to the outcome you wish to see, and not the outcome you're trying to avoid.
4.04.2011
On being away
I've been way undertaking a study of man. Of his creations, the cities and their history. There is something that you can take away from a place. Seeing to the extent possible those places and things that others before you have seen and walked. Who can understand the birth of Wall Street, or the spirit of the same place in the 1950's without seeing it?
Who would say "no" to visiting the Bahamas in the 1960's? How about the same place in the 1920's? I think Jesse Livermore had the proper idea in his "Reminiscences of a Stock Operator". Taking a month to fish in the Bahamas -- being totally removed from any knowledge of something as simple as the price of wheat or the latest quote on GOOG. Those sorts of disconnected experiences are hard to come by now.
Time and place are a unique combination in life. They can't be recreated. We all have unique opportunities to experience during our allotted time here on earth. While hindsight is 20/20, we can still seek out those times and places that others may one day speak of and think about. It is a worthwhile endeavor to see not only the birth, but also the life and death of a thing.
Who would say "no" to visiting the Bahamas in the 1960's? How about the same place in the 1920's? I think Jesse Livermore had the proper idea in his "Reminiscences of a Stock Operator". Taking a month to fish in the Bahamas -- being totally removed from any knowledge of something as simple as the price of wheat or the latest quote on GOOG. Those sorts of disconnected experiences are hard to come by now.
Time and place are a unique combination in life. They can't be recreated. We all have unique opportunities to experience during our allotted time here on earth. While hindsight is 20/20, we can still seek out those times and places that others may one day speak of and think about. It is a worthwhile endeavor to see not only the birth, but also the life and death of a thing.
3.29.2011
Living in the cloud
Mobility and moving around often has it's downsides. As I prep for yet another move, (I guess I just like change, or is it that I enjoy new experiences?) I decided to fix my current server instability.
Up until this point I have been self-hosted. I kept and maintained my own subversion server, in addition to the development workstation and application server for the bots to run on. And I had to keep those boxes plugged in and connected to the internet at all times. I remember coding the extensive disconnect logic for the (almost) daily disconnects that occurred at the one location I had the server running. Moving really threw a wrench into those plans. I had trouble keeping them plugged in and powered on, let alone connected to a high speed and stable connection.
When the time came for an extended trip, it was an easy decision to also give the bots a break. I did this mostly for myself, to allow my brain to focus on other tasks, but also to avoid having to deal with the server management while physically located thousands of miles away. They really have always belonged on a managed server. As of this past weekend, that's been corrected. I went with amazon ec2 -- it's completely scalable (and priced accordingly). The uptime, bandwidth and price cannot be beat. In fact, combined with wireless data on my android phone, I can admin the bots from anywhere. Having them running somewhere else and happily churning along is actually quite freeing. I check in once a day and look at the P/L's. So far, so good. I'm in love with the cloud. Now I need to move the subversion server also and everything will be migrated from my box.
Up until this point I have been self-hosted. I kept and maintained my own subversion server, in addition to the development workstation and application server for the bots to run on. And I had to keep those boxes plugged in and connected to the internet at all times. I remember coding the extensive disconnect logic for the (almost) daily disconnects that occurred at the one location I had the server running. Moving really threw a wrench into those plans. I had trouble keeping them plugged in and powered on, let alone connected to a high speed and stable connection.
When the time came for an extended trip, it was an easy decision to also give the bots a break. I did this mostly for myself, to allow my brain to focus on other tasks, but also to avoid having to deal with the server management while physically located thousands of miles away. They really have always belonged on a managed server. As of this past weekend, that's been corrected. I went with amazon ec2 -- it's completely scalable (and priced accordingly). The uptime, bandwidth and price cannot be beat. In fact, combined with wireless data on my android phone, I can admin the bots from anywhere. Having them running somewhere else and happily churning along is actually quite freeing. I check in once a day and look at the P/L's. So far, so good. I'm in love with the cloud. Now I need to move the subversion server also and everything will be migrated from my box.
3.24.2011
My awakening
I am awake again. I've re-entered the world of the trader. Sometimes your brain simply needs time away. In this case, I took quite a hiatus. I was not only physically away, but I left mentally as well. My absence was dominated by my own mind's need for data. I have need to understand people and places. My trip(s) placed me directly into the individual world's of others.
For example, standing on the street corner in New York, you will see many people. Some will be standing, others walking, perhaps some working and some sitting. If you force yourself to look closer you will see more than this.
There are several little worlds going on in that picture. Each one represents a person, a life, and a world all to themselves. The fascinating thing is that so many people can live so close, and be so physically close together and yet live in such separate worlds.
For example, standing on the street corner in New York, you will see many people. Some will be standing, others walking, perhaps some working and some sitting. If you force yourself to look closer you will see more than this.
There are several little worlds going on in that picture. Each one represents a person, a life, and a world all to themselves. The fascinating thing is that so many people can live so close, and be so physically close together and yet live in such separate worlds.
8.06.2010
How to deal with a financial planner (CFP)
Let's cut to the chase here -- I've been given "free" money. Not really, it's free! FREE! You just have to . . .
So started my newest conversation with a CFP / sales representative with a major bank / insurance company / mortgage lender / broker. No conflicts of interest here right? So a typical engagement involving what to do with the "free money" I'd been given. First, though my employeer had been oh so generous in providing matching funds when I contribute I still felt conned and shackled. Indeed, after a couple years of recieving the contributions, I ultimately stopped contributing anything to my 401k. Despite the matching funds and my foresight (or luck) to get out of the market before the big finacial fallout I still lost money. This was due to me being unable to chose the broker or investments to invest in. Sadly, this is steadily becoming worse as pension plans (and the impending bailout) are increasing displaced by lackluster retirement accounts. The laws can change at any time (and they will), but most are being misled into staking there life and work on a single number. It's a fools' game and I want no part.
So back to the CFP, what to do with him? I'm now being shown some boxes and asked to chose which one I like the best. Perhaps color plays a part here, or commissions, or just the person's current attitude and emotion1. The boxes of course are some sort of rehash of the MorningStar boxes which attempt to define risk and performance. A pretty graph of course shows you how the whole procedure will work. You contribute $X a week for XX years, and at the end of the rainbow *poof!* you retire a millionaire. Nonetheless, a choice is made and money starts to funnel. Into the acount, into the CFP's company coffers, and to those manipulating the investments.
I shake his hand, thank him for his time and in a flash he's gone. I feel ill and internally lash out against myself for not striving harder to take control.
How else can I deal with a CFP? I don't believe him. I don't want what he is selling. At the end of the day, he knows I'll sign the paper anyway. And so do I.
1. Seriously, I'm sure it would make a fascinating study of how the box is actually chosen. Assigning logic to the choice would only make explaining the choice worse. Human actions can be controlled, but not predicted :-)
So started my newest conversation with a CFP / sales representative with a major bank / insurance company / mortgage lender / broker. No conflicts of interest here right? So a typical engagement involving what to do with the "free money" I'd been given. First, though my employeer had been oh so generous in providing matching funds when I contribute I still felt conned and shackled. Indeed, after a couple years of recieving the contributions, I ultimately stopped contributing anything to my 401k. Despite the matching funds and my foresight (or luck) to get out of the market before the big finacial fallout I still lost money. This was due to me being unable to chose the broker or investments to invest in. Sadly, this is steadily becoming worse as pension plans (and the impending bailout) are increasing displaced by lackluster retirement accounts. The laws can change at any time (and they will), but most are being misled into staking there life and work on a single number. It's a fools' game and I want no part.
So back to the CFP, what to do with him? I'm now being shown some boxes and asked to chose which one I like the best. Perhaps color plays a part here, or commissions, or just the person's current attitude and emotion1. The boxes of course are some sort of rehash of the MorningStar boxes which attempt to define risk and performance. A pretty graph of course shows you how the whole procedure will work. You contribute $X a week for XX years, and at the end of the rainbow *poof!* you retire a millionaire. Nonetheless, a choice is made and money starts to funnel. Into the acount, into the CFP's company coffers, and to those manipulating the investments.
I shake his hand, thank him for his time and in a flash he's gone. I feel ill and internally lash out against myself for not striving harder to take control.
How else can I deal with a CFP? I don't believe him. I don't want what he is selling. At the end of the day, he knows I'll sign the paper anyway. And so do I.
1. Seriously, I'm sure it would make a fascinating study of how the box is actually chosen. Assigning logic to the choice would only make explaining the choice worse. Human actions can be controlled, but not predicted :-)
7.16.2010
In the end there is only socialism
Really, at the end of time, power will be so consolidated there will be only one world leader1. And the "greater" good of mankind will be the primary focus of that government. When those days come I don't think the free thinkers will find any happiness in saying "I told you say".
1. http://en.wikipedia.org/wiki/Antichrist
1. http://en.wikipedia.org/wiki/Antichrist
6.29.2010
6 months of living
Having now been pursing my chosen lifestyle for almost 6 months, I'd like to offer a bit of self reflection. What has this pursuit enabled me to do, and by consequence, not do?
Having freed my time, I still find myself quite busy with the pursuit of hobbies. I now cycle over 100 miles every week and ride my bicycle every day. Bicycling more has been a desire of mine for sometime and indeed was a huge motivator for moving to a warmer climate. In addition, I was able to "accidentally" experience the joys of going "car-free" for over a month. My car broke down, and I resolved to fix it, but had to wait for the part to arrive. The car is now fixed but the lesson remains. Unless I'm going on a long distance trip, the car sits. All my day to day activities, errands, shopping, etc are now done by bicycle. I'm much happier for it. Of course if my plans for doing some long-distance bicycle touring come to fruition I wouldn't need the car for the trip across North America.
In a similar vein, I have begun spending time with family, finally growing my own food via a garden, and pursing my goal of contributing to open source projects! The interesting thing to note is that none of these actually involve trading. It seems my lack of focus on trading has made me a better trader. I've had my first profitable months ever manual trading. I attribute this to most of all dumb luck (haha), but also to being patient and in some ways trading on less information thereby filtering out the noise. Shockingly these last few weeks have seen me really busy on non-trading things and I must confess to not knowing what the euro or other currencies are doing everyday. It's freeing to think I don't have to worry about how my trading is doing every moment of the day. I am no longer living or dying by my NAV. Further because I trade at a sane leverage (2:1 or 3:1) I literally am not making or losing fortunes on an interday move. This is a stark contrast to my first week as a trader. I had huge NAV gains (and losses!) on as little as 10 pips.
Having freed my time, I still find myself quite busy with the pursuit of hobbies. I now cycle over 100 miles every week and ride my bicycle every day. Bicycling more has been a desire of mine for sometime and indeed was a huge motivator for moving to a warmer climate. In addition, I was able to "accidentally" experience the joys of going "car-free" for over a month. My car broke down, and I resolved to fix it, but had to wait for the part to arrive. The car is now fixed but the lesson remains. Unless I'm going on a long distance trip, the car sits. All my day to day activities, errands, shopping, etc are now done by bicycle. I'm much happier for it. Of course if my plans for doing some long-distance bicycle touring come to fruition I wouldn't need the car for the trip across North America.
In a similar vein, I have begun spending time with family, finally growing my own food via a garden, and pursing my goal of contributing to open source projects! The interesting thing to note is that none of these actually involve trading. It seems my lack of focus on trading has made me a better trader. I've had my first profitable months ever manual trading. I attribute this to most of all dumb luck (haha), but also to being patient and in some ways trading on less information thereby filtering out the noise. Shockingly these last few weeks have seen me really busy on non-trading things and I must confess to not knowing what the euro or other currencies are doing everyday. It's freeing to think I don't have to worry about how my trading is doing every moment of the day. I am no longer living or dying by my NAV. Further because I trade at a sane leverage (2:1 or 3:1) I literally am not making or losing fortunes on an interday move. This is a stark contrast to my first week as a trader. I had huge NAV gains (and losses!) on as little as 10 pips.
6.14.2010
Move #2 Complete
On a personal note, my second move in 6 months is now completed. Same state, still beautiful and trader friendly. However, I am now closer to family who I've begun spending more time with. Paradise is meaningless if experienced alone.
4.01.2010
We're all self-employed
I was reminded today of that simple little fact. Yes we are all self-employed. Before someone balks at this notion, I would say the majority of people trade there time (finite resource) for money (infinite resource) directly. If they ever cease trading there time, the money also ceases. This can be a real problem when you can no longer trade your time, but still require money. I evaluated this thought of exchanging my time for money, and in a true traders perspective, found it a poor return on assets. This blog was founded on the idea that there had to be a better way of providing for my needs than a direct exchange of my time for money1.I think anyone who has ever resold the same piece of “time”, aka work, would agree. Artists, writers, musicians, etc all understand the idea of reselling the same time block. The idea here is to create something that you can utilize for income, without having to spend the same amount of time as the initial outlay. Sounds a lot like passive income, and to a large extent it is. These folks are multiplying there monetary returns on there time by reselling that same time block again and again. Sometimes this resale requires no more time input, resulting in a truly passive income stream. Generally however, I would guess a small amount of time is required to continue to see the return. All said, we should seek to do the same as traders.
Whether your on an automated or manual setup, it's likely your seeing a better than 1 to 1 return on your time spent versus money earned. Trading in general requires upfront commitment, but the returns on that time spent allow you achieve a similar enhanced monetary return in exchange for your time. Unfortunately, even in this digital world I don't have the "dream" job of reselling my work again and again, a la a musician or writer. At least not yet. Happy trading.
1. Read steps 1, 2, and 3; especially step 2.
Whether your on an automated or manual setup, it's likely your seeing a better than 1 to 1 return on your time spent versus money earned. Trading in general requires upfront commitment, but the returns on that time spent allow you achieve a similar enhanced monetary return in exchange for your time. Unfortunately, even in this digital world I don't have the "dream" job of reselling my work again and again, a la a musician or writer. At least not yet. Happy trading.
1. Read steps 1, 2, and 3; especially step 2.
3.20.2010
Voidness of space and time
This time spent inbetween my previous residence and my new office has to yield something right? Is there a grandiose strategy lurking inside my brain? I hope so. Meanwhile, I am stuck waiting on my stuff to arrive. I feel like a writer without paper. Since I am both a visual and straightforward thinker, I am almost lost without my workspace. I had assumed to be setup this weekend, but that reality has slipped away.
3.18.2010
In Transition
As I've been transitioning to a more climate friendly location, trading and in many ways life has come to a standstill. The prospects of gathering and packing everything you own is a healthy exercise. Its a time for simplification, and of purging. A good friend of mine once noted that if he was rich, he would seek to own nothing. The lesson learned is stark. If money is no object, given our services based economies, simply pay for everything. Why pack? Simply buy clothes there (or pay someone to). Why not rent different houses and move at whim? Without stuff, you are free. One can go too far here and quickly become a pure consumer, which runs contrary to our purpose in life. See Step 2.
All this to say it's been the better part of the month with no access to my code, systems, or trading in general. Losing your internet connection can be like dying. However, nothing is forever. And so, tomorrow my stuff should finally arrive. I should be back in business for next weeks session. Albeit, with no dedicated internet, running bots in live mode will have to remain postponed.
All this to say it's been the better part of the month with no access to my code, systems, or trading in general. Losing your internet connection can be like dying. However, nothing is forever. And so, tomorrow my stuff should finally arrive. I should be back in business for next weeks session. Albeit, with no dedicated internet, running bots in live mode will have to remain postponed.
2.08.2010
Step 1 - Quit your job
Quit your job. Really. Without warning, much thought or regard for consequences. I did. I'm becoming a capitalist. Be in control of your time, your money; your life. This will chronicle the journey of transitioning. From trading my finite time and my brainpower for money of dubious and relative value, to spending my time as I see fit.
I suppose some introduction is in order. I am a typical 20's male. Married, but unwilling to commit. Smart, energetic, talented; and burned in by corporate America. I've spent my life till now making the assumed societal choices. I pursued schooling with vigor, noting it had merit and value whereas sports did not. (Seeing some professional player salaries, perhaps I missed the mark on this one) I left high school for college early, a move spurred on by my desire to begin life. My summers were spent working for money. The jobs were chosen of course purely by how much it might pay. College was a disaster that did manage to only last 3.5 years. All said and done, society had birthed another upstanding citizen. No debt, young, fit, and eager to work. It had all the images of an American dream. I got lucky after all. I landed a job square in corporate America working in IT for a fledgling company. In exchange for 5 years of my life, they gave me money. It wasn't a fair trade. So I ended it. Which leads us to step 2.
I suppose some introduction is in order. I am a typical 20's male. Married, but unwilling to commit. Smart, energetic, talented; and burned in by corporate America. I've spent my life till now making the assumed societal choices. I pursued schooling with vigor, noting it had merit and value whereas sports did not. (Seeing some professional player salaries, perhaps I missed the mark on this one) I left high school for college early, a move spurred on by my desire to begin life. My summers were spent working for money. The jobs were chosen of course purely by how much it might pay. College was a disaster that did manage to only last 3.5 years. All said and done, society had birthed another upstanding citizen. No debt, young, fit, and eager to work. It had all the images of an American dream. I got lucky after all. I landed a job square in corporate America working in IT for a fledgling company. In exchange for 5 years of my life, they gave me money. It wasn't a fair trade. So I ended it. Which leads us to step 2.
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