I'm presuming that Sam won't be day trading futures

Also, anything from 3 months to 12 months works on any asset class. Some asset classes better than others, but over long enough periods it looks like it works.

For some reason, something about your second paragraph had me wondering what the moving average of RIOT might look like - wow, talk about lag on longer timelines! It looks like the 200 day moving average totally didn't pick up on the big price surge in December - and it looks like the moving average is still moving upwards, even though the price has been dropping for 3 months already?

Guess that's very different from the one for Facebook, whose graph is so straight it looks like it could have been drawn with a ruler?

A couple of the stocks that have been doing really well this year were interesting to see - here's the ones for Netflix, along with the analyst estimate/valuation from Yahoo ...

Wonder if maybe most of the time fundamental and technical analysis may wind up picking up a lot of the same stuff, like with how they both seem to show that Netflix may be a bit overvalued right now? But wonder if maybe every once in a while one may pick up on something the other doesn't? So maybe nice to have both?

It feels nice to have both Although still have so much more to learn and practice - have been finding it very interesting, but just as hard as poker. Am trying to read and practice lots! Although am also a bit lazy


Anyways, thanks so much for the tips mrbaseball - especially enjoyed the catchy tips about buying the rips and selling the dips, and the trend being my friend ... for some reason those basic things can be surprisingly easy to forget when caught up in the middle of things sometimes! Thanks, they're great!!

Sam, using SMA sucks for picking individual stocks. You have to pick a large basket of them or use index-based etfs.

I don't think that RIOT, FB or NFLX ever showed up on a value screen

If on their own they don't tell you much, then their alpha must be very low. Which means spending too much time thinking about them or putting too much weight on them is dumb. Better to focus on things that give you many many times the alpha, no? Or you risk getting confused and filling your head up with non-alpha crap, like our friend.

Hey Brian, we must have posted at the same time, and after posting my post, just wound up going to bed, and didn't notice your posts - so sorry for not responding yesterday!!

Especially since your post was super helpful, as always That's a very strong case you make for sticking to the bright-line rule as a way to weed out the risk of human error element, which will likely tend to be high when the market's really volatile and scary. And that will be doubly so for me with my inexperience Your idea feels very right/best - will not worry about those false positives, and just look out for a break of the longer timeline moving averages

Guess should use the candle charts, instead of that fishy line graph have been using, to make sure am catching the daily low?



Yes! Am just buying and holding two plain vanilla stocks (not any of the 3 listed above) But guess these are awkward times we're in, and my buy and holds have gone parabolic So wasn't sure if maybe it was time to do something with Amazon? Was maybe going to sell before interest rates possibly get raised next week, before anything even has a chance to fall below the moving averages, but was still pondering stuff?

Thanks again Brian

Hopefully you mean Brian? lol

Those are really good points TS - something am super quick to cross off my list of reading materials is anything that makes my eyes go cross-eyed, like that primer on how to day-trade volatility stocks that Brian posted lol Honestly, barely even made it through the first page, before deciding the best thing to do would be to just throw in the towel and stick with stuff that didn't make my head dizzy


Someone posted a quote today that caught my eye:

Found it kind of interesting to ponder, in terms of how that piece of advice is meant to be executed?

Like did he mean to say ...

• it's better in life to remain ignorant, than to try and learn at the risk of misapplying that knowledge?
• ignore relevant info - because what if you misapply it?
• ignorance is bliss?

Since Stephen Hawking was a University professor with a PhD, it feels like he might have been saying to be careful to stick with things that you can understand - and then after that go to town with things. But do be sure to be thorough and meticulous with the details, so when you learn new things you do reliability testing, cross-check info across the entire existing body of knowledge, anticipate outcomes and be prepared for the various scenarios, and make sure to backtest all new ideas ... and then the results should start to follow?

Knowledge is like crack for theorists and a scholars - he would never believe that keeping things simple is superior to reading every book in the library. And that's the philosophy was raised with as well - once all the info outside of one's ability's been weeded out, it seems like the processing of data may tend to be more monotonous and tedious than confusing?


It feels worth it to learn as much as one is able to understand - because even if some TA indicators may oftentimes be low alpha, guess there's always that chance they may wind up making a difference at some point, like with Brian's trend following method?


That being said, i don't have as much experience as you do TS If am able to find a method that works, will definitely likely feel that simpler is better Guess learning takes time ...


PS. Huge battle in bitcoin between buyers and sellers right now! It looks like the sellers may be winning out?

He did. The main factors (momentum, value, quality and size) don't add huge alpha. Maybe a percent or two per year over long periods. Of course, beating the market by a percent or two per year over 20 or more years means a lot.

This is smart.

This is not smart. You are 99%+ likely to learn just enough to be dangerous.*

The momentum strategy works (in real life, ignoring the blog post I shared) primarily because it keeps you from seriously messing up. It gives you an easy to follow plan that is, ummmm, fairly easy to follow. I'm going to make a wild guess that you didn't have all your potential investment money invested in 2017 and 2016 and 2015 and 2014 and 2013 and 2012 and 2011 and 2010 and 2009* - It seriously doesn't matter if you pick all the right stocks if you have a huge percentage of your potentially investable money sitting in cash.

*I'm making these assumptions because I'm assuming that you are like 99% of people who have money to invest.

The hardest thing have found with investing *by far* so far is the willingness to look at my bankroll and learn from my mistakes. I took comfort from the fact that every single person who's been in investing has mentioned also having difficulty with that aspect while learning as well.

It sounds like it's not possible to get better with investing, except by learning the hard way. So that would mean there is no strategy that can insulate one from the having to sit with that feeling of having an investment not go the way one hoped. And the mistakes are usually compounded when learning, because there's oftentimes bankroll mistakes as well.

Really like your momentum strategy a lot - but not sure it's realistic to expect someone to be comfortable sticking with a bright line without truly being comfortable relying on indicators. And that can only come with practice, safe in the knowledge that they actually work.


Are you sure you truly believe I should be in the market at all?

You have to compare yourself to a benchmark. If you can't beat SPY or VT (including dividends) including all the cash you have on the sidelines waiting for a good opportunity, then you should just be owning SPY or VT.

You can read and learn lots. Bankroll mistakes are completely unnecessary since there is absolutely no reason for you to be using leverage.

You won't know how losing feels and makes you flail around like a freak without having experienced losses, but those will inevitably happen. Read up on how you are supposed to act when you take losses and then just do what you are told to do.

You can look at history to see how well they have worked. It'd suck if we had to experience everything ourselves and finally learned enough to start investing for retirement around the age of 80.

I don't know any good alternatives to sticking to bright lines. I guess you could try using your spidey-sense or something.

Alternatively, you could use several approaches. Like allocating 25% to a momentum strategy, 25% to a value strategy, 25% to a quality strategy, 24% to a long-no-matter-what-total-market strategy (all of the above using ETFs) and use the remaining 1%* to pick stocks.

Only if you want to retire someday. Perhaps it would be best if you would just invest your money into one of those fancy target-date retirement funds every pay period. By "perhaps" I mean "almost definitely." If the market tanks, that would be great news since you can buy more for less! Sale prices are good, right?

Oh, and not with money you need in the next 5 years. Don't **** around investing with that money.

*2% if you feel super confident about your crystal ball on which stocks will rise next.

Something have noticed with advice is that it tends to be the most helpful when it has the best fit, because the advice-giver believes in the person, and so they've taken the time to assess the other person's interests and abilities, and are therefore able to suggest tips that bring out the best in people, while also helping them meet their goals.

In your last post, you called me dumb and said I should quit and just click buttons.

Today you bring up investing in ETFs for no reason, and reiterated that your advice to me would be to click buttons, but do no more than that.


It seems like people oftentimes tend to treat others the way they treat themselves - do you speak to yourself in that way?

That's kind of a tough way to live.



Was going to take a break from 2+2, now that it's spring time. Here's the login and password info for the google sheets spreadsheet, in case any of the formulas start to go funny ...

email: 2P2TradingContest2018@gmail.com
password: TwoPlusTwo2P2

Strange times in the markets - hopefully things start to pick up again once they start reporting earnings for Q1? GL to us all

The smartest people aren't immune from having stupid ideas. They have more stupid ideas than non-smart people since they have more ideas.

Also, to your rather pointed question: yes. Well, kind of. I do "talk" to myself that way except for that I don't actually talk to myself. That would be creepy and disturb the people around me. I do assume that most of my ideas are probably stupid and I'm not even smart enough to have too many ideas. It turns out is a quite easy life to live that way. It keeps me out of harm's way and is at least easier than any other way of living that I can think of, but perhaps I lack imagination.

I'm not observant enough to aim advice directly at your abilities. If I were observant enough, I'm definitely not smart enough to figure out what personal advice would be helpful to you specifically.

Enjoy your vacation from 2+2 and make loads of the moneys.

I enjoy your positivity and your energetic enthusiastic intellectual interest in things. It's wonderful and a breath of fresh air.

I'm not sure it's correlated with getting the right answer. One of the reasons that men do better at almost all high end pursuits is because we're less agreeable, including towards ourselves and happy or established ideas.

The happy narratives around our agency as people and what we can do "if we just put our mind to it" apply to a lot of things, but not to trading and some other pursuits. The cold truth is that 99% of people are going to be in the "moron" class when it comes to being successful at trading, and that nothing they can do is going to change that. Most humans are too stupid, too full of cognitive flaws, confirmation bias, seeing false patterns, attached to emotion and habit, to be good at trading or investing in a way where they beat an index, let alone have it be worth the time they put into it. Brian doesn't think that you're stupid so much that individuals are broken buggy software packages completely inadequate to taking on the task of generating alpha at trading and investing. This view is correct.

That won't sit right with you - it's contrary to your entire worldview and the lovely and healthy and positive way you want to approach life and challenges - which is why I recommend that people with your lovely worldview stay away from unforgiving gambling games as a serious pursuit (the same I'd recommend staying away from say, an alcoholic). The world is kind of how you view it and the way you approach it is definitely a recipe for success, but only in places - zero sum gambling games are a different beast that require ruthless and unhappy realizations.

That's a very common point of view TS - people only know what they know in life, and unfortunately females who enjoy and excel at nerd pursuits are so rare, am usually the only one people have ever met. So people oftentimes don't 'see' me when they see me, and will talk to some imaginary person that's perhaps from their past or what have you.

It's pretty interesting to watch when someone's past overshadows what's right in front of them though. Like in a thread for a trading contest where there's a track record for all three of us ... am actually beating the market 4x over (and that's being stuck picking 10 stocks, when my real-life portfolio actually only has 3). Also beat the market 2x over last year, and 2x over the year before that as well.

Am also already trading profitably - have been trading crypto, and was breakeven at first but practiced like crazy and the money's just been insane lately. My investing/trading is limited to big movements on longer timelines though, where there's lots of cushion that's much more forgiving - and crypto like the stock market has been converging in the big picture for a couple of months now. So will just have to wait for both to develop a stronger direction, and will leave the day trading two both of you. Really didn't want to mention the trading, because someone will read a sentence about me being profitable, and start insisting am unprofitable. That's just not factually accurate, so while it's kind of understandable, it's also frustrating when that happens because there's really nothing one can say to someone in that sort of situation.

Thanks for the positivity TS - appreciated that

Trusty,
People enjoy and gravitate toward what they're good at. It's no more "unfortunate" that women are on average provably far worse at spatial reasoning (linked with math, numbers, the logic of moving systems) than it is that men are provaby far worse at nurturing. It just is what it is.

I don't think that women are worse traders and investors, on average. I think if you took 100 women with an interest in the market and 100 men, the women would beat the men handily, because they'd lose less. That's because you have a negative edge after fees, and women are both going to trade less and are less likely to go balls-out crazy or take too much risk. But 98 out of the 100 would still underperform the index.

The elite traders are male because men are less prone to accepting existing rules, and the way of alpha is not found in rules or books. It's found in being highly original and disagreeable, not in harmony or by respecting other people's views. They are also more likely to spend large amounts of time being laser focused on one task, almost an autistic trait, and the key to breaking out of the pack in competitive systems.

I have no doubt you would crush Brian at trading and investing.

As for results on the challenge, yes, Brian took a nice pounding getting short vol for the year. Congratulations on your success.

Yes, am low-t - thankfully! So that could be true about the risk-taking - don't really have much, like ... ambition? And competing doesn't appeal to me at all. JuWould root for Brian to beat me in a contest, and would be happy for him when he did - he's smarter and more experienced than me, so that's all great stuff in life. Am happiest when people are being the best people they can be

Am not sure what to expect from your contest between the two of you though! You're both so good - it seems like both of you should crush any contest you enter ... except when you're against each other, now that's not going to be possible It seems like it should be super close though, so for sure that's going to be a fun one to watch!!


Thanks TS

Tooth, you spelled "men tend to be overconfident, overly emotional fools who overtrade and therefore are worse traders than women" incorrectly.

Losing less ain't winning. On average women will almost certainly lose a lot less than the average man, but that's like being a normal person and winning the ****** spelling bee.

I'd love to see your evidence that men are better traders.

I've only got evidence on investors and investment managers. Nothing on traders either way.

Taoists are perfect investors. When they invest, which isn't often.

if im understanding tooth correctly, its backed by social science. men take more risk. if most traders are losers, men will lose bigger. when you look at extremely high performers men make up the majority of outliers. you could look at two obvious measurements like IQ and violence. women have a flatter bell curve in IQ than men and mean make up the majority of outliers (good and bad). Average IQ between men and women is the same. Similar with violence, men vs women in violent behavior is about 60/40. when you go out to the extremes its almost all men, which you can see in the criminal stats

you embarrassed yourself pretty badly in the james damore thread but hopefully you can understand this

also, have we agreed on how much margin we are extending brian yet?

I have infinite margin. No chance that I make my goal of being 100% down in this contest if I can't have at least some that are >100% down.

Also, your info on IQ difference between sexes is wrong. The studies that have found differences in the right tail of the distributions were deeply flawed.

Men are more likely to be big winners in roulette than women, according to science, so there is that.

Back in the day the biggest most feared and respected trader in the Eurodollar pit at the CME was a woman. Easily one of the best pit traders I have ever seen. Back in those days very few women in the pits as they were a real boys club. Of course now there are no women or men

Finally some usable advice. Time to hit the tables.

AMD now red on the year.

Absolutely no one has a chance to catch me