Kibitzers' Corner

[nickola.pazderic]

From Wikipedia: A kibitzer is a non-participant who hangs around a game, offering (often unwanted) advice or commentary. This Yiddish term is used in Contract bridge, Chess, Go, and many other games.
Kibitz is also a term referring to circular commenting. One person comments, then the other person comments. A back-and-forth conversation outside the main issue, where the people having the conversation are not directly participating

I'm starting this thread for all who might have ideas, feelings (Trev!), confessions etc. that they'd like to share in relation to the robots. If you have specific questions, post them on Billy's thread. Specific suggestions about programming, back-testing, etc., should be posted in Pascal's daily comments. In this thread we can send semi-random signals about the robot and ourselves. Leaders are most welcome-- but please don't feel obliged to respond. Also, I can't be around to monitor the thread all day (I feel responsible for it). So-- while all nearly random robot signals are welcome, please avoid politics and religion.

I'll start: I bought shares of TVIX at 19.28. This is not condoned by the robot. (insert smiley face). But the upside looks huge; that is, it is a "jumping out of the first floor window trade."

[manucastle]

From Wikipedia: A kibitzer is a non-participant who hangs around a game, offering (often unwanted) advice or commentary. This Yiddish term is used in Contract bridge, Chess, Go, and many other games.
Kibitz is also a term referring to circular commenting. One person comments, then the other person comments. A back-and-forth conversation outside the main issue, where the people having the conversation are not directly participating

I'm starting this thread for all who might have ideas, feelings (Trev!), confessions etc. that they'd like to share in relation to the robots. If you have specific questions, post them on Billy's thread. Specific suggestions about programming, back-testing, etc., should be posted in Pascal's daily comments. In this thread we can send semi-random signals about the robot and ourselves. Leaders are most welcome-- but please don't feel obliged to respond. Also, I can't be around to monitor the thread all day (I feel responsible for it). So-- while all nearly random robot signals are welcome, please avoid politics and religion.

I'll start: I bought shares of TVIX at 19.28. This is not condoned by the robot. (insert smiley face). But the upside looks huge; that is, it is a "jumping out of the first floor window trade."

Hi Nickola,

I am finding it rather difficult to reply to your post. I have mixed feelings with an excellent Robot yearly portfolio performance but an extremely poor last 3 months performance and watching GDX take off without me ! :O(

(Feelings are a luxury we cannot allow in the market of course.)

I will focus on my yearly results and be happy :O)

Trev

[nickola.pazderic]

Trev--

You have my company.

If things keep up like this, I might be outta money. This is one Livermore experience (of many actually) that I don't want to have. In fact, I won't come close to it. I'll sack myself before my spouse does.

I'm no engineer, just a dumb social scientist and musician. I don't hear music in the spheres of the market. I sense instead a global free-for-all pyramid scheme of sorts. I am involved from a stand point of sheer brutal practicality. Practically speaking, I've been brutally shaken.

I'm glum.

[Billy]

Trev--

You have my company.

If things keep up like this, I might be outta money. This is one Livermore experience (of many actually) that I don't want to have. In fact, I won't come close to it. I'll sack myself before my spouse does.

I'm no engineer, just a dumb social scientist and musician. I don't hear music in the spheres of the market. I sense instead a global free-for-all pyramid scheme of sorts. I am involved from a stand point of sheer brutal practicality. Practically speaking, I've been brutally shaken.

I'm glum.

http://www.youtube.com/watch?v=HKBRjZdy8WY

Billy

[nickola.pazderic]

And in these simple tones, I hear you, Billy, too. (http://www.youtube.com/watch?v=uI3m82MZf-Y&feature=related)

[mingpan.lam]

Hi Trev and Nickola,

I started to follow both robots from 1Jul2011 and tried 100% mechanical but occasionally, I reduced the position by following Billy and Pascal's advice. And here's the PL% of my trade results,

IWM : -0.35%(last year)-2.18%(this year up to now) = -2.53%
GDX : -1.17%(last year)+(0%) (this year up to now)

Trev : I shared the same feeling as you, GDX take off without me.

I hope the future will be better with the recent improvement.

Cheers,
Ellis

[Pascal]

Hi Trev and Nickola,

I started to follow both robots from 1Jul2011 and tried 100% mechanical but occasionally, I reduced the position by following Billy and Pascal's advice. And here's the PL% of my trade results,

IWM : -0.35%(last year)-2.18%(this year up to now) = -2.53%
GDX : -1.17%(last year)+(0%) (this year up to now)

Trev : I shared the same feeling as you, GDX take off without me.

I hope the future will be better with the recent improvement.

Cheers,
Ellis

The main question is why not taking a position in GDX or closing it earlier?
I entered into a second GDX position at arund 54 and closed it at about that price, but kept the initial GDX position as per the robot's instructions.

For me, keeping a long GDX and a short IWM is sound, because it hedges against any sudden market melt down or melt up.



Pascal

[mingpan.lam]

Hi Pascal,

During December, we have a couple of lose trades and one of the reason is probably due to the low volume during holiday. I just don't have the confidence. And just after the holiday, I decided not to follow the first GDX signal and I know it was a wrong decision.

Trev : what's the reason for you not following GDX?

Cheers,

Ellis

[Neil Stoloff]

:O( (Feelings are a luxury we cannot allow in the market of course.)

Trev


Maybe allowing the feelings -- even reveling in the positive ones and wallowing in the negative -- will help us not to act on them (or fail to act because of them).

Neil

[manucastle]

Hi Pascal,

During December, we have a couple of lose trades and one of the reason is probably due to the low volume during holiday. I just don't have the confidence. And just after the holiday, I decided not to follow the first GDX signal and I know it was a wrong decision.

Trev : what's the reason for you not following GDX?

Cheers,

Ellis

Hi Ellis,

I sold GDX due to Pascal's comments indicating a sell because the RT MF crossed below the signal line on Jan 19th and I did not get a chance again to buy because the signals have been Neutral since then.

Trev

Trev

[nickola.pazderic]

It took me years to learn to write. I'm not alone. Everyone takes years. Everything must be learned: penmanship, spelling, grammar, structure, arguments, notations, and eventually style.

I know, too, it takes years because I've taught many writing classes. (I know. No one could guess it from the error-prone prose I sometimes let loose on this forum). In classes, I have presented all I know, including my tricks. Students seemed to understand during classes; they solved the problems I gave them; they worked in groups; they made presentations about some aspects of writing and so forth. However, when I received their formal essays, I would find mistake after mistake that I had specifically taught them not to make. This was always expected but still very disappointing.

Eventually, I would teach my students to write from simple structures first. Subject, verb, object. Subject verb object.... Such an emphasis on the ABCs of writing rarely went over well with students. People generally don't like enforced humility. Ultimately, anyone who truly develops the capacity to gather and develop an idea within the conventions and structures of a language has learned to execute with the precision of an advanced computer program. No one learns entirely alone, but everyone who succeeds learns to learn how to write.

I think something similar happens with trading. All the experienced traders in this group have learned to trade. Some do so with flare; others are methodical. We lesser traders should be in awe of their fluid and focused talents. But, based on my experience, I guarantee that many of us would not achieve the same results as the masters here even if we were told exactly how to trade. I know this as a teacher of writing, but I also know this as a trader here. I have yet to replicate precisely a robot trade without leverage from start to finish! And yet, the back tests and the experienced traders all say the same: over time the robots will work. They also say that the market is itself a relentless and unforgiving teacher; it provides perfect and very timely feedback. But when one does it right, the rewards are heavenly.

So, dear friends, we need to straighten up and fly right. If we can't achieve good results with the robot guiding our every choice, we should either resolve to follow more precisely or choose another writing instructor. The flare and the grace of experienced hands will come only to the dedicated and only to those are willing to take the time necessary to discipline themselves to the dictates of the market. How long will it take? Answer: as long as it takes!

[senco]

The main question is why not taking a position in GDX or closing it earlier?
I entered into a second GDX position at arund 54 and closed it at about that price, but kept the initial GDX position as per the robot's instructions.

For me, keeping a long GDX and a short IWM is sound, because it hedges against any sudden market melt down or melt up.

I made a discretionary exit at the bottom (looking at the RT MF drop), and GDX took off without me. Re-entry made sense upon reversal, but I waited for the robot to show statistical edge for re-entry - which it did not. A hedge still seems sound, but after today's jump it feels 'too late'... Mixing a mechanical system with discretionary decisions rarely worked for me; regardless of the outcome of the initial deviation from the system, it is difficult to figure out what is the right follow-up discretionary decision in order to 'get back in sync'.

[asomani]

I made a discretionary exit at the bottom (looking at the RT MF drop), and GDX took off without me. Re-entry made sense upon reversal, but I waited for the robot to show statistical edge for re-entry - which it did not. A hedge still seems sound, but after today's jump it feels 'too late'... Mixing a mechanical system with discretionary decisions rarely worked for me; regardless of the outcome of the initial deviation from the system, it is difficult to figure out what is the right follow-up discretionary decision in order to 'get back in sync'.

Same thing happened to me, and I agree with your thoughts. I like to keep discretionary trades discretionary and mechanical trades mechanical. It is difficult to get the full benefit of a mechanical system that you have tested without following it mechanically post-discovery, after all.

Here's an interesting read that is relevant to some of the feelings shared here:
http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=134195.xml&part=1

[Billy]

I found the attached pdf as conveying important fundamental truths about trading the robots.
I'm sure it will address many concerns discussed in this thread for a discretionary use of the robots signals.
You need to get the execution of trades correctly day in and day out,
because there’s just one or two missed opportunities which get away that could have made your
month or there can be mistakes that can take away weeks and weeks of profitable work. This is
where the use of good automated trading software can control some of these variables.
Billy

12504

[nickola.pazderic]

I appreciate all the insights and help.

Upshot. Simple is difficult; and difficult is simple. To feel in-sync with the market is the greatest feeling; the difficulty of making money suddenly becomes simple. All can turn in a flash via the poor execution of a robot trade. The simple, being on the side of the market with the robot, becomes exceedingly difficult. The smallest inaccuracies produce compounding failures.

I'm back to square one. Lucky for me, it is only January. I will now add patience to a list of virtues I can practice.

I can't recall feeling so confused as I have while learning this craft.

[Neil Stoloff]

I can't recall feeling so confused as I have while learning this craft.

Nickola,

Embrace randomness and your confusion will melt away, replaced by a sense of awe and wonder at the limitless possibilities.

Or not.

Best,

Neil

[nickola.pazderic]

Neil,


To "embrace randomness" is an interesting idea. But isn't an embrace of it a little like grasping an avocado seed? The tighter one grips, the more likely it is to slip away?

Then what remains? Randomness without embrace?

Without embrace what becomes of us?

[Rembert]

Perhaps the whole universe including us is random so I wouldn't worry about that :)

In all seriousness, it's actually very easy to follow the robots in a relax way. Since the robots have an initial stop loss one can objectivly position size every trade to the same account % risk. Choose an account % risk you are psychologically comfortable with and that's it. Don't be greedy ... start with a small account % risk and increase it as success follows.

http://www.iitm.com/sm-position-sizing.htm

[ernsttanaka]

Nick,

I saw your original post on this thread -- One sentence I read a couple of year ago came to mind.

"You never can be a free man if you don't trade your own systems" -- the article went further that if you needed others for trading signals you run the risk of one day finding yourself without a business; just because an 'outsider' decided to go another route.

Daily I appreciate Billy's and Pascal's post - their discipline is a guiding example (I fall short on the discipline to the repetitive aspects of our chosen profession). Mike and Paul are also examples (to me) on how to stay the course with a set stock picking method.

My start in this profession has been an uphill fight. It took me several YEARS to find a niche which worked and fitted my personality. For instance IBDs works - I am convinced years ago - It doesn't work for me because after analyzing hundredth charts I see a cup and handle in everyone of them. Trend follow works, but again not for me - I close the working trades to early so I never have a great runner and a great winner. Example I made "great" money with CMG and NFLX between 50 and 55 (lol); completely missing out on the rest of the run.

It is only after I found my niche and found the discipline to concentrate my trading towards that discipline that I started to make some head way.

I feel your frustration and can only say "stay the course" and try to claim your corner in this market. Tell me if I can help.

Ernst

[nickola.pazderic]

I wrote a summary of the year, 2011, and a plan based on my experience. I planned to make it a boring year and follow the robot simply in 2012.

First month result: epoch fail! This has caused me to question my decision and ability to follow the robot.

I recall that I did pretty well with CAN SLIM in early 2011. In fact, I set very high standards for myself through June 2011. The robot, however, put the question to me: How exact are your entries and exits? And how precise can you be?

These are important questions because I found a method that actually worked. In fact, I was rated in the top 10 several times on online paper trade games. The method was simple, I would pull the top stocks from each sector listed in the IBD online main page. At the time, I wasn't a subscriber; so I waited for new lists (tech stocks, new America, etc) everyday. I would take the top stocks and buy 25,000 worth. If the stock didn't work within the first day, I sold it and bought another. I called this the "throw mud at the wall method."

The big problem was "when does one sell?" Several times, I enjoyed real substantial equity increases only to see them pulled out from under me. Of course, I didn't understand this "profit taking" very much at all. I only did extremely well with SLV and AGQ because Gil Morales sent an email to us, informing us of his "dream" that it was time to sell silver. I don't have dreams of selling. I wish I did.

Oh robot! Equity accrued to my account in May and June, as I was short the market with TZA and puts, staying in the position after Dr. Kacher switched his model to neutral. It was the robot that put this all into question because it commanded me to buy when it seemed like the selling was going great. The robot trade did work spectacularly but not for me! I couldn't stay in the trade as we bounced along in accumulation mode, readying for a reversal to the upside.

In any case, my point is that the robot answered my biggest questions about buying and selling but it put all my acquired habits into doubt and suspicion.

I have many more questions in light of my experience, going so deep as to question the fundamental nature of my being: Am I willing to make money in this business or would I rather scuffle my way forward? I also ask myself: was it worth it to submerge myself in the ins and outs of the market, the economy, and social trends so I can find a slight edge? Can I be a better daddy if I let the robot inform my decisions?

My decision has been to take it easy one year and truly follow the robot. What can I learn from it? How will it improve my results? These are my new objectives.

I appreciate your offer of help Ernst. I'll contact you.

[nickola.pazderic]

without wit or sarcasam, writes:

Thank goodness we did not trend the entire session!