Gold

N Rothschild said:
tons of fundamentals, none that your average t2w reader would believe though
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Rothschild,

I think I see where you're thinking is coming from (deflation, money supply shrinkage, I think), but I don't see that we are at the long term top of the gold bull yet. At or near an intermediate top maybe....someones pointed out elsewhere a bearish divergence on the gold chart.

Much as gold is at a high I still see that we are in an accumulation stage for the long term.
The ads on TV & elsewhere offering to buy gold are a part of this (BTW this is how Goldfinger made his money in the 007 book).

Also I remember the late 70s/80s gold peak, it seemed everyone was into Krugerrands (not me I was a bit young) it was all the talk, as thing went in those pre internet days it was a real all round boom - there were gold dealers setting up shop with their scales on street corners in London.
The peak was of course short lived.
None of this has happened yet, there are no great queues of Joe Publics at the London bullion dealers offices, though they are of course doing steady business. Nor has there been a crazy run on gold shares, some are at dizzy heights- see the Randgold chart, but theres plenty of scope to think any near top is an intermediate top.
The Feds are scared of gold panics and don't want a gold rush.
But they';ll more than likely get it one day. Deep Pull backs are buying opps. IMHO
 
Dunecat said:
lol that was a great everyday example of the financial markets :cheesy:

www.investopedia.com/ask/answers/06/turtles.asp

"Over time it became clear that Dennis won the bet as these traders generated average annual returns of up to 80%."
I can has 80% annual returns?
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These annual returns aren't a nice straight line.. the drawdowns were horrific. Curtis Faith mentions in his book how his entire year's profits were wiped out in one day in 1987 (the crash).

As a rule of thumb, a mechanical system should have a CAGR/MDD of around 1.. i.e. if you are targeting 20 pct annual returns, you'd expect a max drawdown of 20 pct.

Of course, you can simply dial up the bet size, and if you target (e.g.) 80 pct return you might see an 80 pct drawdown. There's the problem..
 
wow u r guillable as ****, and MR is quite right. If this system worked so well why did Dennis give up trading due to massive losses?? answer: nothing works all the time!!! seriously, it is confusingly simple. sometimes stuff works, sometimes stuff don't. it doesn't matter whats true and what isn't, all that makes money is stuff that is in demand (or supply if your short). the point of divergence is people who are happy to leave at that, that is fine and makes money but i now prefer using slightly more. unless your ****ing good, TA is a bit of cop out. but remember there is no one answer, the market is just a mirror, as hugh hendry says "mirror, mirror on the wall who is the prettiest of them all"...thats it.

and btw the stuff about risk reward is right too, although people say stuff like CAPM/efficient frontier is bull**** its ignoring the pretty significant contribution it made in this area.

just some other pointless points to dispute, hedge funds get a lot of stick but the people running them are ****ing smart, even the ones who fail. the ones who fail are even smarter cos they got someone to give them a ****load of cash without having any skills, whos stupider the rich HF manager or the person who gives them money? altho that is a more something of the industry than do to with the managers themeselves. i would also add that some HFs do benchmark which is obviously a total cop out.
 
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cr6196 said:
just some other pointless points to dispute, hedge funds get a lot of stick but the people running them are ****ing smart, even the ones who fail. the ones who fail are even smarter cos they got someone to give them a ****load of cash without having any skills, whos stupider the rich HF manager or the person who gives them money? altho that is a more something of the industry than do to with the managers themeselves. i would also add that some HFs do benchmark which is obviously a total cop out.
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Yes, they are indeed smart for those reasons you say, which are unconnected with generating profit. Another case in point, John Meriwether, who recently wound up his second hedge fund. I have no doubt he is an extremely wealthy man, but he never made any money for his investors (the opposite in fact!).
 
Trading is largely a cognitive skill. You don't learn cognitive skills by reading books. It's tantamount to learning to drive by reading the Highway Code. That's why static systems eventually stop working. It's like saying I can only drive in a straight line.
 
Ugh, I'm not a big fan of analogies. You could also say "a sailor never reached his destination by being blown off course" to imply that you SHOULD always follow the same line .. !!

Maybe Richard Dennis lost some money towards the end but he has considerably more money than any of us..
 
I think you're taking the analogy too literally. It's merely there to illustrate that it is a cognitive skill that develops to be able to adapt to changing circumstance. It can only be learned through practise and exposure. Nowhere am I saying you should always follow the same route.

At least I avoided animal analogies.
 
meanreversion said:
Maybe Richard Dennis lost some money towards the end but he has considerably more money than any of us..
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A remarkable man, without doubt, although I think people sometimes draw lessons from his story which are not necessarily applicable (for example, because they are not as smart or as lucky as he was :) and/or because they forget about, or do not know about the losses).


Do we know anything about him after 1997?

http://en.wikipedia.org/wiki/Richard_Dennis
http://www.streetstories.com/rd_finan_trader.html
http://www.businessweek.com/1997/14/b3521101.htm


OK, found something for 2000:

http://articles.latimes.com/2000/oct/04/business/fi-31019

Not looking so good.

Dennis Trading Group Pulls the Plug on Fund
October 04, 2000|Bloomberg News

How tough is it trading commodities these days? Tough enough to knock a master out of the business.

Richard Dennis, a futures trader who used a method of technical analysis to attract as much as $350 million to his commodity fund, is closing the fund after losing money most of this year.
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i havent looked at the links but i believe he went into politics for some time and he may have run for congress...i can't remember if it was dennis but a "millionaire trader" did run against Obama fairly recently, (can't remember when senate elections are but may have been '02 or '98, or may have been the house) in Chicago...but as i say i am not sure if that was Dennis, he definetly went into politics for a bit. there is this interview:

http://www.working-money.com/Docume...005/04/Abstracts_new/Interview/interview.html

can't be bothered finding the full thing though

i find it pretty ironic that he packed up his new fund when he did because i believe trend following started working again between '02 and '05.
 
Rothschild, i am somewhat offended for what you have said about TA, but kind of agree too. Technical analysis is just price mmkay, anything to do with all that shizzle, as im sure you all know. I think it is not HOW people trade , as in FA/TA , but WHY.

TA gets a real bashing because most of those who use it, fail miserably. These are the people watching free igindex webinars on 5 minute hammers, these are the people who deliberately choose the 'easy' way out as they see it, that is- metatrader, $500, buy at support when a hammer appears on 5 min GBPUSD. Rather than actually finding out what they are good at, and really focusing on that, or what makes $$$

You may find that you are crap at TA, and not bad at FA, the difference between winners and losers is that in this situation , they cba to learn the funnymentals so just stick with what is easy.
I just listen to the news anyway so that i don't feel like a tit.
 
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lol no just what a lot of people say when they cba to learn them and make them a joke, as if they don't have any effect on their trading...
 
in TA you could find a million reasons to be long and a million reasons to be short at the same time.
 
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