Blog Why Not?!

Cover: First Attempt
First attempt at a cover
Writing, 120420

So, I have been sick for days now. Just laying in the sofa, sleeping, eating and sleeping again. Today I felt the energy returning and the flue going away. Finally! However re-cooperating was probably just the right thing to do, because now I feel invigorated and want to do stuff again.

Since I can see my book project coming to an end, I have started out on producing a cover. I thought it would be fun to post the progress, so here it goes. This is the first attempt.

I did several sketches using pen and paper and trashed them all until I came up with this one.

Lets take an old painting that I never finished and just reuse the canvas.

All the major lines copied and pasted.

Hmm, maybe the tower is coming out a little thick. I do not know. I can always change that later on. Work in progress :)

- Aramis

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Spiral Hallucination
App uploaded to Play Store
Programming, 120314

So, I just uploaded a cool app to the Play Store. Check it out here!.

Actually it is kind of a by-product from when I was learning OpenGL. Anyways, check it out. There is a free version as well!

- Aramis

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Chapter 20
Re-writing
Writing, 120310

So, I just finished Chapter 20 and I re-wrote it completely. When I first started writing the book, a friend of mine told me that authors re-write all sentences at least four or five times. I also remember that I thought that I would never be able to have that kind of discipline. Never the less, here I am cutting away big chunks of text and re-writing part of the story totally. I re-write each sentence at least six or more times (at least that is how it feels like) and well, my-god had I ever known the amount required to write a book, I am not sure I started.

Then again, had I known how truly fun and exciting it is, I would probably have decided to have a go at it anyway. :-)

- Aramis

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Economics Seminar
Talky talky
Economics, 120302

So, last week I was the speaker at a seminar arranged by some friends of some friends. I talked a little about high frequency trading, financial repression and so forth. Unfortunately I did not have time to talk about how to do trading and stuff like that. The group I talked to was highly engaged and I well, I got really good response I think.

I realized one thing though. What have become like really apparent to me and well integrated knowledge, is totally utter news to many.

- Aramis

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Market Comment 120213
Just some thoughts
Economics, 120213

So, accordingly to some leading indicators that I follow, the financial stress is subsiding, there is ample liquidity in ECB and eurozone balance sheet bank credit is expanding. Leading business cycle indicators have turned up. Still inflation have not risen that much as of late and also the price of oil is relatively speaking not up that much. In US consumer credit have expanded. The Greek debt drama continuous and so is the currency war. The LTRO enables money printing and Bank of Japan think of quantitative easing.

I (still) believe that we will have stagflation and financial repression and right now I guess we have been seeing the reflation part. Much can happen, there is Iran, there is China and personally I would trade the market technically. Right now market sentiment have been really bullish for some time and the S&P 500 is both at resistance levels and overbought.

Watch out for the leading indicators starting to turn and/or oil shooting up. From what I gather, the economy will not be able to handle high oil prices. And who knows, if there is another MF Global scandal lurking in the shadows.

There are also indications of a strengthening trend of social instability. One such indication is that Obama have already signed into law, precautionary measures. Things could spiral out of control and the strength in gold is, to me, an indication that people are understanding that low interest rates and low bond yields are a threat to ones savings and that the integrity of the financial system is under duress.

- Aramis

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Trading Strategy 4
A few years in the making
Economics, 120201

So, about four years ago I set out to find the perfect trading strategy. I found some interesting things here and some good to know things there. I have re-written the strategy hundreds of times and now finally I have a set of rules that I follow. I use the same rules when trading currencies, stocks and certificates.

Four years. That is crazy. Then again, I can at times be a perfectionist. Since it have required an immense effort, many many many hours of work, I have decided not to publish it.

However, I can tell you this and save you hell of a lot of time: do not mess with minute charts if you are not an arbitrager. lol

- Aramis

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Identity Managment
Fix for fragmented internet identity
Programming, 120110

Your identity on the net is fragmented. I believe the mobile will be part of that solution, because the mobile is all about identity and Net presence.

So, I have this idea that the mobile should have an app through which you can manage all your online identities. Google, Facebook and so forth they all want to own your identity. The kind of app I am talking about here, would not contain your identity. It would only offer you easy update of your status, signature, alias and so forth, on all places where you have one.

So basically a management system, extended with plugins. One plugin for each system that information could be pushed to. Furthermore a server solution with an API would enable callbacks form the forums and stuff you are interacting with. Signatures could be equipped with HTML links and thus it would also be possible to create a public profile where ones identity could be tracked ( only through those identities that you have selected yourself of course).

I got lots of more idea on this one, but what ever just wanted to get the idea out there.

- Aramis

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News Trading
I do not
Economics, 111108

So, during the past three years I have studied markets, economic theory, technical analysis, macro and much more. I have traded both monthly charts and tick charts, exploring possibilities and risk associated with each of them. I have not really invested that much. To begin with, I do not have that much money and secondly I have had no clue as to what I was doing, so why risk the little savings that I do have. Though my view of how to trade change with what I learn, I have right now found some sort of equilibrium where the new things I learn do not rock the boat. That is probably the reason to why I have not posted in a long time. However, there is this one thing that I have never ever really figured out and that is news trading.

While I have a theoretical understanding of how to trade based on technical analysis or fundamental analysis, I have no clue as to how to go about news trading. I know of buy the rumors and sell the news but that is it. When it comes to news like what this or that politician said, then how the heck do you know how many pips or points the price will move? Even if you are right, how do you know the market will not take out your stoplosses before proving you right? While I do believe in crowd sourcing, I find news trading on small time frames very much a game of chance. Also, I am unconnected and have no insider information, I get the information last and I am the retail guy.

I have been thinking about how to handle this for a long time. What I have ended up with is the notion that the same piece of news can have different outcomes depending on where the price action is at. Thus it is not only the news in itself, but the timing of the news that is of importance. Yes I am thinking here that the impact of a chunk of information, can not only be evaluated on its own but has to be evaluated in regards to where the price is at.

So what I have deducted here is two rules: To begin with the impact of a certain piece of news depends not only of the content of the news, but also on the timing of the news. Secondly, even if you know how the market will be affected, it is impossible to predict with a degree of certainty what happens to price before the market has priced in the news. So what you end up with here is the understanding that to be profitable you do not only have to be right, you also have to be lucky! Now if news trading is pretty much about being lucky, trading news is not so much about trading on information as much as trading on noise.

Certainly there are different kinds of news. If there is news that the exchange will increase the margin requirements in a market that have gone parabolic, well that it one thing because we have a good understanding of what that kind of information in that kind of price action environment could lead to. So no, that it not really what I am thinking about. I am rather thinking about the kind of news that is hard to interpreter. Take the recent Greek drama as an example. First the politicians says something, the the next day they say something else. One week later totally new and unexpected things happens and again the politicians changes their mind. Thus, if you are trading the yearly chart, what good did it do to you to trade the first piece of news? Nothing, since it was undone the very next day and only brought volatility to the market. You could have been better off just treating it as noise and accepted the whipsawing back and forth on the smaller time frames.

So if there is a news event that you are not able to interpreter, then any acting on that information would at best generate a random outcome. If you are able to interpreter the news and its implication, that is another thing. If you can not, then do not.

To me this have great implications, because it means that you can disregard much of the news moving the price. If price moves contrary to your trade, instead of trying to figure out if the news was a game changer and if your trade will now be rendered a loosing trade, you could perhaps add to your position because of the now more favorable risk reward.

What I am saying here is that if you have a fundamentally or technically sound trade and have opened a position, then stick to it and ignore the noise. If the news is moving the market against you, or if it is moving if in favor of your trade, the news should be treated as noise if you are not a hundred percent certain as to what the implications of the news are. This can also present you with opportunity Instead of worrying about the news moving the market against your trade, you can add to the position if this price action noise is presenting better risk reward opportunities. You can also get the courage to trade contrarian to what the sentiment for the day is.

Also, I am not so sure that news is actually driving the market. What I am sure of, is that most interpretations of the market moves is in the context of news. This is why the yesterdays market moves are explained with confidence today and tomorrows news are utterly unpredictable. I mean, just because someone tells you why the market did this or that, does not mean that they are right! They may be right and the may be wrong. Far to many times have I seen the price topping out, only to later on hear an explanation why it topped out. Now, if they can be so confident in as to why that happened like just a few hours afterwards, how come they could not tell me just thirty minutes before it happened? Just because some news got out at a certain point when something happened in the market, does not necessarily imply that this is why this or that happened in the market. Now, certainly it depends on the news but I am not talking about the extraordinary news here, I am talking about day to day noise.

So just to sum it up. If you do not understand the implication of the news on the market on the chart you are trading, then treat it as noise and leverage your position if the opportunity presents itself. Yes, this is very much was trend following is all about. Also, it fits perfectly well with the idea that I have of a trade being a game of chance, as soon as you have taken your position. Before you open the trade, you can plan it and be analytical about it. In a sense, you can affect the outcome of the trade before you make it, because you can decide if and when to make it. But when you have opened up your trade you do not have this power any longer, you can only pull out. At this point, it is only a game of chance and only time will tell if you were right or wrong, or perhaps if you were right but did it at the wrong time.

- Aramis

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Trading Workshop Letters
Just a post
Economics, 111104

So, I have been posting some letter to some friend trying to share the little I know about trading. The letters basically outlines the following: what is money, economic fundamentals, current trends, selecting an investment vehicle, money management and finally timing the trade. That pretty much sums it up I guess.

There is this one thing though, that I have never ever really understood and that is news. Sometimes the price moves contrary to news and sometimes aligned with it. Oh well, I guess you do not have to learn like everything anyways.

Well that sums it all up. Nothing much to write about. :-)

I have my eyes set on Unity 3D. Time for something new.

- Aramis

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Edda as Monica
My cousin play Monica
Personal, 111021

So, today there is an article in the news about my cousin Edda. She is going go be playing Monica Zetterlund. Read more here,

- Aramis

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Wave Trading Calculator
Helpfull tool when trading
Economics, 111015

So, my post about economics are becoming less and infrequent. The reason being that I kind of feel that I have less and less to write about. Much of what I have been writing about these past years have come to pass, so I feel confident that I am on the right track so to speak. Then again it is not only about being right, it is also about being right at the right point in time.

So, what I have ended up with is a fundamental picture of where we are coming from and where we are heading. I am hoping that leading indicators will help me with the timing of the bigger picture and then in order to minimize risk I have developed a Wave Trading Calculator.

No I do not subscribe wholeheartedly to Eliot Wave Theory, but I feel I have found ample evidence to support the importance of impulse legs, trends and mean reversion. I believe in trend following and I believe in money management. I have tried to do my best to work out a few rules based on my beliefs and the end result was a this calculator that I use to get a second opinion on the trades that I make. I call the calculator the Wave Trading Calculator

- Aramis

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Blog Why Not?!
Personal Blog of Aramis
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