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      07-07-2011, 11:30 AM   #33
scorcherjf
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Large banks and hedge funds have rules and regulations to abide by and of course they'll do anything within their power to maximize wealth to shareholders and/or profits while still conforming to their set of "constraints." If anything, the ones to blame are the government policies, lack of regulation and oversight, and out-dated rules and regulations which are often way too slow at keeping up with current market trends and technologies. It often takes a meltdown or a crisis for them to wake up and finally act and by then it's already too late (i.e. LTCM, tech bubble, quant crisis 07, CDS/MBS crash 08, junk rally 09, and now the EU/PIIGS and China). And yes, individual investors will often bear the brunt of the damage since they're typically slower at acting (they have other jobs usually), don't have as much information (asymmetry), and lack the tools necessary to be as liquid - three things that are required for arbitrage-free and efficient markets.

True, the probability of guessing correctly during bull markets is higher but that's obvious. What separates amateur traders and experienced ones is often their risk management. Sure their success rate is probably similar, but the one who correctly sizes his/her trades will ultimately yield superior performance.

Your views of our government and financial markets really sounds niave... I actually had similar thoughts years ago when I was still a student testing different strategies. Once you actually do some digging and learn how a lot of the financial systems work like the federal reserve's role, the house banking committee, etc. and how they interact with each other you'll probably realize that everyone's not out to "get you" and big brother isn't there just to squash down the little guy. Perhaps one day you'll realize that the other players aren't "cheaters" but merely acting within their capacity - you would probably do the same if you were in their position so try and see things from other perspectives.

About the CPA... that's accounting which isn't exactly finance. Why would you expect them to teach CPA's how the whole banking and financial system works when it's something that's barely even taught in business schools or finance degrees? Do some research and look at what those degrees actually say they attempt to teach you and you'll see that it's mostly quantitative tools which are necessary in the field. It's up to the person to use those tools to learn about what they want after with a more disciplined and objective viewpoint. Their understanding of the banking system may not be any better than yours, and if it is, it's not because of their fancy degree but because they've sat down and reasoned through it rather than dismissing the whole system as a scam.

Anyway, with your charts, "mini cup handles", triangle breakouts, etc. you make pretty common mean reversion predictions. My amateur advice to you would be to scrap those etch-a-sketch drawings on charts and use more solid indicators (credit spread and vol swap rates perhaps) and build a model that you can backtest and verify. My amateur economic advice would be to keep an eye on China. Sure they may have increasing inflation and some local debt issues recently but their growth is insane and it seems to be hard for capitalist americans to comprehend how a controlled government could actually be successful. The U.S. is in a terrible position right now with their public debt, labor unions, and possibly declining into stagnancy. It's a lot easier to fight inflation than deflation... look at Japan's history.
Quote:
Originally Posted by mact3333 View Post
Black box trading is great for large hedge funds or banks...they can legally manipulate the system because they have the lobbyists and politicians on their side...when they fail the tax payers must bail them out...thats how the game works...we, on the other hand, must ride along with the cheaters and manipulators cause if we dont, we get our head handed to us.

During a true bull mkt, anyone throwing darts can be and look smart...its the choppy or bear mkts that seperate real traders from the go long and hide group.

Believe me, I have had many many bad trades in my life and will cont to have them...only way to make money is to catch a trend change and ride it...for the avg Joe, if you try to trade for the short term, you will lose 90% of the time.

You needed to catch that bottom on 3/9/09...now the goal is the catch "the top" and ride the bear down when it comes...I am banking on inflation for now...the charts look like 1962-1982...I am looking for a massive expanding triangle on a 20 year chart to play out...will it happen?...who knows, but I have reasons to believe it will...wouldnt surprise me to make all new time highs late this yr or early next yr followed by 2 yrs of declines undercutting 666 on SPX in 2013-2014.

Our economy is a ponzi scheme and everyone knows it...the bond vigilantes will wake up one day and demand that interest rates go up...the Federal reserve only knows one thing, to expand the money supply...alot during bad times and a little during good times...hence the value of the dollar has decreased by 98% since the inception of the Fed Reserve....do you think this trend will change????...not likely...once we hit 5.00 gas inflation will halt our economy and the fake nominal gains you get on SPX will be overshadowed by the 800.00 a month you spend on gas...funny thing is this, if Obama increased your tax rate by 10% you would throw a shit fit, but when the Fed Reserve increases their balance sheet by 2T over several yrs(printing money out of thin air), its doing the exact same thing by causing inflation but nobody will raise an eyebrow about this... this is a clandestine tax that wont be appreciated by most cause the "people" in charge do such a great job of hiding the ponzi scheme....

Its a funny world, my wife is a CPA and they never taught her in college how banking(fractional banking) works...find that abit odd?...I know bankers who couldnt explain it to me also...hmmm....

I could post more charts on here showing "my" likely roadmap for the future but I wont...not until you show me something useful...
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