Unfortunately, my account originally financed with $500 USD was closed with a value of $30 USD over around 1000 trades. During the course of this experience, I learned several interesting things that will allow me to trade my larger investment portfolio with stronger technical analysis.
The main thing I realized was that I was extremely unwilling to use a stop loss. While I did save myself several times by stopping out right before the market turned extremely against me, I would hesitate sometimes, leading me to take larger losses than I should have. For this, I developed a…
I’ve been a bit busy with medical finals approaching, so I just wanted to give a super brief overview of my current investment decisions that I am looking at. (These are written as a notebook to myself on where I’m viewing the market rather than for an external reader)
Biden’s 3 trillion stimulus plan
Obviously, this continues the inflation narrative, but since he plans to finance a large portion of this through higher taxes, we could potentially see some capital outflow out of the US. However, I think it’s most likely that stocks will continue rising on inflation expectations but…
A Foray Into Futures
My Technique: I tried to catch falling knives on the way toward the supporting trendline and cut losses if the supporting trendline was significantly broken. I traded using 1–60 minute charts.
Watch the trend. Then when it goes the opposite way, begin to bet on the trend continuing.
Never be net against the long-term trend!!
If a breakout starts to occur (and continues a couple ticks on the longer term (hourly chart at min) , immediately get out and switch sides, but be ready to cut losses fast
Patience is where you make money
Note: I was meant to do a nightmare review of what the Fed could do, but I thought my positions were pretty obvious. Also been a bit sick, so this is a bit rushed
Market Participants are all interested in two ideas
This effectively suggests that the stock market has become disconnected from its fundamentals. However, as can be clearly seen from the chart, earnings don’t seem to be down much, but this doesn’t take into account the massive printing that’s been done in recent months and…
What are CLOs
Some investors fear that Collateralized Loan Obligations have begun to mirror the Collateralized Debt Obligations that were held responsible for the 2008 crisis. However, while both are composed of toxic loans that borrowers are likely to default on that have been dubbed AAA grade simply because they are “sufficiently diversified,” the market risk for these loans does not lie with banks. There are currently roughly $700 billion CLOs outstanding, but only $99 billion are held by American banks, making up at most 1.5% of the balance sheet at the largest holders such as J.P. Morgan Chase in…
What is a lost decade?
The term was originally coined to describe Japan post 1991 when the Nikkei Index fell from its 1980 highs. In inflation adjusted terms, the Nikkei has never recovered from its 1991 high (although the Nikkei 225 has recently surpassed its 1991 high in nominal terms). During the boom, Japan lowered public spending and, toward the end, raised interest rates to attempt to slow the bubble, all while paying down government debt. These inherently set up a deflationary atmosphere even as Japanese companies, flush on foreign cash, found no avenues to further growth, pushing their money…
What is a NFT?
NFTs, or non-fungible tokens, are unique digital tokens stored and transferred on the blockchain, allowing investors to see their past trading history and origin. While having no use case on their own (then again, does art), NFTs serve as an irrefutable proof of ownership and authenticity since investors can simply check the originator of the work. …
Intro to the Fed
The Federal Reserve is the central bank of the United States and acts in conjunction with the Treasury and other department branches to control the monetary supply. Composed of 12 banks for different geographic regions of the US, the Fed was founded by the US Congress in 1913 to alleviate financial disturbances (ie. limit the cyclical boom-bust nature of unregulated markets).
The Fed plays both a regulatory nature in limiting risk and conducting/settling transactions as well as controlling the monetary supply and interest rates. The Fed has two branches:
Inflation is when more money is chasing less supply. Effectively, inflation and deflation are a question of supply and demand. The supply of money depends both on the amount of actual money in circulation (the M2 supply) as well as the velocity of money (how many times each dollar circulates within the economy) and the demand for money is the goods and services that people want to buy with currency. …
An Explanation of Capital Gains
Most investors in any asset class are familiar with the difference between long term capital gains and short-term capital gains, but in brief, long term capital gains(LTCG) are taxes on any asset held for over a year while short term capital gains (STCG) are taxes on any asset held for less than a year when sold. Generally in the US, STCGs are taxed at an investor’s income tax rate while LTCG are taxed according to the table below:
The Technique and a Short History
Shorting against the box was a technique used by investors to…