Geez, I'm so happy I'm giddy right now and there is a lot I need to know. Background: I'm a quant. Math Awards, Engineering Degree, MBA. I'm sure most of you are quants, so you know what I'm taking about...having an intuitive feel for ballparking stuff, going for months at a time without balancing your checkbook because you have a decent feel for what is in the account, etc....right? Anyway, I got interested in precious metals when the Hunt brothers tried to corner the market and my interest in investing and finance widened from there. I went through rites of passage. In the beginning, I tried charting (poorly), then stock picking, then thought that stock picking didn't work so I moved onto intelligent portfolio planning, then got deep into Real Estate Investment and gamed the system well enough that my retirement will be decent. My interest in real estate investing brought me here to Elite Trader, which I followed mostly because the macroeconomic commentary is top-notch. I like the idea of a being a day trader, but I don't have the guts to do it (wife, kids, mortgage, etc.) Ok, now you're up to speed on the back story. So lately, I've gotten interested in precious metals again. My interest in it has gone full circle. I've been researching the punk out of it lately trying to figure out what it will do. Sad to say that I just recently discovered ETFs, and this alone is exciting because I have access to leverage. So I was on a metals website, and looking at some charts, and really focused on seeing patterns. Fiddling with moving averages, looking at moving average line crossings, the slope of the lines, the areas generated, etc. and I started making my own rules. Not odd rules, but rules inspired by the books I've read on charting without knowing what's what. I knew from my day job as an engineer that you can get better results if you pick the right time intervals for moving averages. And if the origin of the graph is wrong, or the graph is stretched out, it can be hard to read. Part of the key is setting the graph up so that you can differentiate background noise from real movements, and then look at the shortest timeline that is still makes sense because if its too short, you can't see enough. I'm not a nutjob, ok? So this is it. March 9, 2009 (technically March 10th), the day I figured out that I can really read the charts and make good buy and sell decisions. Not on everything, but a few select precious metals. I think I can apply it to all commodities. I back tested it. I put a book up against the computer screen like covering the answer when you study. I moved the book across the screen and was able to predict what would happen next. Not perfectly, mind you, but good enough to snag 15% here and 30% there. Using 2:1 leverage, I figure I can double my money playing a single precious metal in about a year using leveraged ETFs. Its exciting, dammit, and I tried to tell the wife why its important, but she doesn't get it. My friends won't really understand it either...maybe a couple. So assume its true. Assume that I have the knowledge to make 100% return a year. Now what? I mean seriously, I don't know where to go with this. I have a "play account" in an IRA that I can build up. I can move some funds over from my now decimated stock portfolio which I've been ignoring for my mental health. So I don't have to quit my day job (can't yet anyway). My thought is that I can put together a track record. Document my trades over time vs. market movement to prove that its not chance. Then use that information to get a job? Work for private investors on a commission? Is 100% annual return good enough for day trading? I need guidance. What do I do with this knowledge? It could take me a long time to make any real money. What should I do now? Thanks for any advice, SM
for a quant you are not smart all you need is to listen to what smart people on ET say, I made lots money that way I listen to what people say SO EASY
Its ironic that your handle is Bananaa. I have a saying about calculated risk. To me, I would never invest my money in a high risk venture like a banana farm. But I would run a banana farm myself, because then I could control the risk. FWIW, I don't really know if banana farming is high risk...might be low risk. Yes, there are smart people here, and you can get great ideas, but I want something I can consistently rely on for planning purposes. I can say that my own preconceived notions about the real estate market were flat wrong...I way underestimated a coupld things. But I digress. Its better to make your decisions with no emotion, and no preconceived notions in my book. Sometimes, my own opinions get in the way. Charting is emotionless. SM
Based on your post, I would not say you sound smart at all if you're coming to the forums for answers.
Who cares? I don't care whether I sound smart or not, I'm seeking info. Never met a smart person yet in my whole life who wasn't looking for answers. Hint: Thats how you get smart.
you mentioned controlling the risk in a banana farm,controlling the risk stood out,your wife knows you ,she's not convinced,your on here asking questions and you are a quant,if thats so,quants are highly intelligent .the trade off is a lack of social and sometimes common sense,no amount of control can overcome that,anymore than water can put out a grease fire,common sense knows that control is a fantasy,chrts are easy to read and profit from,if you beleive in control and absolutes,therin lies the missing link in your theory,they are only probable and when they prove to be wrong ,you take a loss,part of the nature of probabilities,only right a percentage of the time ,not absolute ,no control over when they will become improbable,this is simple common sense,if you can digress and absorb this you may succeed
This looks like a Hypostomus/Joe Doaks spoof. First you start a thread and garble or fantasize incomprehensibly. You did that. Good. Second and next, you need to go and get yourself a new set of brains. LOL.
Thats good advice. Honestly, as an engineer, I'm better off than most. I've met some that you'd swear have Asberger. I affirm that I do understand that these aren't absolutes, and there are losses, they seem to be about 1/3 of the time. When I was back-testing, I saw that I made mistakes, and they stole from my bottom line....like 50%. It seems that as long as you don't bias anything, and you're prepared to completely change your position because the chart tells you to, then thats all part of it. Like Blackjack, but better odds. SM
Nah...I was tired as hell and didn't really have anyone to share with so I dialogued. Glad this stuff is anonymous. I was giving a resume to try to give an idea that I'm serious and not just joking around. And I did that to get some honest advice fo where to go from here. Until yesterday, I thought charting was along the lines of horoscopes. Now I full comprehend that its not. I've always needed a new set of brains, but I have a new set of eyes now. I'm seeing things differently and its pretty cool. It just "clicked" for me last night. SM
Yeah baby! I sat on the sidelines for my system to tell me when I could make my move. The commodity I was watching (silver) floundered indecisively, giving me no signal, so I found another commodity that did follow my system (Energy). Bought an ETF this morning, which was the first time that I've ever, traded off a chart. Thank God my indicator said go long! My system is telling me stay long, so long I am. I think I'm going to like this tea leave reading stuff. SM