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Showing posts from June, 2017

Trading Decisions of Your Stone Age Grandpa can Make You Money in FOREX

Why Ferrari or Rolex does not price their products at 149.999 or 12.999 but most of the items you see in your supermarket is priced like 4.99? Because they never like to be positioned as a bargain. Did you know that we tend to chose the price with less syllables even if the two prices have the same written lenght? These are some of the pricing strategies used by marketers.This is a very interesting topic and you can even find yourself deep in neuroscience while reading about it. Check this site, it gives 42 pricing methods to influence your brain, crazy, also deal with prices when trading and I believe there are some sub-concious forces in play. Knowing some articles on things like the effect of round numbers in trading, I see some more potential here and I find this worth digging more not as standalone trading strategies but more as filters. At the end of the day, no one knows how the price feed effects the primitive you…

Struggling Quant Episode 1: How I lost USD 500.000 while figuring out the link between questions, math, stats, coding and trading

Say that you are 30 years old and you have a good 25 years to work hard. Instead of going down the easy way of working for someone else during the day and killing time in the evenings and weekends, you have chosen the hard path of quantitative trading and started the heavy work. How many profitable trading ideas you can find in 25 years. Lets say you can figure out and test ideas in 10 days, 36 ideas a year and 900 ideas in 25 years right. Since this is my post, I am rounding 900 to 1000. Assuming a hit rate of 5%, 50 profitable ideas in 25 years, 2 per year and lets also say a profitable idea makes 20% per year. Depending on your initial capital, you will make X USD in 25 years. Lets say this X is USD 12.500.000 for me. USD 500.000 per year in average. This is my potential if I start doing things right now, right? So if I do things wrong for a year, I lose USD 500.000, this is what I did last year. I could not figure out how to operationalize all the scientific literature, huge qua…