General Trading Chat

[DSM]

India is an elephant, and on a global stage, can pull its own weight. So it need not run as fast as the cheetah, or fly like an eagle but that does not matter, as it has it can stand on its own and should not feel inferior in comparison to others. Though we could have and can do much, much, much better. As regards to our economic growth, even if it is 4% or 5%, that is in terms of GDP size quite an achievement. For comparison, one student may improve 20% from a base of 40 to achieve 48, whereas on a base of 90, 5% improvement works up to 95. Hence comparisons can be misleading. At present, there are no other major countries that have growth rate comparable to India with the exception of China (though I do not believe their figures, and even if true, have come at a great cost) So is it any surprise why FII, multinationals etc want to set up business here?

Now having said this, if some economist says that our real growth is 3.5% or 4.5% should it matter? Do we need to have so much of a fragile ego that we get worked up to attack this opinion? It would be silly to waste time refuting each and every critic. We could also say from the perspective of the critic, there may be some validity in their thinking... But that should be taken up as a challenge to do better....

We do have a good guardianship of the economy. However, there is a lot of scope for improvement. Rather than resting on our laurels, we need to take inspirations from other big countries who are world leaders and have achieved economic growth and development, especially having come back from ruins. E.g Germany and Japan both had economies destroyed by war, but are economic engines of world. China too has made impressive gains leapfrogging ahead of us (though comparatively they had been laggards at one point of time) However, there are negative lessons too from China as the economic progress cannot be accepted at cost of environmental pollution and dependence on exports....

So while we all have opinions, and even if we disagree about them, or have different perspectives which lead us to different conclusions, it is not appropriate to get personal and pull one another down. We are much more and much better than this.... Just my view... Enjoy and have a great weekend.

 

[VJAY]

India is an elephant, and on a global stage, can pull its own weight. So it need not run as fast as the cheetah, or fly like an eagle but that does not matter, as it has it can stand on its own and should not feel inferior in comparison to others. Though we could have and can do much, much, much better. As regards to our economic growth, even if it is 4% or 5%, that is in terms of GDP size quite an achievement. For comparison, one student may improve 20% from a base of 40 to achieve 48, whereas on a base of 90, 5% improvement works up to 95. Hence comparisons can be misleading. At present, there are no other major countries that have growth rate comparable to India with the exception of China (though I do not believe their figures, and even if true, have come at a great cost) So is it any surprise why FII, multinationals etc want to set up business here?

Now having said this, if some economist says that our real growth is 3.5% or 4.5% should it matter? Do we need to have so much of a fragile ego that we get worked up to attack this opinion? It would be silly to waste time refuting each and every critic. We could also say from the perspective of the critic, there may be some validity in their thinking... But that should be taken up as a challenge to do better....

We do have a good guardianship of the economy. However, there is a lot of scope for improvement. Rather than resting on our laurels, we need to take inspirations from other big countries who are world leaders and have achieved economic growth and development, especially having come back from ruins. E.g Germany and Japan both had economies destroyed by war, but are economic engines of world. China too has made impressive gains leapfrogging ahead of us (though comparatively they had been laggards at one point of time) However, there are negative lessons too from China as the economic progress cannot be accepted at cost of environmental pollution and dependence on exports....

So while we all have opinions, and even if we disagree about them, or have different perspectives which lead us to different conclusions, it is not appropriate to get personal and pull one another down. We are much more and much better than this.... Just my view... Enjoy and have a great weekend.

Wow great views DSM. .
:clap::clapping::thumb:

 

[Punter786]

@DSM

Only issue is this elephant is in a mire and going further into it. Not making required efforts as the great countries you have cited.

 

[nirav_j]

Constant pessimism, belittling and mockery of the govt or its data does not serve any purpose nor adds any value to discussion. Its just political ranting.

If one reads the above post, one could easily be led to think that India has gone bankrupt and is about to enter the great recession.

Nor is NF at 8600-9000 in a "bubble"

If i recall correctly, there was a time when such pessimist economic eggspurts called the 6000-6300 band as a "bubble"

 

[madank]

Folks,

Its been a long time since I posted in TJ and thought of sharing something. There was a question that always comes into any trader’s mind – All out or scaling out is better as an exit strategy. Was going through some old emails and found this one. This conversation happened between me and another trader when we both were trading emini S&P back in 2007. It was an email conversation in a group and bear with me for this long post !!

***********************
Jonathan: Hey Madan – According to you, scaling out is better than all out as an exit strategy?

Madan: If you scale out, you really have multiple trading systems that happen to have a common entry point. Since each exit would have a different risk/reward ratio, you should evaluate each of them separately.

You certainly can scale out, just don't evaluate it as one system. It's not.

Richard :
That's an interesting way to look at it. I'm going to have to think about that.

However, I don't agree that multiple exits are separate systems. The all-in, scale out methodology isn't about being right or wrong - it's designed to deal with the fact that the outcome is uncertain. The method can be evaluated in total by looking at the frequency of each of the outcomes: max loss, first target only hit, first and second target hit, etc.

Madan: Lemme put it in a different way then…For example, on a momentum play with 3 contracts, having two quick targets makes sense because the play is a fast propulsion play on a breakout. With the third contract as a runner, bringing the stop up to breakeven makes very little sense to me. To be going after runners, you are entering a trend trade of the Donchian breakout variety(for eg, which requires much larger stops in order to ensure that you catch the trend!

As I have the ability to backtest most of the trading ideas using automated strategy testing, the obvious back testing approach is to investigate the parameters of the quick target trades separately from the runner trade. It becomes clear that the optimizations are different for the runner than from the quick target part of the trades. I am not saying that scaling out method is not profitable, but I am suggesting that splitting the trade into its two separate components may make more sense, and possibly lead to greater profits

Jonathan: Agreed Madan. Nothing is right or wrong. It is just a trader’s comfort level with the exit management.

Madan: Jonathan - When you look at trading strategies/systems empirically you see that

(1) scaling out smooths out the equity curve, it does not necessarily make more net profit

(2) holding a full position for a winner and keeping the initial large stop can produce large net profit, but it requires a very strong "psychological constitution."

Think about, most trend following systems are 40% profitable trades, 60% losers, with a profit factor of 1.6+ That means statistically, you have to be able to stick with the system or strategy through 10-15 repeated stop outs to get those1-2 runners. If you fail just one time to execute on a trade setup and that one would have been one of your runners, you are setup for an even worse draw-down.

Richard: Well, here is the link from Van tharp’s website (some link about why scaling out is not better)..Apparently, Van says scaling out gives more mental satisfaction than financial sense.

Madan: I believe that both Tharp and Link make the same argument regarding scaling out, but they also make the point that the trade entry is not nearly as important and the exit. They tend to focus on strategies that have a defined risk, and a defined target or specific exit that they can back test to some degree. Take for example the opening gap trade. The entry is somewhat undefined, but the exit is not. If you can back test an opening gap strategy with a defined probability of the gap closing, then Tharp is right, scaling out will reduce your profits without reducing or losses.

With few exceptions, most of the strategies seem to be focused in the entry, with an unknown target. In my opinion, it's the exact opposite of what Tharp recommends in his books (if I remember correctly, it been a few years since I read it), and it would make sense why he would recommend against scaling out.

I am also writing a strategy that is entry focused with unknown targets and optionally scales out. I have found that the part of the position that is scaled out needs a separate exit strategy rather then just a fixed target. Otherwise, the additional risk of that additional contract does not pay for itself when you are stopped with a full position. So in fact, it is two separate strategies with a common entry. While scaling out reduces the strategy max profits, it also reduces the draw downs, which allows me to trade more contracts.

I think the choice may be summed up as:

- If your strategy is focused on the entry, with unknown targets, then scaling out makes sense. It will reduce your draw down (and your max profits), but allows you to increase the number of contracts you can trade.

- If your strategy is focused on reaching a specific exit, and the entry is less important, scaling out does not make sense. It will reduce your profits and increase your draw downs, requiring you to reduce the number of contracts you trade.

I think it's that simple.

*****************************

 

[DSM]

Punter786,

And hence I used the word thrice - that we could do much, much, much better.... Unfortunately, our party based political system is partly responsible for this, though not sure what alternatives there could be. Many people though get frustrated and think that dictatorship or military rule can be the answer. But you only make it worse or double your problems if you get bad dictator or bad leadership there... We need people in the government who love the country, want to serve the people, we need a visionary. (But there are very few of these, possibly in low single digits among our self and party first politicians...) Some people see that in PM Modi.... But he is only among so many, and may be constrained by the reality of politics and idealogy... (GST, US Nuclear Deal, Foreign Retail bad in time of UPA, but good now) We are at a situational point that can be transformational.... but a lot needs to be done if we are to lift tens of millions of people from homelessness, poverty, illiteracy etc while at the same time battling narrow parochial mindset, corruption and caste based politics and systems.... We have great challenges ahead in terms of weight of the above mentioned internal baggage, hostile neighbors (Pak, China) and a lot many trying to scuttle our progress while cosying up for economic benefit (US, Europe). So among all this, we need a leadership that unifies what binds us together while chipping out difference that divide us... And it is a difficult thing to do, but required if we need to make progress and move ahead. While saying this, let us do our little bit (howsoever small) and not count only on our politicians or leadership to lead us....

@DSM

Only issue is this elephant is in a mire and going further into it. Not making required efforts as the great countries you have cited.

 

[Punter786]

Not that I cannot logically refute childish laughable comments, but to do so will go against my own signature quote. I did that blunder once under provocation but not gonna repeat it now. That too to card carrying bhakhts.

 

[Punter786]

@DSM

I cannot agree with you more my friend. Modi sahab came with lots of hope and expectations. Sadly all expectations have been belied. Not much has been done in term of radical reforms. I feel this was our last chance as we had full majority after 25 years. All these things make me worry about India's future. Our youth advantage will become burden if we did not create jobs. I can only see massive problems around and no solution by our netas! Jim Roger khiskoed seeing this.

 

[nirav_j]

Its going to be a good weekend. Or is it ?

 

[Rish]

India is an elephant, and on a global stage, can pull its own weight. So it need not run as fast as the cheetah, or fly like an eagle but that does not matter, as it has it can stand on its own and should not feel inferior in comparison to others. Though we could have and can do much, much, much better. As regards to our economic growth, even if it is 4% or 5%, that is in terms of GDP size quite an achievement. For comparison, one student may improve 20% from a base of 40 to achieve 48, whereas on a base of 90, 5% improvement works up to 95. Hence comparisons can be misleading. At present, there are no other major countries that have growth rate comparable to India with the exception of China (though I do not believe their figures, and even if true, have come at a great cost) So is it any surprise why FII, multinationals etc want to set up business here?

Now having said this, if some economist says that our real growth is 3.5% or 4.5% should it matter? Do we need to have so much of a fragile ego that we get worked up to attack this opinion? It would be silly to waste time refuting each and every critic. We could also say from the perspective of the critic, there may be some validity in their thinking... But that should be taken up as a challenge to do better....

We do have a good guardianship of the economy. However, there is a lot of scope for improvement. Rather than resting on our laurels, we need to take inspirations from other big countries who are world leaders and have achieved economic growth and development, especially having come back from ruins. E.g Germany and Japan both had economies destroyed by war, but are economic engines of world. China too has made impressive gains leapfrogging ahead of us (though comparatively they had been laggards at one point of time) However, there are negative lessons too from China as the economic progress cannot be accepted at cost of environmental pollution and dependence on exports....

So while we all have opinions, and even if we disagree about them, or have different perspectives which lead us to different conclusions, it is not appropriate to get personal and pull one another down. We are much more and much better than this.... Just my view... Enjoy and have a great weekend.

Agreed...

One Important thing/slowly vanishing is missing in this generation....habit of "Saving".....

India has been saved by habit of "Savings" in our culture....

Now it is missing in the system(now only EMI)...will be a disaster for our next generation....