my journal 3

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Old Jan 30, 2012, 10:16pm   #181
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Re: my journal 3

Yamato started this thread The new episode is out:
Watch Mob Wives online (TV Show) - download MobWives - on 1Channel | LetMeWatchThis

This is an action-packed reality show.

I'm going to watch it and then try to sleep, because tomorrow, at 8.15 am, I have to give some IT consulting to my friend, who maybe is being cheated on by his wife. We have to figure out how to install a keylogger on his computer, and similar issues.

Just one trade by the systems today, as i mentioned earlier. At any rate, from here on, I am expecting some losses, so I'm really not looking forward to the coming trades. After the first two weeks being so good, I am expecting some impending losses.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 12:54am   #182
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Re: my journal 3

Yamato started this thread

Still working on this thing... the "combination with replacement" formula...


How long more... how long more at the office?


It can't be just the combination without replacement formula PLUS the "n" value, because that works with 5C2, but not with 5C3 and more than 3. It only works if you pick 2 numbers out of the total. So the complex formula is needed but I just can't figure out how they derive it. And this pisses me off, even though I won't need it for my trading, and I won't need to figure out the formula for sure. This is what pisses me off about the studying of math. I can obviously memorize all the formulas, but I get frustrated when I can't understand how they're derived. Since in some cases I can understand them fully, when I can't, I feel stupid and I feel I haven't completed the task. And I never accepted that I have limits. I've always been taught to not accept my limits and push further and further my understanding and knowledge. I was taught that it's impossible that I have limits, at least mentally. By my father. That's why I can't sleep, in general. Skipping class is ok, skipping work is ok... everything is ok, except being mentally lazy. If there's something I don't understand, I feel the urge to figure it out, often even if I do not need it. But also if there's something I don't know, I need to find out. I can't really watch any movie from start to end because I have to interrupt it and check facts about the movie, the actors, and so on. Several times per movie. If it's on tv, I still get up and go check things on the internet. It's hard to see people who have a favorite movie and don't remember its title, when I check facts about movies I don't like. I immediately consider them idiots (meaning "superficial"), and as a consequence, the majority of people are idiots. Of course this is not just limited to their behaviour with regard to their favorite movie. Like this girlfriend I had, she wrote on her cv she was fluent in french and she got hired to teach french, and she was ok with the fact that she didn't know how to conjugate the most important verbs. That was unacceptable to me. I was shocked when I saw that.

Like this neighbour's child screaming all the time. Do you know there's a method to teach children not to scream all the time? I read about it. You're the mother and you haven't, in 3 years of life of your child? You retarded bitch - you weren't supposed to get pregnant if you're not capable of doing the research to teach your child to not **** everyone off all the time, including his family. This ****ing child can actually talk, but he prefers to cry about every ****ing thing. He can talk, but he still cries like a ****ing six months old child. That's because his mom is a retarded bitch. He's screaming right now.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 8:11am   #183
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Re: my journal 3

Yamato started this thread Ok, here we go. Awake and showered, and getting ready to call my friend and install teamviewer and refog on his computer. What a pain in the ass. I am not going to do this more than once a week. I am sure he'll keep asking me for technical assistance forever.

Not more than once a week.

I met him in the army, and we've been friends ever since. I made friends with everyone, without being classist, as my mom taught me. But he has no education and being classist is smart instead. Consequence of not being classist: given that he has no education, ever since we're friends I am his top expert on everything, so I get asked questions endlessly, even though I never ask him anything. Make five friends like that, and you're screwed basically. Because every single one of them feels the right to keep asking you things until things are evened out between the two of you. He even asked me to go on vacation, for free, at my summer house, at which point, I declined. I don't give it to anyone - especially if they ask - so I don't care how poor you are. You can't just say "hey, you have this house, I don't, so please let me go there for free". Being classist is pure self-defense, because you don't put yourself in situations where you're going to be forced to give everything away. We're either communists, or we're all classists, whether we admit it or not.

There he goes. He came up with a new idea: facebook password cracker. Now I have to work on this, too. Fantastic.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 9:34am   #184
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Re: my journal 3

Yamato started this thread Ok, finally I got to the office. My friend understood the situation - but each time I have to explain it to him all over again, that I can't deliver what he expects me to deliver.

We settled for two consulting sessions per week, from 8.15 to 8.55sh instead of the two consulting sessions per day that he wanted me to do. A lot less than he expected me to do, and a lot more than most people would do.

I told him "i know you can't sleep at night because of your worry about your wife, but you can't expect me to do the same thing and stop sleeping at night because I have to follow you in this thing".

**** this thing of "giving your life for a friend". Every time I hear someone say to me "I'd give my life for a friend", the next thing they do is ask me to do something for them.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 1:39pm   #185
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user-defined functions and one more test with damn combo with rep.

Yamato started this thread I am still trying to figure it out, the damn function used to calculate the combinations with repetition. I failed again:

But the nice thing is that this time I learned to quickly create user-defined functions, so it will be useful for the future. I created two of them. One for the triangular number and one for the damn function itself, which for a second I thought I could derive from the sum of all the triangular numbers from 5 to zero.

Pretty soon I'll give up and just be happy with having memorized the damn formula:
Click the image to open in full size.

What I wanted to do is focus on this thing, because I realize it's the foundation of probability and it's a neat little diagram, with the four possibilities, which in the future will help me categorize all probability problems.

Of course if I didn't have the job to worry about and to get up for, I'd sleep better and have more time for thinking clearly. Llike this I am kind of burned out all the time, but I am still somewhat moving forward.

Anyway, for today I learned something, I did some math (finished khan's review exercises), I did some probability, so I am ok.

I even resumed talking to my roommate, without exceeding into clowning. We talked for 15 minutes, and then I went back to working quietly. It would be perfect if we could do it like this every day, or twice a day.


Ok, one last try with the Italian wikipedia:
Calcolo combinatorio - Wikipedia

Combinazioni con ripetizioni [modifica]

Quando l'ordine non Ť importante ma Ť possibile avere componenti ripetute si parla di combinazioni con ripetizione. Il numero di combinazioni con ripetizione di n oggetti di classe k Ť uguale a quello delle combinazioni senza ripetizione di n+k-1 oggetti di classe k ed Ť quindi uguale a:
Click the image to open in full size.. Ad esempio, vi sono Click the image to open in full size. modi di distribuire a 2 bambini distinguibili 4 caramelle indistinguibili, contando anche i casi in cui uno dei bambini non riceve nessuna caramella: 0-4, 1-3, 2-2, 3-1, 4-0. Equivalentemente, le combinazioni con ripetizioni informano sul numero di possibili n-ple di addendi non negativi la cui somma sia k (considerando diverse n-ple in cui eguali addendi compaiano in ordine differente); nel suddetto esempio, sono mostrate le cinque diverse duple di somma 4. Inoltre, le combinazioni con ripetizioni per n oggetti di classe k rappresentano il numero delle derivate parziali di ordine k calcolabili per una funzione a n variabili.
Ok, understood just a little more. The roommate is back, so I can't focus anymore. I might do some statistics now.


Yeah, he turned quiet again. I am doing it:
AP Statistics Tutorial: Transformations to Achieve Linearity

But before moving on to this, i found an interesting paradox or fact that I want to discuss because it's so counter-intuitive that it is worth mentioning.

If you have a coin, you have 50% of tossing a head. Now, instinctively, you'd say that if you toss it twice, you will then have a 100% chance of getting a head. That is close to the truth, with the law of large numbers, and if you toss it one million times.

But, interestingly, your chance of getting at least a head is only 1 - 0.5^2 = 0.75. In the same way you'd say that if your chance is 1%, by doing something 100 times, it will be 100%. And instead it turns out to be 1 - 0.99^100 = 63%.

That really strikes me as odd, but if you look at the tree diagram of coins, you see that it's the case:


You see? You toss the coin twice, but your chance is not 100% of getting at least one head. As you increase the number of tosses, the probability of getting at least one head increases (as a whole, not the individual ones), but it never goes to 100%.

Probability is a counter-intuitive field. Each time I have to do these examples over and over again, because by default I go back to the old thinking, that is wrong.

This is very related to trading, because let's say you're making a trade that you say is... 99% sure. You might make two opposite mistakes.

The first one is thinking that, as long as each time you make a 99% sure trade, you're ok. Indeed, after by making 100 such trades, as I said before you have a 63% chance of incurring one loss, so if you risk everything each time, then you'll blow out the account, with a probability of 63%, and a trader trades much more than that. Each time you have a feeling of a pretty much sure trade, and yet, by making many of them, your risk of failing once goes up each time. The same applies with other tiny risks we take each day, such as crossing the street, going out at night, and similar things. Each time you go out your chance of not being mugged goes down, exponentially (with a base a tiny bit lower than one).

The other potential mistake is to think that your probability is bigger than it is.

Anyway, it's interesting to think that if you go out at night and the risk of getting mugged is 0.01%, so your chance of not being mugged is 99.99%, which is 0.9999, then by going out every night for 10 years, your change becomes roughly 0.9999^3650=70%

I've done the stat trek material until minute 4.30 of the video, at the start of Flowchart.

This digression from... regression is anything but idle talk. I am in fact digesting the math I've covered in the past 4 months. I'd need a lot more digesting than this, but, since the final objective is math applied to trading systems, I am going at an acceptable speed. Of course I am not going to be teaching math after this. I will be happy if I can come out of this effort with the same knowledge of math as a good high-school student.

I was a bad high-school student, and I was particularly bad at... everything, and they made me stay back twice. I skipped months of classes. I used to go to the park and similar, or to watch movies. And I didn't do any homework. But Italian school will drive anyone intelligent crazy, because it's all about memorization and kissing up. I would have been better off without ever setting foot in a classroom. I would have learned much more from home schooling, but my parents didn't think of it. Actually the problem was precisely that my father did homeschool me, by giving me extra homework, because he said I wasn't getting enough at school - that's when the sadistic mother****er really screwed my academic future, because I got fed up with everything related to school and homework. Not only did I get to go to school and do that homework, but I got extra homework at home, and never once did he tell me "good job". Real ****ed up asshole I had for a father, and stupid mother who didn't have the strength and intelligence to stop him. What a ****ing bunch of idiots I had as parents. It really sucks.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 6:45pm   #186
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Re: my journal 3

Yamato started this thread Ok, I am back home. I finished the work on stat trek and got to this lesson:
AP Statistics Tutorial: Residuals, Outliers, and Influential Points

I will probably continue tomorrow because i need to digest this stuff. I am now 8 days/lessons away from this lesson:
AP Statistics Tutorial: Probability

which will finally reconnect me to probability. So it will be a little easier, and connected to reality and to what I've done recently.

Now I'll focus on the "combination with repetition" formula, for a change.

Jesus! Here's another one who came across mathsisfun and found their explanation of that formula to not be clear:
Yahoo! Canada Answers - How do combinations with repetition work?
How do combinations with repetition work?

I need to learn about combinations and permutations. I get all both permutation variation (with repetition and without), I also get combinations without repetition. With repetition however is proving to be much more difficult. I used Combinations and Permutations to help me with the first three but the explanation there for the last one makes no sense to me. I tried to find another site to help me but they made even less sense.
The same exact experience I've had. And I also don't understand the explanation given but it is better than nothing.

I hope i'll have the strength to focus on this for the next few days.

Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 7:34pm   #187
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Re: my journal 3

Yamato started this thread Good link, with tons of categorized calculators:
Calculator Soup - Online Calculator
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 8:46pm   #188
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still trying...

Yamato started this thread I haven't given up on combos and perms. Latest summary of the situation:

In the meanwhile I ****ed up and went long on NG, a bit too early. I might lose all discretionary profit made until here. Just as expected. I had said I had run out of lucky trades.


I also doubled up when I noticed I was losing. Yeah, all the same old mistakes. I should just stay away from the computer. I knew this, too. It just keeps happening. Win 1, win 1, win 1, win 1, win 1, lose 5 or more (even the entire account).

I am done with math for the rest of the day. I ended up doing some of their kindergarten exercises, because they are awesome and there's no other exercises around:

Now i'll start praying to make my trade go my way. It's down 600 now.

It either goes my way, break-even, or I can't close it. It's all psychological. That's why I can't trade discretionary.

Here's some good music, to encourage NG to rise:

Damn. It's putting it to sleep, that last part of the music. I am going to stop it and see how NG behaves. Of course I'll try to play other music to see what gets the best reaction.

Damn, I know what it is. It's the screaming child. We need to call the exorcist for the screaming child, or NG won't rise.

You know, I probably placed that damn trade because the child was frustrating me. Each time I hear that prick, I feel the urge to speed up my profit, in order to escape these neighbours. I think I will sacrifice the neighbours to NG, to see if it rises.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 9:45pm   #189
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Re: my journal 3

Yamato started this thread Interesting website:
ThatsMyFace - Custom Action Figures, Dolls & Masks from your Photos

Child is still screaming like he's possessed. NG still falling like it's possessed. I think it just hit bottom now, at -9%.

Nope, still falling. Child still screaming, too.

I am now losing 1500 dollars.


Instead of going to bed peacefully, with one NQ trade decided by the system, I am going to bed with a 1500 dollars ongoing loss, decided by me. I am sad. I did it. I can't blame anyone, except my personal personality, which still escapes me. I don't think I wanted to lose 1500 dollars. I was convinced I'd make 400 dollars. Then everything happened by itself.

I am staying long overnight, as there's high hopes for a recovery. One of the systems (a very good one) says so. I'll exit tomorrow morning. It might take my profit target during the night. Hopefully it will.

In that case, I will have missed only one automated trade, hopefully not a profitable one.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Jan 31, 2012, 10:57pm   #190
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Re: my journal 3

Yamato started this thread Hey, when I'll learn, I'll learn. I have similar problems to trading in my life.

1) In trading, I place trades I know will hurt my account in the long run.
2) In sleeping, in the morning i plan to sleep well the next night, and then, when the night comes, I go to sleep late
3) when eating, I plan not to eat, and then I eat

I've got some areas where I can't resist my urges, and do something that I know will hurt me. Deep inside, I knew that placing a trade wasn't a good idea. I've kept writing it. And yet I placed that one last trade, and now I am regretting it. And probably this wasn't the last discretionary trade I placed.

Probably tomorrow I'll pull it off and get out of it with no losses. In any case, it won't kill the account, but I still won't live to learn from it. Just like I never solved my sleeping problem, and I never was able to not eat if I am sitting at the table with food in front of me, or had beer in the refrigerator. I drink it immediately. And if I have cigarettes, I smoke them... I am like this.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.
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Old Jan 31, 2012, 11:04pm   #191
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Re: my journal 3

Yamato started this thread In many ways the market is like people, because the market is people. Check this video out, I posted it before:

The majority of people likes to gang up, and move in crowds. That's how a crowd is created. Because people prefer to stick together. So when there's a guy dancing, no one gets up. When there's an increasing number of people dancing, an increasing number gets up. Even those who weren't getting up before. So they just get up because there's a crowd doing it - not because they wanted to dance, but because they want to be with the crowd.

I am the opposite. Anyway, today they were ganging up on the NG. So the majority was dancing, while there were some people sitting on the grass. But this went on up to the close. Then the dip****s will go to bed.

Presumably, tonight, in the next few hours, there will be a different crowd, doing different things... and making the NG rise. This will be a contrarian-anticonformist crowd maybe, like me, but less impulsive. Then the other crowd will wake up and either follow what these guys have been doing during the night, or resume their previous behaviour. That's how you have this tendency of the market to go one way at certain hours and another way at other hours. Because the dip****s go to sleep. I am a special kind of dip****: I like to go against the other dip****s when they're an overwhelming majority, and say "hey, where the **** are you going...?", without completing my sentence because I get run over by the crowd. Instead of waiting for the dip****s to go to bed at about 10 pm CET, I anticipate them, and get run over.

It was just a mix of thoughts, not a perfectly coherent argument. The point of the whole argument is to stress once more how people suck.

And I suck, too. I'll learn when I'll learn. If I don't learn, I don't learn.

If I get away with taking irrational risks, I don't learn. If I don't get away, I still don't learn. I never managed to learn this thing, to not touch the trading. I always tried to prove that I could finally be smarter than my systems. And every 5 trades, I am reminded that I can't be, because I don't have their patience and memory of probability.

****, ****, ****.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

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Old Feb 1, 2012, 6:39am   #192
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Re: my journal 3

Yamato started this thread Damn. It keeps falling. Losing almost 2000.

At this point I am not exiting, because if I didn't exit earlier I can't exit now, and only a miracle can save me. Needless to say, all margin is used up by this ****ing trade I placed.

All the talking yesterday, about the crowd doing one thing, and others doing another thing... it was wishful thinking. Besides, every trade has two people involved, so you can't really say that someone is doing something. Well, you could say that a lot of people were pessimistic, were more willing to sell, than others to buy, and then price fell.

I don't have volume on tws, and I can't figure out why.

I am ****ed.

What made me do it?

Price has to reach that green line for me to break even:


I'm gonna go to work late. I'll sleep, until I can see this thing end, close at break-even...

Now it's going better:


After all it's less than one third bounce given all the falling it's been doing. I am only asking for it to bounce 25% of what it fell.


I've been doing some math. In the meanwhile, it's been doing a lot better:


Maybe I'll pull it off, one last time.


**** it. I am going to work on time, and I'll follow this thing from work. But I won't be able to close. I have my limit order in. It either takes it, or I am screwed.

I didn't sleep that bad, so i am going. Besides, I need to punish myself for making this trade, otherwise I won't remember it. Not that I ever remember these mistakes anyway, like going to bed on time and similar.

Actually now it's doing a little bit better, but I don't know how long it can keep rising like this.


I'm going to do some more math, finish the khan review exercises and the new ones (now the total is at 295, with ten questions apiece), and then I'll go to the damn place.


Ok, done with math and going to the office.


At least one chart is going my way.

I have a feeling, magical thinking, that NG will reward me for going to the office.


Back from shower. Still losing 1500.

You know, every body needs a doctor. That's why it's a good job. As long as there are people, there are bodies.

Yeah, I am going to work already. I am drying.

Neighbour bitch slamming her door. She always leaves an hour before me. I can't believe this stupid bitch still hasn't broken her leg or something. She's always wearing high heels, always running, and always comes back home at least once a day because she's forgotten something. This kind of stupid bitch should not have a high life expectancy. I can't believe she still didn't end up in the hospital. I just need a six months break.

Still losing 1500 and in the meanwhile two automated trades were missed, because margin was used up by the unprofitable discretionary trade, while the two discretionary trades are at break-even.

All right, I am going.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

Last edited by Yamato; Feb 1, 2012 at 8:38am.
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Old Feb 1, 2012, 9:17am   #193
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Re: my journal 3

Yamato started this thread All right, I made it to the office. Let's see how NG is doing. I have about an hour before the dip**** roommate shows up.

Here it is:
Henry Hub Natural Gas

Ok, doing the same as when I left:


Now let's see the NQ and YM trades I missed. Wasted 100 dollars of profit on each one of them. Instead of making 200 dollars on those, I am losing 1500 dollars on my trade. Pretty awesome.

All right, I am gonna work for a while. To see if NG gets better, due to the fact that I am not looking at it. I don't want to give it performance anxiety.


One hour later, everything is still there:


The colleague is here, preaching how things should be done.

Damn. I missed over 500 dollars of profit due to the 2 trades I missed.

Let's say it clearly: I am losing over 1500 due to a discretionary trade instead of having made over 500 dollars from the 2 automated trades I missed. Do I suck or what?


Another hour later and I am still losing 1500 dollars.

All the probability calculations, all the studying, all the creativity... years of work... all down the ****ing toilet, because I didn't let the systems work. I challenged probability and I was defeated.

It's like jumping out of the window and hoping to fly. That's what you get by challenging probability. It's almost as bad as challenging force of gravity.

I am very discouraged by seeing my own behavior, which totally contradicts months of reasoning and writing. Years of reasoning and writing. I should have been sorry about this just as much when the discretionary trading produced profit. But back then i didn't realize it. When you win, you don't realize that you're winning the wrong way. And when you lose, you don't realize that you're losing the right way. There could be two people one making money and the other one losing it, and yet the first one might be doing the wrong thing and viceversa.


Going a bit higher, at 2.461 now. Losing about 1400. I am sad.

I've always said that my discretionary trades in the long run are not profitable and blow out my account, and, while I was saying it and writing it, I was placing discretionary trades. And after i said "let's stop", I did it again. And here I am.

I did some statistics at least. I'm going to do one more lesson now:
AP Statistics Tutorial: One-Way Tables for Categorical Data


Whereas in life, winning unfairly might reward you, in trading you get punished for winning unfairly and against the odds. You get punished, because the market is not defeated and is as strong as before, ready to beat you next time. In real life, you win unfairly, by kicking someone in the nuts, or by cheating with ballot fraud, like Bush, and if Gore complains, people tell him "sore loser", and get away with it. Of course Bush shouldn't have a clean conscience afterwards. But with trading, if you go against probability, yes, you could be so lucky as to get away with it, but in the long run this is less and less probable. I don't know even know what are the odds of my discretionary trades - impossible to calculate because it's not automated nor univocal. But I know it blows out my account each and every time, so the probabilities cannot be that good, by a guesstimate.

Loss is nearly 2000 again. By the time I'll get home, one of the two positions might have been closed due to insufficient funds.

What did I do...

You know, google has really turned into crap, like excel and microsoft in general. Now google hijacks your searches:
1) it searches for something else because they think you typed wrong,
2) it tells you the answers before you typed it because they think they already know what you'll type,
3) it shows you a preview of the page because they think you want to know
4) it redirects you to your country, because they think you'll want to search in your native language and so on
5) it lets you change all of the above, but the changes do not stick, because they want you to do it their way

I really suck.

Google sucks.

We all suck.


Losing over 2000. It is starting to give me a heartache. I can't even focus on statistics anymore.


Ok, I barely managed to finish this one:
AP Statistics Tutorial: Exploring Categorical Data

From here on, it should start getting easier and more interesting.


This is the end for one of the two contracts probably:


I am getting into a vengeful mood now.

I remember reading somewhere how, according to some user, this automated approach causes years of "no fun" or something like that. The exact opposite is true. This is what happens with discretionary trading. Tragedy and despair.

Two more hours at the office.

At least I came to the office. It would have been worse to lose all this money and to stay home on top of it. Now I'm gonna check if IB closed my trade.

Not yet. So I guess I can still hope for a few more minutes to recover the whole loss.

I guess someone might have been right. Someone wrote that I don't want to make money. At this point, it is a tempting explanation. Until here I could have said, and reasoned, that I did not know how to make money. But after all these stats, probabilities, and after things working perfectly in the last two weeks, I still went ahead with what I know to have blown my account time after time: discretionary trading. Yes, I thought I would have made money, but I also know this has never worked.

Maybe the two things can go together without being contradictory, since I always want to challenge myself and become better than I was, so I guess I was trying to find a way to be profitable with discretionary trading, and maybe i thought I had found it (by bottom picking on the NG).


I am disgusted and demoralized. Until I get back home, I will put everything away for a few hours: math, journal, checking on prices. There's nothing I can do anyway.

Total defeat, from within, just when everything was going perfectly.


I looked again.

Strange, because I would have thought they'd have closed one contract by now:


By now I must be losing about 3000 dollars from this damn trade.

No wonder... my risk/reward, for every discretionary trade, is 400 if I win, and the whole account if I lose.

Unless there's a huge rise in the next few hours, it's all over for me. Or rather, I've really cut down my probability of succeeding with this small account. Besides, I'll be vengeful and will definitely try to make it all back. And that'll blow out my account for good.

Another hour at the office.

I am past the stage of denial and now I have basically given up on my account. I can't even look at it anymore. I can't look at the trade, nothing. It's all over. I've lost control of the situation completely. That actually was the case the minute I placed the trade.


Despite the state of despair I'm in, I still managed to do some more statistics:
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

Last edited by Yamato; Feb 1, 2012 at 2:41pm.
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Old Feb 1, 2012, 4:00pm   #194
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Joined Mar 2003
Re: my journal 3

Yamato started this thread Back at home. I am going to get drunk now, otherwise I can't sleep.

This thing is still open, I had a margin call warning, but the time period with insufficient funds didn't last long enough for them to close my position.

There was a big rise, but of course from the very low levels it reached today, so I am still very far from break-even.

Now I am losing 2500. I am going to drink my first beer.

I think I have an idea about math. I am going to stop doing so much math at home. The fact that all I do is work, both at the office and at home, may be responsible for my discretionary trading. It could very well be unrelated, but I have to try to find the cause. It could be that, due to working so much, I try to find some sort of escape in discretionary trading. Or that, as I said a few posts back, I try to speed up my profit, because I want to get out of a life where all I do is work.

If instead I relax at home, the need for (compulsive) discretionary trading might decrease. Not that it's frequent, but those two or three trades per month that i place are too much, given that each time it doesn't go my way, the risk is blowing out my account.

So, now I am going to drink beers and find a movie to watch while I try to fall asleep.

I will watch Ironclad:
Watch Ironclad online - download Ironclad - on 1Channel | LetMeWatchThis

Of course every 5 minutes I'll keep checking my fate on TWS.


A big part of the problem is that I've had this deeply ingrained feeling throughout my life of being "special", blessed, destined to success and similar feelings. I guess, despite all the criticism, my father gave me a sense of being special, or maybe it's my reaction to his criticism that gave me a feeling of being special. Whatever it is, I have always felt, irrationally, that things will always go fine in the end for me. And this applies to my trading, too. I feel that I am going to get away with things that other people aren't getting away with. I either feel that I am lucky and blessed, or I strongly want to believe that I am lucky and blessed. Whatever it is... I engage in these behaviours that show that I think probability laws do not apply to me.

I talk about probability, i do my work based on it, and then I act as if I were the son of God or God himself. This doesn't get forgiven by the markets. Probability in the long run screws me over.

I don't know how many times I will have to be defeated by probability to realize that I am not special, I am not blessed and I am not lucky. I don't know if it will ever be enough. Even with the profit brought about by my systems, I feel it's not because of my hard, statistical and probabilistic work, but rather because there's someone up there who likes me.

I either believe it, or I want to live my life believing that someone up there likes me. I want to think I am special, in every area of my life, and maybe everyone else does, too. And I end up paying the price of that delusion.

I keep that delusion alive, because it feels good. And I do so, by downplaying everything that denies it, and only remembering those good things that confirm the delusion. In trading this translates into forgetting losses, and remembering wins. But the account balance remembers everything correctly.

In this sense, trading forces you to translate your subconscious thoughts into math, and you find out that the figures don't add up. That your beliefs don't add up.


Ironclad was crap. This is better:
Watch Just Add Water online free 2008 - download Just Add Water - LetMeWatchThis

Still no margin call.


Another margin warning. Losing 3500 dollars.

Terrible situation, for an unnecessary trade.

In the meanwhile I've lost that 600 from the two missed trades, which makes it even worse.

The child is screaming.

The mother is talking idiot talk to the child.

I am feeling pretty frustrated. I couldn't even sleep despite drinking two beers.

One contract will very likely be closed within minutes.

I was about to say the idiot voice of the mother will be forever impressed in my memory connected to this awful trade, but it's not the case. Things have been this bad before - my journals are full of these situations. I learned nothing from it. I learned that it's beyond my control, and I can't handle it, nor can I remember it. Each time it's like the first time.

One thing I did learn: it doesn't make sense to say "never again", because I've said far too many times.

I'm gonna drink another beer. It's not like I drink all the time. Only twice a month, for emergencies like this one.

I didn't know prices could fall like a stone (three days of falling):


The systems knew it. That's why they are profitable. But I didn't know it. Each time for me, whatever the market, the optical illusions abound and lure me.

Somehow I got lucky and I didn't get kicked out of this trade. There's still two contracts open. It bounced right after the margin warning.

But now it's falling again:


A lot of "if i had only..." keep surfacing in my mind, and I keep discarding them. This mess definitely has to do with my personality. Which side of my personality...

1) feeling special
2) feeling that I'll get away with things others don't get away with
3) feeling smarter
4) ...

If I knew all the causes, it wouldn't have happened.

In this sense, all these idiots daring to post reprimands, berating me on my journal for the same things I admit, are total idiots. Obviously if I knew what's going on, this would not happen. Besides, what is most stupid is that I got berated for the wrong money management in the previous situation, which wasn't even my own responsibility. So those guys I immediately put on my ignore list.

"Discipline" I keep reading everywhere on financial forums. Since reading that word doesn't help, I have to look for the causes elsewhere. Discipline is not an issue. Once you're convinced of something, you just do it out of reasoning: there's no need for discipline to keep you from losing money. All you need is to be convinced of:

1) that you don't want to lose money (I am assuming I am convinced of that)
2) that by trading discretionary you will lose money in the long run (I might have problems with being convinced of that)

For some reason, I keep testing myself, to try and see if I finally became profitable as a discretionary trader.


And I just missed yet another automated entry. Hopefully it will be an unprofitable trade.


The thing is that I keep saying "what an irrational thing I did", but that is only judged with the knowledge of now. You'd say "hey, automation was working, plenty of profit in two weeks, no need... why did you do it?". I didn't say "hey, let's lose 3000 dollars" but "let's make another 400 dollars". Then the lack of planning did the rest. I think if there is one mistake, if there were just one mistake in my mind is the one I mentioned earlier, "feeling special". I felt that I could not lose. And I feel like that each time I place a discretionary trade. I don't have an exit plan, because I am certain that we have reached bottom and that I can't lose. If I didn't feel like that, why would I place a trade? I am the guy who thinks his convictions are right and everyone else thinking otherwise is wrong. In the same way I trade: so I can't be wrong there either. This doesn't hurt in everyday life, but in trading I have to give up my entire account each time I am wrong. And this thing has been happening ever since december 1997, every year since then except for a couple of years when I wasn't trading. Yes, 14 years, like some idiots here remind me occasionally (what do I need an idiot to come on my journal and yell it out loud in capital letters, given that I am the one mentioning it every time?).

Yeah, huge problem, this of discretionary trading. Huge. I can't explain it. I mean I explained it in many ways, but it seems impossible for me to change this feeling of being special and this sensation that I can never be wrong, and that I'm blessed by the gods. Now for example I feel the markets "owe me" and I'll probably act on this, sooner or later.

I don't know how much more beating I need to take to get into my head that I cannot fight probability, that I am not blessed, that I am not special and that I am not always right.

I am always so busy trying to make everything perfect that I deceive myself into thinking that I have achieved that perfection. With my stats, my probability, my program, with my estimates...

I guess one who is not an idiot (like some who posted here in the past) could you make this good objection, and I would allow it maybe, and it is: with all this writing, good writing, reasonable, how come you can't produce a change in your behaviour so to avoid discretionary trading? This would be a good point. I wrote thousands of posts about the problems I have because of discretionary trading, and I cannot stop it. If I could put into fixing this problem the same effort I put into writing these journals, hell I would solve it. So what's stopping me? I am not lacking the energies. Open question.

And what about all the work I did with math, with excel, with tradestation, with software, with hardware, at the office? How can a person be so serious, dedicated and hard-working and yet at the same time make the same mistake year after year for 14 years?

There's one guy who said that I don't want to make money, as I mentioned in one of my previous posts. Maybe I'd rather... I prefer the feeling of being special at the cost of losing than the feeling of making money by trading normally and in a boring way.

Certainly I won't solve it unless I change something, because a blown account every once in a while has never solved this problem I have, and for sure it is a problem I have in my mind and nowhere else, and it is not the same problem everyone else has. Yes, sure, similar to the problem others have, but not of the same exact nature.

This is probably closer to compulsive gambling. Many traders lose not because they want to lose, or because they are affected by compulsive gambling, but simply because they haven't figured out a profitable methodology, and I thought I was in this group of people. But now I don't think I am anymore. I have two methods, one that wins (automated) and one that loses (and blows out the account), and I keep using both. Yes, sure I think i will win with both, but I also know my stats, and it's clear that I do not win with discretionary trading.

Open again, another open question. A lot of open questions.

I don't have a problem with addictions, but with urges. I can't resist urges, but I don't get addicted to stuff, like drugs, drinking, smoking and not even to gambling. But occasionally there will an urge to make some extra money, which will blow out my account.

Very complex. And no bull**** psychiatrist can solve this.


There's also the very important factor, that others don't have, of not being social, and that I just work all the time. So I never relax, never have fun, never see what other people are doing/thinking (people, that I generally consider stupid), and so I obviously obsess about things, and tend to bring everything to a deeper dimension, which is both good and bad. Free time is good, and work produces results. But when you're unbalanced and not relaxed, and you have in front of you a trading platform that can make the difference, and make you quit your job earlier... then things go wrong: unbalance + desire to quit job + trading platform = blowing out account.

Mental unbalance leads to low balance in the account.

I am almost done with writing, also considering that it never fixed this problem.

A few more lines, a few more sips, and I'll stop writing for the day.

I did keep my promise of not doing any math for the day.


What the **** did I learn from this lesson? Nothing. Nothing at all.

Something, but not enough. I don't even know what I learned.

And I don't know if I'll remember it. The past shows... that I just learned something I had already learned but had forgotten.

Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

Last edited by Yamato; Feb 1, 2012 at 11:10pm.
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Old Feb 1, 2012, 11:12pm   #195
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Re: my journal 3

Yamato started this thread That post ended so nicely with that song that I have to start another one, so I don't ruin the ending of the previous one. I feel like writing some more.

The trade is still open. No margin call yet. The future is still trading right now, and I am drinking my fourth beer.

I was wondering: do i like this feeling, this thrill of an open trade? No, I don't think that's what lead me to make that trade. I just wanted to make some extra money. The 3000 I am losing were not part of the plan. Not being able to sleep at night because of it was not part of the plan. Scratching my head, drinking beers was not part of the plan.

Of course if the support holds, then I might break even after all. Provided that I'll wait until it reaches my takeprofit. What are the chances of that? No idea. But I am betting everything on it, given that unless there's a margin call kicking me out of my positions, I obviously cannot exit them.

Ok, it's 23.15 CET and the future closed for 45 minutes. This buys me 45 minutes of hope. In the meanwhile, hopefully, the forces of evil will cease to make NG fall, and the forces of good will prevail.

I guess I could go to sleep in these 45 minutes. What will be will be.

What will be, will be.


Could it be that... I don't feel entitled to success and money? Could it be that I feel uncomfortable with money? Could it be that I prefer my life to stay the same and I am afraid of change even if it's a change that apparently is better?

I wonder. I wonder what it is. It could be one of the reasons I mentioned in the past few hours. It could be a mixture. Or it could be some reason I didn't mention.

Could it be that I enjoy complaining and I am addicted to having problems to solve and something to complain about?

Could it be that I am afraid of a life without problems because it makes me feel guilty? Could it be that I am afraid of all those "friends" I have, who - i know - will come and ask me for money?

What is it that makes me place these discretionary trades that have a risk of "blowing out" and a reward of 400 dollars?

What is it that makes me scratch my head, when I feel it will make me lose my hair? What is that makes me go to bed late at night? There's not much else I do to hurt myself knowingly.

What do these things have in common?

What? Why? Who? How long? Questions, questions, questions.

Ok. For example now it's the time I should go to sleep. But I ain't doing it. Why? I said sleeping is good - why am I not trying to sleep now?

Let's analyze this.

I feel bored. Restless. I want to feel alive, awake... I want to stay up. It is an irresistible urge. The same applies to trading and the same applies to scratching my head. It's one of those few behaviours that make me say "**** it" just before I do it. I know it's bad, but I just want to do it. It's these three things:

1) staying up
2) scratching my head
3) placing random discretionary trades

I say "**** it" and i do it. I think if I had a gun, I'd say "**** it" and shoot myself.

This is the type of thing I am afraid of. There's just some self-destructive behaviours that you can't control. Some have eating, some have smoking. And I have this compulsive behaviours of scratching, staying up and trading. And maybe, I am afraid, killing myself. ****, ****, ****.


The killing myself is obviously bull****. The sleeping and the scratching are almost "ok", almost I could let them be at the moment.

But I wish I could get rid of the goddamn mother****ing trading. But I can't. It just keeps coming back. I am on the platform, and, compulsively, the urge to place a trade comes to me.

The only method that worked was with the investors. I stayed on their account for a year and a half without placing a single discretionary trade. I was tempted a couple of times, but I never did it. They would not have let me. It worked. I can refrain from it if I really can't do it. If instead it is my own account, then it's "**** it" behaviour.

I am not going to try hypnosis, but that is the type of thing that people do for smoking. But there's no way that type of thing is going to work on me. Being a control freak, I'd try to hypnotize the hypnotist.

****, **** and **** again.

Just when everything was going perfectly.

Just what the **** is the matter with me?

For a while it was ok, and I felt great about everything I was doing, but at this point I am tired of being myself. I am causing my own problems. I am at the office because I made myself stay there.

If i had saved and behaved properly, I'd be retired now.

I am officially tired of being myself in my situation.

I just get all the disadvantages of hard work without the advantages.

I am intelligent, I am a hard worker, I have created profitable trading systems, and then why do I keep on hurting myself? Why do I keep on doing this?

Ok, until 2008, I did not have a profitable method. In 2008, the systems made money, but I didn't have money management, so you could argue I lost because of that. Then I kept doing compulsive trading for years, even after having profitable systems. Now I have the systems, i have the money management, I have everything, and until recently i even had a decent capital. What the **** is the matter with me?

I did know it would lead me to blowing out the account. I said repeatedly. Here, too:

I am tired of being myself. I am tired, I am tired, I am tired.

In the meanwhile the NG opened again, and it's going ok. I still haven't been kicked out of my trade. Awesome, so to speak. Of course I could be out of this trade, and could have made 600 from two discretionary trades I missed because of this trade, but for now I am happy with not being kicked out of the trade at the bottom.

For now I am happy that I am losing 3095.


I was losing 3600 dollars because of some downward spike.

IB might pick that up and kick me out now.


Not yet. It recovered.

The child is crying again. Yelling for his mom. Four years old or so, and he's still screaming like a six-months old. At his age I was better.

Losing 3095 again.

I am like ray liotta at the end of goodfellas, when he's sweating.

Maybe I feel that if I succeeded I'd have to stop being myself. I'd have to stop complaining, I'd have to stop posting here... maybe I feel that I would stop being myself.

But at this point, I definitely want to stop being a wiseguy. I want to be in the witness protection program. I want to be an average nobody... get to live the rest of my life like a schnook:

Losing 2900. I'll drink one last beer and then most likely I'll go to sleep. Tomorrow morning I have to help my friend spy on his cheating wife. Another session of consulting for the keylogger i gave him.

Losing 2875.


I might pull this off. If I do, will i stop doing this crap? Who the **** know. I am like Christopher Walken in the Deer Hunter. He keeps on playing russian roulette even when he doesn't need to to anymore.

They get out of that jail camp, and he keeps on playing it. And then he dies. This is what's going to happen to my account, because what I do play is russian roulette, given that I have no stoploss. Will this trade be the one with the bullet?

Don't watch this if you haven't seen the movie yet.

Losing 2735.


I am going to get that beer now.



And what the **** was all this suffering for? At best, I will just break even.

Maybe there's hope for me. It definitely happened because i stayed up and monitored it. You see, magical thinking again.

If it turns out ok, I'll forget all about this. If it doesn't, I'll forget about it just the same.

It sucks. There's no hope for me, regardless of how this trade goes.


**** this. I am going to bed without even drinking that beer.

Tomorrow it's thursday. I suck, I suck, I suck. Come on, god. I just need a big big rise for the NG. Just do this for me, if you're listening.

You know, since this journal is not selling anything, like some dick (and idiot) claimed on some thread, I try to put all the truth I can into it. That's what a journal is for. I enjoy writing for the sake of writing, in case there's some retards who still haven't understood that.

Oh, and I forgot, among the few things I can't control (sleeping, scratching head, trading) there's a little bit of compulsive eating lately. There used to be none of this, but now it's been increasing. If there's food in the refrigerator, I eat it. Yes, but that's for cigarettes, too, but it's not an addiction because I don't buy them, nor do I buy unhealthy food. So I would not call these addictions.

Anyway, going to bed now. Definitely.

And let's hope to not wake up and find one of the two contracts closed due to lack of margin.

And one more thing, once again: I don't think I learned anything from this lesson. It's going to happen again and again. I've been feeling like this before, and, regardless of how the trade ended, I engaged again in compulsive gambling. I don't know what's going to solve it. Whether it's maturity, whether it's age, whether it's something drastic, not drastic like blowing out the account, because that's not enough. It would be something like some relative dying, or me going to the hospital. Some life-changing experience. I still feel like a child in many ways, and am immature. When I'll really feel like a complete adult, this type of behaviour might stop. I would say it belongs to the category of spoiled-irresponsible behaviours. If someone says this, I'll put them on my ignore list. I can say it. I don't want any superficial dicks to come here and berate me, saying stuff I've already said.
Read: E.P. Chan, Cogneau - Hubner, Sewell, Tverberg. Search: expected shortfall, Monte Carlo VaR, extreme value theory. Trade.

Last edited by Yamato; Feb 2, 2012 at 12:55am.
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