my journal 3

This is a discussion on my journal 3 within the Trading Journals forums, part of the Reception category; Yes, thanks for the detailed feedback and good luck to you, too. You've got a point when you talk about ...

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Old Feb 10, 2012, 7:45am   #231
 
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Re: my journal 3

travis started this thread Yes, thanks for the detailed feedback and good luck to you, too.

You've got a point when you talk about the concepts of "stress reliever" and "rare call option trade with a futures contract".

In the first case, I hope to use math exercises both as a stress reliever and something that will benefit me (I need to practice math, for my trading).

In the second case, this trade first of all has the purpose of keeping my mind busy, so I don't do anything else dangerous such as other reckless discretionary trades. From this point of view, even if it stayed low forever, and i made nothing, it would serve its purpose.

Furthermore, the concept of "option and future" gives the right idea, because this trade combines the advantages of futures (no time decay) with the advantages of options (limited loss). And yes, I also do think that it's a rare occasion, as I said in previous posts.
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Old Feb 10, 2012, 8:59am   #232
 
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I'm still here

travis started this thread Today will be the end of my first month of automated trading and I am still here, without having blown out my account, and with a lot of profit actually. I've seen at first two very profitable weeks, then two slightly unprofitable weeks (automated-wise), but I am still here, and so let's celebrate with a song.

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Old Feb 10, 2012, 10:08pm   #233
 
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Re: my journal 3

travis started this thread Weekly update is coming up. I did some statistics today, too:
AP Statistics Tutorial: Probability Distributions

It's getting tougher and tougher, but more interesting, too. Here's the last thing I read, which is almost "fascinating":
Quote:
Note: With a continuous distribution, there are an infinite number of values between any two data points. As a result, the probability that a continuous random variable will assume a particular value is always zero.
What is the probability that I will make exactly 1% on my next trade? Zero percent. Because % profit is a continuous distribution (not the same for absolute profit, because of ticks and fixed commissions, and because of cents, too - indeed money does not have a continuous distribution).

You know, the week is closing and I don't think I've made a single profitable trade this week. But they were all small losses. The beauty of automated trading. With my discretionary trading, I never would have been able to keep five losses all small. Even just one of them. It would have been just one huge loss, or no losses. Each loss to me, in discretionary trading mode, is a matter of life and death. Pride, and all that.
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Old Feb 10, 2012, 10:31pm   #234
 
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weekly update

travis started this thread Yup, I did lose 1000 dollars relative to last Friday.

snap1.jpg

It was ok. I suppose this is close to the worst blow I could expect and take: two losing weeks in a row, and a combined loss of over 3000. Luckily I started two weeks earlier. Otherwise now I would have gone from a capital of 4000 to... blowing out.

Of course, the previous week I did not lose 2000 because the CL_ID_05 was not enabled yet, and because I placed a discretionary trade that kept my margin used up and did not let the automated trades cause me losses, while it brought me a profit (after a nightmare that lasted two days, cfr. previous posts).

Ok, I guess I am done. I am hoping for some profit next week.

This is the way the equity line looks for the forward-tested period:

snap2.jpg

Now let's hope it doesn't start going down just when I trade it.

I can take another week like this, and even two of them, and more... but let's hope it doesn't happen.

But, most of all, let's celebrate once again the fact that today I close a whole month of trading without blowing out the account. Yes, I am still here.



Happiness in Khabarovsky: I'm still here

Quote:
I'm still here, I don't scare
I don't fear, don't even fear ****ing fear
I never crack, never, I don't give, never
I live forever, I'm the one that God...

I'm still real, I won't kneel
Unless it's God, my team know how I feel
I never sould out, never, my good soul, never
I live forever, I'm the one that God's chosen

I heard the call, alarms sounding off
Feeling guilty 'cause my night was spent ****ing off
History perverted me, words can never harm me
Saying I'm the epitome of a ****ing rap self-parody

A charity's being formed for this deformity
This man can't conform for nobody
I made it here despite the efforts of a few
What can I say to a punk but "**** you"?

I must confess, I'm preposterous at best
A pretentious mess, can't even get himself even dressed
In response I don't get mad, I shake you off
Waving goodbye like I was last year's fad

Trend-setting, on you I won't be betting
I let it go so long as you know that I'm stormy weather
And whether or not you're better or not
Couldn't make a lick of difference from where I'm sitting at the top

I'm still here, through these years
I don't scare, don't even fear ****ing fear
I never crack, never, I don't give, never
I'll throw it down, you can bet on that, fella

I'm still real, I won't kneel
Unless it's God, my team know how I feel
I never sould out, never, my good soul, never
I live forever, I'm the one that God's chosen, bitch

Long-winded letters that I've written
Once a snake has bitten, I'll forgive but won't forget it
Not talking revenge, I don't have the time to do to you
All the ****ed-up things, fantasies of ruining you

Ain't got a crew, but I'll take on yours
Gotta wrap this **** up with you, 'cause I'm so ****ing bored
Just this one thing I gotta say
To let you know, to get it off my chest
Before this long rest

I never betrayed you,
I never did what you thought I did
Still you came at me swinging, kid
Nevertheless I wish you the best and pray you get to Heaven
But more than likely you'll be burning with the Devil

Here through these years
I don't fear, don't even fear ****ing fear
I never crack, never, I don't give, never
I throw it down, you can bet on that, fella

I'm still real, I won't kneel
Unless it's God, my team know how I feel
I never sold out, never, my good soul, never
I live forever, I'm the one that God's chosen, bitch.

...dude, what's your ****ing problem?
Watch I'm Still Here online - on 1Channel | LetMeWatchThis
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Last edited by travis; Feb 11, 2012 at 2:26pm.
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Old Feb 11, 2012, 3:15pm   #235
 
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problems with stat trek tutorial: fatigue, lack of understanding, boredom

travis started this thread After 4 months of non-stop math exercises (with an estimated total of about 10,000 problems solved: over 6000 just at khan academy), I managed to go over everything that I covered up to the end of highschool and managed to do it ten times better, and increase my knowledge in just about every area.

And I increased my confidence, which is just as important, because now when I see a formula I do not shy away from it. This changed attitude will enable further learning.

Studying probability, even before using it to read portfolio theory, has already greatly affected my portfolio decisions, with great benefits.

This was just great, and I am really satisfied with all this.

And I did all this to try and cover all the areas that will be needed in portfolio theory, so I'll finally be able to tackle a portfolio theory book, by Ralph Vince or by others. But now I have this big problem of finishing the stat trek tutorial, which is very heavy, and never seems to end. I have a decent understanding of the material up to half of it:
AP Statistics Tutorial: Attributes of Random Variables

It's going to be very challenging to finish it. I will just focus on it from now on, because it's the only thing I have left to read (according to my estimates) before being able to tackle a portfolio theory book.

This doesn't mean that I know everything I've covered by heart, and for example, in probability theory, there's much more I'd like to understand. But even in those areas where I have gaps, I know where to find those things I'll be missing, because I have a good understanding of the framework and overall structure.

So, I am saying that yes, I am satisfied with what i've done so far, but also that I am quite tired and discouraged by how boring and long this AP statistics tutorial is being. A lot of notions, memorization, formulas, and just a tiny bit of interesting insights.



[...]

The big issue of learning and understanding vs. memorizing consists of this: you're not reinventing the wheel and you can't do it. You're forced to somehow go faster than if you were reinventing the wheel, which would be the ideal way of proceeding, because you do not have 10 thousand years availabe to go into depth regarding everything. You can't say "hey, trigonometry is not clear, so I'm going to spend another 5 years on it, and i am going to tackle it from all points of view". It's just impossible, at least with the limited intelligence I have, to cover everything you need and understand it thoroughly. So in me there's a continuous fight between wanting to thoroughly understand something and wanting to move forward to cover what I need to cover. It's very frustrating and it's the cause why I was always a bad student, in that I wanted to stop on subjects (in every area) much longer than teachers would let me.

Only in this sense, I could say that school is useful (in every other aspect it sucks). It is useful inasmuch as it forces you to focus on quantity rather than quality. Because too much quality (and perfectionism) also damages quality itself (the more you cover, the more you'll understand something that previously you did not understand). School makes you understand from an early age that you just need to keep going forward, at a given pace. And I was always a rebel and refused this from an early age, so I mostly disliked school and school mostly disliked me. But now I am realizing that I need this ingredient of school (pace) and I am making myself be superficial and refraining from getting too deep into subjects and questions that arise along the way. You just cannot answer all those questions, or you won't be able to move forward as fast as you need, to accomplish what you need to accomplish.

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Old Feb 11, 2012, 9:24pm   #236
 
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Re: my journal 3

travis started this thread Holy cow, somehow i managed to pull through this boring lesson:
AP Statistics Tutorial: Attributes of Random Variables

The mother ****ing idiot 3-year-old child of the neighbours keeps running around his house, and all I hear is his ****ing little feet hitting the floor. He does this every day. May he be struck by lightning along with his whole family. I want them to disappear from the earth. Mother ****ing idiots.

Quote:
This pittering, pattering, beating and spattering drives me mad!


No, I'll pump up the volume and play some warren g, let's see if they get the message. Animals. Idiots. ****ing morons.

...

Ok, it worked. Just 5 minutes of pretty loud warren g and some red hot chili peppers was enough to get the message through to the moron family. And the child is not running around any longer.

Then I suddenly stop playing it, to show them why I was playing it. I am not good at ringing on people's door and teaching them good manners, so I have to resort to these methods.

Dogs and idiot children are the same. You either take them outside to vent out their animal nature, or be prepared to some sort of complaints from the neighbours.

What the ****, man: you can't expect the neighbours to be ok with hearing your child running back and forth in the house as if he were at the track. If you do that, I'll play music as if I were at a dance club.

Of course these methods work because these neighbours are idiots but not gangsters. If they were gangsters I would have to change neighbourhood or put up with it. Otherwise this would probably cause an escalation in violence, and pretty soon i would lose. I must always make sure to be around civilized idiots at least. Best to be around civilized intelligent people, but it's never good to be around real human animals.

[...]

Now they're doing the childish stupid talk. The bitch and her son.

I am done with that AP Stats lesson, and I have 34 lessons to go, starting from this one:
AP Statistics: Combinations of Random Variables

I have about the same number of lessons behind me, but that's not too comforting, because it was very tiring.

I could do 2 lessons per day, which would mean that in about 3 weeks I could be done with everything. That is many boring days ahead of me... many boring days. The sooner I start, the better. Let's tackle this awful task, one line at a time.

I'm gonna quote it here. It makes it easier to do it. I quote as i go along. That's why I am keeping a journal to begin with. I show people my work, I show that I am working... it's like study hall. And i get help occasionally. But most of all, it's the feeling of working while someone (the reader) is checking on me. That's one of the biggest benefits from this journal.

Another benefit is people's feedback, but not the idiots, who just discourage me for no reason and without even knowing enough about me. That's why I had to enable the "only posts from contacts" option. I still feel observed and watched while I study, but I don't get bothered while I study.

So let's do that quoting of the lesson, so I can study out loud on the journal.

Quote:
Sometimes, it is necessary to add or subtract random variables. When this occurs, it is useful to know the mean and variance of the result...
Not too clear, but i will move ahead, because in this case quantity produces quality and speeds up the learning. Reading more makes it easier to understand what you've already read.

Quote:
Suppose you have two variables: X with a mean of μx and Y with a mean of μy. Then, the mean of the sum of these variables μx+y and the mean of the difference between these variables μx-y are given by the following equations.

μx+y = μx + μy and μx-y = μx - μy
Still not clear.

Quote:
Independence of Random Variables

If two random variables, X and Y, are independent, they satisfy the following conditions.

P(x|y) = P(x), for all values of X and Y.
P(x ∩ y) = P(x) * P(y), for all values of X and Y.

The above conditions are equivalent. If either one is met, the other condition also met; and X and Y are independent. If either condition is not met, X and Y are dependent.

Note: If X and Y are independent, then the correlation between X and Y is equal to zero.
This is clear, but only because I had understood it from another tutorial, from other tutorials. This is the problem with this tutorial and why it's so boring: it just lists a bunch of notions, rarely taking the time to explain anything. This is so and so, and if you don't understand it, too bad for you - just memorize it. That's what it seems to be telling me.

And I am afraid that I have another 34 pages of dense notions ahead of me. But this is better than nothing. I did not find anything better.

In the meanwhile, I am watching this:
Watch The Rose Tattoo online - on 1Channel | LetMeWatchThis
The Rose Tattoo 1955 - Stagevu: Your View
The Rose Tattoo quotes

Let's keep going with AP Stats:
Quote:
Sums and Differences of Random Variables: Effect on Variance

Suppose X and Y are independent random variables. Then, the variance of (X + Y) and the variance of (X - Y) are described by the following equations

Var(X + Y) = Var(X - Y) = Var(X) + Var(Y)

where Var(X + Y) is the variance of the sum of X and Y, Var(X - Y) is the variance of the difference between X and Y, Var(X) is the variance of X, and Var(Y) is the variance of Y.

Note: The standard deviation (SD) is always equal to the square root of the variance (Var). Thus,

SD(X + Y) = sqrt[ Var(X + Y) ] and SD(X - Y) = sqrt[ Var(X - Y) ]
Again I don't understand it, but probably I'll understand it by doing the exercises, and I will manage to finish it today.

[...]

Nope. I did not understand it this time. Probably the thing that i understood worst in the last 4 months of math. But this is mostly because they make no effort to explain anything, and take for granted that someone must have explained it to me before. But nonetheless I have to move forward, because right now it is not advantageous in terms of cost/benefit to stop here and to dwell on this.

Despite my perfectionistic nature, the best thing to do is to be superficial and move on to the next lesson:
http://stattrek.com/AP-Statistics-3/...px?Tutorial=AP

Speed, and quantity, rather than quality. Yes, I must move on. The two things that matter and that are required are these:
1) I tried with a reasonable effort to understand it.
2) I am not quitting out of a fear of formulas and thinking to myself "I'll never figure this crap out".

As long as these two conditions hold true, I can move on and quit some topic I haven't understood.

Furthermore, I know the nature of this tutorial: it doesn't explain things, but just goes through notions after notions, and it's not like I will be missing some foundations that will keep me from going forward - provided that this failed lesson doesn't destroy my confidence, in which case my understanding would be decreased by insecurity, like in a self-fulfilling prophecy (you lose confidence, and then you don't understand it because you're afraid of not understanding it, and give up too quickly - a problem which i've had with math formulas until recently).

[...]

Oh, and The Rose Tattoo, despite the talents involved, kind of sucks. I mean, out of respect for the talents and legends involved, I should say "i didn't like it", but let's face it - if it had come out today at the movie theaters, I would say "it sucks". And yet Anna Magnani won the oscar for it.
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Old Feb 12, 2012, 12:33pm   #237
 
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Re: my journal 3

travis started this thread Nice archive of .pdf textbooks on all scientific subjects:
CK12.ORG - FlexBooks

Today Khan mentioned that website in a new exercise he created on the empirical rule:
Empirical rule | Khan Academy

Here's the wikipedia entry for the empirical rule (also known as 68-95-99.7 rule):
68-95-99.7 rule - Wikipedia, the free encyclopedia

And he did it again, on his 300th exercise he got me to quickly understand yet another thing that seemed complex to me: the normal distribution. Thanks, khan. I khan do it. Yes, we khan.



unsolved mysteries

Having said that khan is good at explaining things, and among them, normal distribution, there are still some things bothering me with regard to variance, standard deviation - which are the basis for normal distribution.

Variance of some numbers is the average of the squared deviations of those numbers from the mean. And this is clear.

Now, the standard deviation is the square root of variance. So standard deviation is the square root of... the average of the squared deviations. Now: since with standard deviation we take the square root, could we not cross out that "squared" and simply say that the standard deviation is the "average deviation"? Nope, because we are taking the square root of the average of the squared deviations, and not the square root of those individual squared deviations.

If we did that, we would come up with the average absolute deviation. And this is my first argument: it's much better to use the average absolute deviation instead of getting into this messy formula.

Indeed, the standard deviation and the average absolute deviation produce very similar values, and yet the first one is over-complex, whereas the second one is straight-forward:

1) standard deviation:
You take the deviations, you square them, you compute their average (variance). Then you take the square root of that value (standard deviation).

2) average absolute deviation:
You take the absolute deviations, you compute their average.

What gets skipped is the squaring and the square root, and why were these added? To get rid of the plus and minus values. What for? You can simply take the absolute distance from the mean, without this useless garbage.

Actually the recipe's ingredients are the same, but they get mixed in a different order - I'd dare call it "disorder". Indeed, the absolute value is nothing but doing the square and taking the square root, so the ingredients of standard deviation are the same as the ingredients for average absolute deviation.

Standard deviation: square the deviation, do the average, take the square root.
Average absolute deviation: square the deviation and take the square root (abs.value) and THEN do the average.

Maybe the guy who invented the standard deviation did not know that he could simply use the absolute value? He certainly was one retarded moron, and so were all those sheep who followed him.

Now: the consequence of all this crap is that, as standard deviation became so popular, 150 years of statistics were built on this crap, instead of the more effective average absolute deviation.

I am almost math illiterate but I can understand this much: there's something wrong and fishy in this standard deviation business.

The second mystery and second argument is this: to make matters even worse, these mother ****ers added the different way of calculating the sample variance and standard deviation vs the population variance and standard deviation. And this is crap, too, and it doesn't improve jack ****. It just makes things overcomplex and uselessly, and actually it produces damage to the clarity of someone's work. It's a whole mess, produced by a couple of famous people.



Ok, enough with complaining about these famous assholes making things overcomplex. Now I will try my tests on normal distribution, on an excel sheet, with the help of the rand() function.

[...]

Ok. It works perfectly (only thing: where the chart says "0", it means the value is within 1 standard deviation, and so on):

snap1.jpg

I verified both the normal distribution of average random numbers 0>=n<1, the empirical ruel, and the closeness of average absolute deviation to standard deviation. Cfr. attached file for details:
normal_distribution_experiment.zip

[...]

I've done it with my trades as well. I was curious to see if they had a normal distribution and the results were quite interesting.

snap3.jpg

Their distribution is less "normal" than with random numbers. Of course the bell shape is not perfectly simmetrical, or the systems would not be profitable. I think it is said to be (very slightly) skewed left (more trades to the right of the average profit, which is about 100).

Another interesting thing is that over 80% or results (not 68%) are within one standard deviation.

snap2.jpg

Here's the file with the details:
normal_distribution_of_trades.zip
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Old Feb 12, 2012, 5:46pm   #238
 
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Re: my journal 3

travis started this thread Awesome footage from the Italian Navy on the event of the year:

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Old Feb 12, 2012, 9:32pm   #239
 
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I am a khan academy millionaire!

travis started this thread Oh yes!

snap4.jpg

300 exercises out of 300 solved. With dozens of problems per exercise, which means thousands of problems answered.

And finally I made a million points!

snap5.jpg

I am more proud of this than of my real profit.

snap6.jpg

I am successfully overcoming my math limits and my worst fears and phobias! Yes, yes, yes!!!

And once again, a big thanks to salman khan for his beautiful work of art website!

[...]

Tomorrow I have another week. Let's hope it's a positive one. 33% of being negative, but also, 66% of being positive.



Quote:
...Then, tomorrow was another day
The morning found me miles away
With still a million things to say...
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Old Feb 13, 2012, 1:48pm   #240
 
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Re: my journal 3

travis started this thread Wow, pretty bad. Today, after a whole 7 years at this bank, I was supposed to get an automatic promotion, but I just logged in and I didn't get it. What the hell is going on? I was passed over also for the automatic promotion?

Let's hope to at least make some money from my trading. I need to get some gratification from something.

Dude... I am like the employee with the lowest salary in the entire bank... I make about 1200 euros per month.

That automatic promotion would have gotten an extra 50 euros per month, but it doesn't seem to have gone through. Maybe I am an exception? This makes me laugh. I am not even mad enough to go and inquire about it. I feel it's demeaning.

This should at least motivate me to do my best with my automated trading, and actually it does, and actually that's why I never tried to change it. Not that I don't work hard, but I never worried too much about my career. Of course I also thought I'd be out of here much sooner. It did not happen due to my money management mistakes, but also because I don't have much capital (I am relatively "poor" so to speak), which further encouraged money management mistakes (you try your best to increase your capital, and that makes you blow out your account).



But at least I am moving forward with my AP Stats course. I got here now:
AP Statistics Tutorial: Binomial Distribution

Actually it does motivate me: the reason I am so focused on my trading is that I am so ****ed with my career at the bank. But I never really counted on it. I've always been a failure as far as school, work and social recognition overall. I already know from the start that I will not be appreciated by whoever is the boss or professor. That's a rule. And this generally happens because I don't recognize their authority in any way. And I don't pretend I do. I don't kiss up, and all that. And I don't agree, and I don't pretend I do... you get my point.
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