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Your Trading Sucks!

WELL, MAYBE NOT completely. But if you feel like there is something holding you back in the markets, that something may be you!

There isn’t a profitable trader who hasn’t struggled with their own mindset.

Click here to see who Louise Bedford has teamed up with to bring you the solutions you’re looking for.

You’ll discover:

  • How to bounce back when the going gets tough
  • What it takes to perform at your peak and keep on performing
  • How to overcome your fears and experience ‘flow’ with the markets

ATTENTION! The initial demand for this pack has been huge! We only have 13 8 left at this special price. Get in quick.

Warning!  This is only for those who wish to excel as a trader during good times and bad. It is not about making a quick buck in the markets, only to decimate your account the week after.

If that’s the type of info you’re after, you’re in the wrong place.

But if you’re genuinely interested in developing your full potential so you can trade for a living, while preserving your connection with those around you, then we’re going to have some fun.

To read more, just click here

Why We Do Dumb or Irrational Things: 10 Brilliant Social Psychology Experiments

“I have been primarily interested in how and why ordinary people do unusual things, things that seem alien to their natures. Why do good people sometimes act evil? Why do smart people sometimes do dumb or irrational things?” –Philip Zimbardo

Like eminent social psychologist Professor Philip Zimbardo (author of The Lucifer Effect: Understanding How Good People Turn Evil), I’m also obsessed with why we do dumb or irrational things. The answer quite often is because of other people – something social psychologists have comprehensively shown.

More here – PsyBlog

The Washington Ballet’s hardest dance moves

Many many years ago when I was heavily involved in the martial arts (think two training sessions a day punctuated by afternoon naps in the uni library) I used to go out with a girl who was at the Victoria Collage of the Arts as a dance student. Occasionally I would go and stretch with them and two things always struck me. They were like the walking wounded in some instances they were more battered than I was and my sport revolved around being belted and they had extraordinary athleticism.
 

 
 

Barclays Manipulated Gold as Soon as It Stopped Manipulating Libor

And still no one is in prison….

If you were writing a paranoidfantasyof gold price manipulation you’d be hard pressed to come up with something more on the nose than the U.K. Financial Conduct Authority’s order against Barclays. It has everything; it is the benchmark of manipulation by which all future manipulation will be measured. Well, this or Libor. Delightfully, this manipulation occurred on June 28, 2012, the day after Barclays was fined 290 million pounds for manipulating Libor. They just really wanted to perfect their manipulating technique.1

And oh did they! For starters, they manipulated the most manipulable thing imaginable: Digital options. Former Barclays precious-metals exotics trader Daniel Plunkett, who also settled with the FCA (for a £95,600 fine and an industry ban), sold a customer a digital option that would pay $3.9 million if the 3 p.m. London gold fix on June 28, 2012, was above $1,558.96, and zero if it was at or below that barrier.2 So right there the temptation is obvious: If you’re around the barrier, you can save $3.9 million by pushing prices down just a little bit.3 As it happens, the gold price on June 28 was just above the barrier, so a bit of selling by Plunkett could move his client out of the money and make him a bunch of money.

More here – Bloomberg View

 

Jaguar F-Type Coupe R

 
 

Vix Again

Screen Shot 2014-05-26 at 10.48.16 am

I came across this chart over the weekend. It looks at the volatility of stock, bond and currencies markets. The article that accompanies it falls into a trap I have commented on before namely, that volatility and changes in volatility are predictive. My view is that they are post-dictive – that is they react after the event. If you are lucky they are concurrent with an event. This is not rocket science once you understand how the VIX is constructed. The VIX is the implied volatility of S&P500 options, if you take the options pricing equation and solve for volatility you get the implied volatility of the option. This is the volatility that is implied by the current option price.  If you look at option pricing there are five inputs of which three could be considered prime drivers.

These drivers are the price of the underlying, time to expiry and volatility. Everyone is familiar with the price of the underlying and time to expiry. options are a wasting asset, once they are gone they are gone. However, volatility is a difficult for traders to grasp and therefore it is difficult for them to grasp the implications of changes in volatility on an assets price. Part of the difficulty with volatility is that it is not directly observable – it has to be measured some way and this measurement has to be interpreted.

Once the underlying asset begins to swing in value then option market makers will demand greater compensation for the risks they are incurring in offering options for trade. The article offers up the idea that complacency is a bad thing and that there  are a host of macro economic reasons as to why this might be so. To my way of thinking a measure of the market is neither good nor bad – it is simply a number or a series of numbers represented on a chart.  Complacency is neither bad nor good – it is simply the state of the market.

The other point I take some issue with is that periods of low volatility are naturally followed by periods of high volatility and this implies a crash. Volatility will mean revert – that is it will swing around a mean value. this is why option traders use volatility to determine whether an option is poorly priced and attempt to take advantage of it. The relationship between volatility and an options price is linear, so if volatility doubles the price of the option should double. Low volatility does not imply that a crash is coming, it simply means  that traders see no reason to move their pricing matrices to a new point.

The central issue is whether volatility is in some way predictive of the future to which my answer would be no. a predictive tool is one that moves before a change in asset prices not concurrent with or after and asset price moves. It should be remembered that option traders have no special super psychic ability – they no more have any idea of the future than any once else does. As such they are reactive entities – they are not imbued with any ability that any other trader who is perceptive and disciplined doesn’t possess.

 

Iran Executes Billionaire Guilty of $2 Billion Scam: Banker Put to Death for Fraud

I can see this catching on.

According to the report, the billionaire businessman managed to swindle the state out of $2.6 billion, in a scam that began back in 2007. The execution happened suddenly, without giving Khosravi any notice, according to his attorney, Gholam Ali Riahi.

More here – Latin Post

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