Edges for Trading and Investing

巴菲特: 妳們全錯了! 散戶和機構不一樣, 應該這樣玩股票, 2年翻倍很容易! - YouTube

股神 #巴菲特 2021年在投资人大会回答投资者提问时说：如果资金规模是一百万美圆，那么他能很轻松的获得超过50%的年收益率，他确认曾经说过类似的话。从他自己做投资的角度，当资金量从10万，到100万，到1000万，到一个亿，再到十亿，预期收益率会逐渐递减，#资金规模 和 #预期收益率 成反比。

Larry Williams on Traders Workshop | 12/19/2023 - YouTube

Idea of short-term trade or entry: daily or weekly bars with almost same open and close prices, open-close range being within 5% of day's high-low range, usually lead to large expansion of open-close range days next day or next week. These factors do not matter: 1. whether open or close is higher or lower; 2. whether open / close price is closer to high or low. A tight open-close relationship means congestion is taking place and a move is about to come. Direction-wise, look for a reversal of expectations, in another words, if the expectation is bullish, then sell; if expectation is bearish, then buy.

• buy entry: add today's close minus today's low to tomorrow's open
• sell entry: add today's high minus today's close to tomorrow's open

At beginning of 2023, #LarryWilliams came up with a forecast of #DJIA for full year 2023 which throughout the year proved to be very valuable to a lot of people and confirmed the message: the market was predictable. Larry came up with the forecast by taking all historical years whose pattern of #DJIA look similar to 2022, then take an aggregate version of their next years' pattern.

According to #LarryWilliams: What really happens when rate rise? Contrary to conventional thought, rising interest rate increases money supply, because of more interest income will be put into the economy.

Traders Workshop | Larry Williams on Seasonality | NinjaTrader and Larry Williams - YouTube

The following are notes and summary of the seminar video with help from summarize.tech

• 00:15:00 In this section of the YouTube video, Larry Williams discusses the use of #seasonality in trading, specifically in the markets for corn and soybean meal. He explains that certain rallies tend to occur at specific times of year, such as in July and September for corn, and October for soybean meal. Corn futures usually get sell off around mid-October.
• 00:20:00 In this section, Larry Williams emphasizes that the dates chosen are not the driving force of a trade, but a tool to help identify potential moves. He also discusses the importance of looking for seasonal magnitude (large draw-up or draw-down) pattern and instead of simply focusing on timing, and acknowledges that the future always varies from the past.
• 00:22:30 when answering question of how geopolitical tensions affect seasonals, Larry distinguished market cycles and seasonality: markets have long-term cyclical almost predestined patterns or waves that they follow, which is just part of the big picture, so cyclical factors of market are not affected by geopolitical events. However when it comes to seasonality things can be accentuated by news and events for example crop yields, energy, food demand may be affected by wars etc. So he advises traders to bifurcate the two driving forces of market.
• 00:25:00 In this section, trader Larry Williams talks about the importance of maintaining a realistic perspective on the potential failure of trades, stating that false or optimistic belief systems can harm traders.
• 00:30:00 in this section, Larry Williams discusses the seasonal pattern of the #LongTermBond market and how it has usually traded year in and year out. He explains that the bond market is typically in a downtrend around the first and second trading day of October, with high accuracy and the potential for significant profits. Williams provides an example of a trade that generated a $22,000 profit based on this pattern. He also talks about the stock market and how it usually follows a similar pattern, with the potential for profits around the 19th trading day of October.
• 00:35:00 In this section of the video, the speaker discusses the use of seasonality in trading #CrudeOil and stocks (#DJIA). They explain how the strategy is to look for seasonal patterns in these markets and identify when they are acting stronger or weaker. The speaker also mentions how crude oil can be a leading indicator for the stock market and how they see the relationship between crude oil and stock prices. Additionally, the speaker discusses the importance of indicators such as the percent-R and on-balance volume when looking at the end of the month, as well as the commitment to trade reports. The speaker also answers questions about other commodities such as silver and gold.
• 00:40:00 In this section, Larry Williams discusses his seasonal approach to the stock market. He explains that there is a good seasonal trend happening around four days before the #PresidentialElection, where stocks tend to strongly rally until the day after the election. While he offers no specific numbers, he suggests that this trend is usually in the range of 85-90%. Williams advises traders to go back and examine their charts to see how this pattern has played out in the past four years and to use that knowledge to inform their future trades. He also talks about the importance of a #PresidentialCycle, emphasizing it is just one of the dominant cycles in the market.

Hedge funds and 13F filings » A reliable indicator? | CARL

How useful are the information you learn from media regarding large fund managers such as George Soros, Warren Buffet etc who recently bought or sold certain stocks? The answer is not very useful. The information are based on SEC filing called 13f. Here are the reasons why 13f filing information is incomplete and can be misleading:

• Since form 13F can be filed as late as 45 days after the end of the quarter, the information therein may be as old as four months.
• Funds are only required to disclose their long positions (which hedge funds often use only for hedging purposes), but not their short positions.

For example, this media article published on 8/11 has a title that Soros loads up on NVDA and dumps Salesforce and Snowflake. First, pay attention to the timing of this 13f release, it was 8/11, the filing covers buy and sell activities in the preceding quarter ended on 6/30, therefore, these activities happened in the past and information disclosed by 13f is at least one and half month old. So the title used current tense instead of past tense is outright wrong.

The Strategy That Made Him $1.1 Million In 12 Months - YouTube

This video covers the #DayTrading strategy #LarryWilliams used to turn $10,000 to over $1,000,000 in a year of day-trading, the name of strategy is called LW Volatility Breakout Strategy. This video covers how this strategy makes buy decision which is summarized below, however the video lacks coverage on how this strategy makes exit decision.

• use 5-minute time-frame chart
• apply #DonchianChannels #indicator to the chart, set length to 96
• The strategy starts buy position when price breaks above upper band of Donchian Channel along with the following confirmation signals
  • LWTI indicator (Larry Williams Large Trade Index), set parameter Period to 25, and Smoothing Period to 20. Buy signal is confirmed when LWTI indicator is green, not red.
  • Volume Moving Average of 30 Periods, this helps identify market has momentum or not. Buy signal is confirmed when 5-minute chart volume bar is green and higher than Volume MA 30 line.

First Episode of Focus On Stocks (updated links!) | Larry Williams (07.19.23)

This video provides overall US stock market roadmap from 2021 to early 2024 as well as roadmap of #DJIA using William True Seasonal Indicator, according to this indicator, #DJIA is projected to peak around early January 2024 and then will go bearish until March 2024.

Best Trading Patterns. Larry Williams Trading Strategy. #larrywilliams #tradingstrategies - YouTube

Need to be selective with chart patterns: most of price activities are random and only represents trend, only a few chart patterns can be successful.

One of trading patterns recommended by Larry Williams: if price moves in a long downtrend and goes sideways in a trading range and drop, but it immediately goes back up and back into that trading range, then it's a buy signal. The reason is that trading range is accumulation phase, the fact that the price broke down and immediately goes back up indicates institutional money are buying, so smart investors want to start buying at that time.

Most Important Trading Report for Commodities Commitment of Traders Report Larry Williams - YouTube

"Commitment of Traders Report" (COT report) published weekly by US government CFTC gives information of institutional buy-sell transactions of commodities, forex, bond and equity futures. To learn more about COT report, please refer this collection of sample market reports by a trader who uses COT report to inform his trading decisions successfully for over 20 years.

Best Trade of the Year. Trading Tips from Larry Williams. #trading #futurestrading #commodity - YouTube

#seasonality stock trade around #thanksgiving is to buy #WMT stock 2-3 days before Thanksgiving and sell it 3-4 days after Thanksgiving, this trade has been profitable in last 36 years

Larry Williams Special - Market Correction is Coming (06.06.23) - YouTube

Below is about 20-year chart of #DJIA and long term (roughly 3.5-year) stock cycles derived from Timing Solution software by #LarryWilliams. The current cycle started with last #cycle low at end of 2022 / early 2023 and expected to reach cycle high around end of 2024 / early 2025 and end at next cycle low around mid-2026.

#indicator of Employment Ratio (#EmploymentRatio - Number Of People Employed By Percentage Of Population) Rate of Change (ROC) is led by stock market by a few months, which means that stock market up and down causes companies to increase or decrease hiring, which makes sense.

Jim Simons Trading Secrets 1.1 MARKOV Process - YouTube

• 04:35 📈 Jim Simons' Medallion fund has consistently delivered impressive returns, proving the effectiveness of quantitative trading strategies.
• 06:09 🔄 Markov process, as used by Simons, involves a random sequence of events where future probabilities depend on the current state, not the past.
• 09:55 📊 Transition matrices can be created from historical data to calculate probabilities for consecutive market moves, aiding in strategy development.
• 14:31 🔄 Strategy example (using approximately 12 years of SPY daily data from Jan 2010 to April 2022): The probability of an up day after five consecutive down days is 66%, leading to a back tested strategy with a 46% return and 5% drawdown.
  • Definition of up day: close price of a day being higher than close price of previous day.
• 17:24 📉 Combining Markov processes with other tools and conditions can enhance trading strategies, as demonstrated in the course's Q5 strategy, inspired by mean-reverting principles.
• 19:59 🧠 Data analysis skills, along with tools like Markov processes, empower traders to derive probabilities, create efficient strategies, and adapt to various market conditions.

A股市场周期性波动探秘

按照A股6.5-8.5年的周期，上次的周期高点是2021年Q1，那么下一次的周期高点将是2027年Q3-2029年Q3

Larry Williams: What I Learned in 2022 & What to Look Out for in 2023 | Trader's Workshop - YouTube

In this 2022 year-end video, #LarryWilliams reviewed his 2022 full-year forecast made in early 2022 and compared that to the US stock market performance, he revealed that his 2022 full-year forecast was an average of 7 years ending with 2: 1952, 1962, 1972 ... 2012, based on 10-year stock market #cycle, first written about as Decennial Pattern by Edgar Lawrence Smith.

Predict The Stock Market With Machine Learning And Python - YouTube

These are my takeaways from video tutorial that uses #Python and Jupyter Notebook to walk through building and evaluating a #ClassificationModel based on historical data to predict daily #SP500 movement direction.

• Ticker for #SP500 is ^GSPC for Python package yfinance
• Train / test data split for time-series data: for time-series data, split data at a certain cut-off date to split to train / test data sets, for example, use 70% of earlier data as training set and the remaining 30% of recent data as test set.
• Use RandomForestClassifier to train this logistic regression model, why?
  • More accurate, less over-fitting: This methodology uses a bunch of individual decision trees on various sub-samples of the dataset and uses averaging to improve the predictive accuracy and control over-fitting
  • Non-linear relationship: this methodology can handle situation when predictor variable and target variable have non-linear relationship
• Parameters used in the tutorial are
  • n_estimators: number of decision trees, the higher this value is the more accurate the model is, however model training is slower.
  • min_sample_split: protect us from over-fitting, the higher this value is the less over-fitting the model is
  • random_state: setting this to same value at each run, will ensure that each run will produce same model
• Target variable is a binary variable that indicates the daily direction of #SP500 price change
• #SP500 up vs down days historical ratio: 53.6% days up vs 46.3% days down using 10-years of data up to May 2022
• Using 2 rounds of predictor variables and compare prediction results using precision_score to evaluate model performance. Mean Squared Error (MSE) is a measure of the average squared difference between the predicted and actual values in a regression problem. Precision, on the other hand, is a metric commonly used in classification problems to measure the accuracy of positive predictions.
  • 1st round: using daily stock price variables of Close Price, Volume, Open, High and Low as predictors, the model's precision_score is 53.5% which is lower than benchmark which is #SP500 historical up-days percentage: 53.6%
  • 2nd round: using 2 sets of derived rolling aggregate variables, each set derived over 5 time-horizons: Closed_Ratio_ = Close Price / rolling average Close Price over and Trend_ = rolling sum of target variable value over , where is 2, 5, 60, 250, 1000 number of trading days. The prediction threshold was also increased from 0.5 to 0.6 to make the model predictions more selective than before. The resulting precision_score increased to 57.4%, slightly higher than benchmark of 53.6%, indicating this set of derived variables have predictive value.

Will There Be A Bear Market? | Larry Williams (02.15.22) - YouTube

In this video, #LarryWilliams correctly predicted US inflation #USCPI will peak by end of Q3 of 2022 using historical #cycle data of US CPI.

#odds of #SP500 or US stock market #corrections from 1971 to 2021

• of 33 corrections from 1971 to 2021, 7 turned into a bear markets, 26 correvctions went to new highs
• That's a 1 in 5 chance of turning into a bear market
• The average correction took 85 days with a median of 63 days
• Correvctions take 190 days to hit a new high from the prior high and 110 days to do so from the correction low.
• A typical bull market correvction results in a -11% pullback

Dan Loeb - Trading Strategy that Made Him Billions | A mini documentary - YouTube

American hedge funder Dan Loeb made his fortune by taking event-driven strategy, take actions upon certain corporate events such as spin-offs, demutualization, bankruptcies etc. He once said:

I don’t like the word ‘instinct’, because it just sounds like a gut thing. I think what we call instinct is really a type of pattern recognition, which comes from experience looking at the companies and industries and situations that work.

如何賺到股市第一桶金？用實戰經驗告訴你一個可行的方法 - YouTube

高风险高回报的适合小额资金（总资金的5%）的策略：在成长股下跌25%或更多的时候，买入长期（2年以上）期权，当股价上涨10%的时候，能上涨30%-40%

How to Game the Trading Game | Larry Williams

Here are what I think most thought-provoking or valuable takeaways from this tutorial, and those are regarding #LarryWilliams' view on how to use #indicator to help trading.

Thought-provoking Takeaway: mechanical traders vs discretionary traders: according to Larry Williams, successful traders he experienced were discretionary, however, this view may be controversial.

Valuable and Thought-provoking Takeaway / Insight on Trend: Why Trend is important? Because it's the basis of profit. What is Trend? What creates or causes Trend? Trend is a function of Time, although this is a simple statement, it has profound insights to the concept of Trend which is critical to investment success. My understanding of this statement can be broken down to the following perspectives

• entry point selection of a trade: the longer you wait, the low point of a bigger trend you capture
• exit point selection of a trade: the longer you wait, the high point of a bigger trend you capture

Valuable Takeaway, the secret of how to use indicators:

• no single indicator or chart can do all the work, a combination of indicators is needed to make good decision
• most indicators are redundant, those really useful indicators each need to serve a different purpose

Purposes of indicators are

• Accumulation
• Trend
• Fundamentals
• Overbought / sold
• Sentiment: Commitment of Traders Report from US government
• Seasonal
• Cycle

False Break Pattern recommended by Larry Williams

False Break pattern is a simple pattern with a solid record of calling short term explosive moves in stocks and commodities.