Merged Silver Over 40.00 / Real and fake prices

[stilicho]

Returns since the OP:

-28% real return. -37% annualised return.

Returns since the OP now:

-24% real. -13% annualised.

http://www.internationalskeptics.com/forums/showpost.php?p=7916707&postcount=582

How many years do I have to keep this up before the metal bugs concede?

 

[trustbutverify]

I predict the OP will miraculously reappear during the next silver accumulation.

 

[Fast Eddie B]

The problem with unpredictable markets is...

...they're so darn unpredictable!

 

[stilicho]

The problem with unpredictable markets is...

...they're so darn unpredictable!

But that's not what the metal bugs claim. They claim that the endless "quantitative easing" is creating untenable inflation and providing a correspondingly endless opportunity for base metal investment. And they're wrong. And they're consistently wrong. And, even in the age of the longest gold bull market in history they cannot equal the return on Greek CDSs.

If I were so consistently wrong (instead of being famous for my more usual occasional wrongitude) then I'd simply give it up and admit defeat.

 

[kevsta]

But that's not what the metal bugs claim. They claim that the endless "quantitative easing" is creating untenable inflation and providing a correspondingly endless opportunity for base metal investment. And they're wrong. And they're consistently wrong.

who is this "they" that you speak of?

negative real interest rates are driving gold, as they have been since 2002.

real interest rates and gold

And, even in the age of the longest gold bull market in history they cannot equal the return on Greek CDSs.

are you really saying what I think you are here? you are comparing the world's oldest and safest wealth storage and transfer system against leveraged derivatives?

the general public should/would be better off buying CDS, to bet against the Greeks defaulting instead of buying some gold? ..

maybe in 2009 when the visionary funds were making their bets.

If I were so consistently wrong (instead of being famous for my more usual occasional wrongitude) then I'd simply give it up and admit defeat.

given your longish absence I was starting to think that is exactly what had happened

 

[Fast Eddie B]

Kevsta,

1) What's your prediction for silver in 2013?

2) I know you were trading, utilizing some program or scheme or TA, for at least part of 2012. I assume you're keeping a spreadsheet of gains/losses on each trade. Would you care to share it with us, with the names of the securities/commodities left out if necessary?

Interested in your rate of return after commissions, gross, and then your estimate on your after-tax rate of return.

3) I think your plan was to do more trading in 2013. Is that still on, and will you keep us apprised of your progress?

In 2 and 3 above, it's important not to omit or "special plead" the losses. Lots of investors do, and it horribly skews their perception of how they're doing.

I'm on your side, but again I urge you to tread cautiously. Lots of cautionary tales from people trying similar things in the past. Be sure to study those and try to avoid their mistakes.

Good luck!

 

[Fast Eddie B]

Oh, and...

...have you read either the aforementioned "Fooled By Randomness" and/or "The Black Swan"?

You really do owe it to yourself to read at least the former - you may see patterns of thought similar to your own and can see how they often play out.

 

[kevsta]

Kevsta,

1) What's your prediction for silver in 2013?

lol, primarily that I will not be trading it, because of my innate longterm bullish bias. I have quite a large amount, and will just be holding it for the forseeable future.

2) I know you were trading, utilizing some program or scheme or TA, for at least part of 2012. I assume you're keeping a spreadsheet of gains/losses on each trade. Would you care to share it with us, with the names of the securities/commodities left out if necessary?

Interested in your rate of return after commissions, gross, and then your estimate on your after-tax rate of return.

there's no point with 2012's, results, as I said above it was a year of learning and experimenting, but with regards to charges / tax this is not nearly as interesting as you think, commissions are either included in the spread, or deducted from the account immediately, so the trade is a straight win or lose number.

and spreadbetting is taxfree for uk nationals so it really is just a straight case of account starting figure, and finishing figure, and it's % up or down.

3) I think your plan was to do more trading in 2013. Is that still on, and will you keep us apprised of your progress?

In 2 and 3 above, it's important not to omit or "special plead" the losses. Lots of investors do, and it horribly skews their perception of how they're doing.

I'm on your side, but again I urge you to tread cautiously. Lots of cautionary tales from people trying similar things in the past. Be sure to study those and try to avoid their mistakes.

Good luck!

yes certainly, and you worry too much. having some skeptical tendencies myself, I promise I am going to find it very difficult to convince myself a negative account balance is a win really

Oh, and...

...have you read either the aforementioned "Fooled By Randomness" and/or "The Black Swan"?

You really do owe it to yourself to read at least the former - you may see patterns of thought similar to your own and can see how they often play out.

no not yet, but I will do when the opportunity arrives. I'm aware of the content and thesis of both books, but actually think there is much less randomness and much more perfection in the markets than most people appreciate.

Once you start to view price action the way market makers do, to trap the maximum volume of people going the wrong way at any one time, recognise their trap moves, and hop on with them for the ride..

so as I said, it's not TA by traditional means, it's understanding how market makers use retail traders using TA to take their money off them..

different thing entirely.

I should elaborate here also, I am moving towards your line of thinking that TA is fundamentally flawed, but for different reasons I think, my reason/s being more along the lines that although it kind of works sometimes, this is how brokers and the industry keep their clients coming, ..while/until they abuse the hell out of them from the other side of the screen.

support / resistance / trend lines etc all hold and work until there is enough money on the other side of them in the form of orders / stops, to go and get, and then TA fails and market makers bank the money.

 

[Fast Eddie B]

...there's no point with 2012's, results, as I said above it was a year of learning and experimenting...

There you go again!

Yes, there's a point. It looks to an outside observer (me) that you are already "forgetting the misses". If you do make money in 2013 it must be considered with the background of how you did in 2012.

Otherwise, we may be back here in a year with you hesitant to post your losses for 2013 since you were still adjusting and learning from your mistakes. Eventually you will have an up year (I hope), but if that's the first time we see results, in a vacuum as it were, it really won't mean anything.

So, how'd you do, all in, last year?

I'll tell you if you tell me!

 

[kevsta]

There you go again!

Yes, there's a point. It looks to an outside observer (me) that you are already "forgetting the misses". If you do make money in 2013 it must be considered with the background of how you did in 2012.

Otherwise, we may be back here in a year with you hesitant to post your losses for 2013 since you were still adjusting and learning from your mistakes. Eventually you will have an up year (I hope), but if that's the first time we see results, in a vacuum as it were, it really won't mean anything.

So, how'd you do, all in, last year?

I'll tell you if you tell me!

ah, ok I see what you're getting at. I'm down about $1050 on the original live account when I pulled back from it in the summer, not exactly life-changing, and especially so when it came out of "profits" from my stack of metals since 09, as in fact does all of my larger expenditure these days, on a rolling basis.

in contrast I have spent nearly 2x more than that getting educated, plus bought a very nice trading computer out of initial profits that then disappeared with further losses later. trading account is a small part of my investment by comparison.

but it's just the cost of education, its obviously not viable to just jump in against the best traders and HFT algos in the world on your own with no clue and work it all out with no guidance. (which exactly describes the first 3 months btw)

and as many new potential traders go live with large amounts of money and completely annihilate themselves all the time, it could definitely have been worse for me had I not known this before starting. put it this way, I spent more money than all of this retraining to be a PT in 2004 and the future potential here is somewhat different, so I'm happy to invest.

as I said, I'm getting a good discount by paying in 2009 money stored in precious metals since then anyway.

with regards 2013 (somewhat irritatingly, given my rapidly changing interests) I've just stumbled into a large contract in my real job, and so am going to have to stay on demo until the back of it is broken and I can focus exclusively on trading. (some days anyway)

technically this is good in a disciplined trading sort of way, as I get another couple of months testing before going back live again.

 

[psionl0]

Net Profit = Value of holdings at Jan 2013 + net proceeds from sales - total spent on purchases - Value of holdings at Jan 2012.

Divide the Net Profit by the value of the holdings last year and multiply by 100 and you will get a percentage.

Go on - give us that percentage so that we can stop guessing. There's no shame in admitting that the percentage was negative. Silver was pretty much a crap shoot last year.

Knowing me, If I was into commodity speculation I would have bought up big at the end of February.

 

[Fast Eddie B]

Thanks psion10.

Saved me some typing while being more concise than I would have been!

kevsta, look for a pm from me later - a deal's a deal.

 

[kevsta]

Net Profit = Value of holdings at Jan 2013 + net proceeds from sales - total spent on purchases - Value of holdings at Jan 2012.

Divide the Net Profit by the value of the holdings last year and multiply by 100 and you will get a percentage.

Go on - give us that percentage so that we can stop guessing. There's no shame in admitting that the percentage was negative. Silver was pretty much a crap shoot last year.

Knowing me, If I was into commodity speculation I would have bought up big at the end of February.

its not about shame, of course it was negative, I said I'm about $1150 down. (which is $100 more than I had in my head until I looked, maybe you are right and im blanking out losses subconsciously lol)

this "+ net proceeds from sales - total spent on purchases -"

you mean the sum of all trades (inc any commission) as a +/- figure right?

there are many hundreds of them, at one point I was averaging 8 or 10 trades a day lol, so you are going to have to make do with a total sum.

is the fact that the account started at one price (total deposit amount) and finished at another (deposit amount minus sum of all trades) not simple enough?

over a year and many hundreds of trades with several deposits in smaller amounts and one large withdrawal, I am sure we could make it infinitely more complicated, however, in essence I funded in a total of $4200 last year, removed $3000 again (PC) and there is $47.97 in it currently from when I stopped trading it late summer.

what on earth are you trying to work out?

$1150 = €879 = £714 which would actually have cost me 714 / 1.70ish (appreciation of gold in GBP 2009-2011/2) = £420GBP

considering what I'm engaging with, that is chump change, I've spent more than that on a good night out more than a few times

this right here though, way too confident right then.

 

[Fast Eddie B]

is the fact that the account started at one price (total deposit amount) and finished at another (deposit amount minus sum of all trades) not simple enough?

I may have missed it, but total account size is important.

$1,000 down in a $10,000 account is a 10% net loss.

$1,000 down in a $2,000 account is a 50% net loss.

Did I miss it?

 

[kevsta]

I may have missed it, but total account size is important.

$1,000 down in a $10,000 account is a 10% net loss.

$1,000 down in a $2,000 account is a 50% net loss.

Did I miss it?

lol, yes, I think maybe you did, $1150 down on a $1200 (net input over the year minus withdrawal) micro account.

so you're specifically looking for the -95.x% figure are you? I see.

if things hadn't turned round so much in the last few weeks I'd have been thoroughly depressed writing that, now its just funny.

 

[psionl0]

ithere are many hundreds of them, at one point I was averaging 8 or 10 trades a day lol, so you are going to have to make do with a total sum.

is the fact that the account started at one price (total deposit amount) and finished at another (deposit amount minus sum of all trades) not simple enough?

I didn't realize that you were doing so many trades. I was under the impression that you were trading over the longer term because you thought that silver was bullish (it probably would have been if the can hadn't been kicked into 2013 ). If you were trading by the hour then you could still lose money even if silver rose spectacularly over the year (and vice versa).

Assuming that you did not add or remove money from the account, your method would be simpler (though I would still prefer to see a percentage).

 

[psionl0]

lol, yes, I think maybe you did, $1150 down on a $1200 (net input over the year minus withdrawal) micro account.

So your account was down to $50 in the end? Maybe you should have claimed to be "following the Muslim Faith".

ETA I missed this bit: "I funded in a total of $4200 last year, removed $3000 again (PC) and there is $47.97". That would make your loss a more reasonable 27%.

 

[kevsta]

I didn't realize that you were doing so many trades. I was under the impression that you were trading over the longer term because you thought that silver was bullish (it probably would have been if the can hadn't been kicked into 2013 ). If you were trading by the hour then you could still lose money even if silver rose spectacularly over the year (and vice versa).

Assuming that you did not add or remove money from the account, your method would be simpler (though I would still prefer to see a percentage).

as I said, at the point I was experimenting, exploring strategies, trying to master my stupid impulses, and had no clue about the games the brokers and market makers play, easy meat for all their traps.

I was taking longer term swing positions and day trading as well in the meantime, win with one hand, give it back on the other. using way too much leverage, incorrect risk rewards, as I said, I made every mistake possible along the way.

that said, I had some spectacular successes too with a few big (heavily over-leveraged in hindsight) wins, enough to further add to the account to upsize bets, and then treat myself to a present out of it when the balance was over 6k. encouraging enough.

then late summer everything went wrong, deviated from the (never very good plan anyway) carried on trading at too high a stake with not enough funds to back, back to square 1 in 2 days again.

I had gone a bit "F 'it, lets just go for it", partly out of frustration of the "so nearly but just out of reach all the time" feeling after a series of losing trades and that it wasn't reliably working.

has also been a fascinating lesson in psychology, I would recommend anyone who wants to discover just how good their emotional control really is, try it with a $200 account lol.

strategy now potentially throws up one or two perfect trades a day, 5 days a week, across 9 or 10 specific currency pairs.

just GBPUSD and EURUSD will usually give at least one good setup a day on average between them. often at the exact same time, or a short lag.

not going to trade gold or silver any more, as I'm permanently long anyway, and with Forex I have zero innate bias.

risk reward is now minimum 2:1 (or you don't take it) and often works out to be 3 or 4 to 1 actual win compared to stop loss size.

In Dec (on demo) I took (only) 9 trades using the new strategy and won 7 (and watched about 20 come and go that I could have taken, but didn't get the perfect entry so didn't take)

Opened a new $1 million demo account on an ECN platform last week but trading it as if its a 100k position size / risk-wise, just one trade last week, up +3.4%

future's so bright I gotta

or "this time its different" we shall see.

 

[Fast Eddie B]

To maybe revive a moribund thread...

...in another thread about "Curves", someone posted a link to this in another forum:

http://youtu.be/xlKWdd_DhW0

Thought it was interesting, is all.

We'll all see it through different eyes, of course, but what I see is how hard it would be to tease out trends from that sort of thing.

Your eyes may vary!

BTW, Kevsta - how's that speculating working out this year so far?

 

[kevsta]

To maybe revive a moribund thread...

...in another thread about "Curves", someone posted a link to this in another forum:

http://youtu.be/xlKWdd_DhW0

Thought it was interesting, is all.

We'll all see it through different eyes, of course, but what I see is how hard it would be to tease out trends from that sort of thing.

Your eyes may vary!

it's a graphical representation of data, exactly like Windows Media player does with music, so according to your approach it would be impossible to understand or make the music that drives the video simulation?

BTW, Kevsta - how's that speculating working out this year so far?

paused, other job taking all my time for another few weeks yet. although I am carefully watching US equities - WTI/Brent spreads currently for a short/long pair trade. possibly even next week this goes on.