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Robot James 🤖🏖 Profile picture
@therobotjames
Sep 19, 2021 • 5 tweets • 1 min read • Read on X
If you weren't there, you have no idea how disgustingly decadent pre-GFC sell side finance was.

Whatever you imagine x10.
Silicon Valley is amateur hour choirboy stuff in comparison.
Need a burner account to share stories 😂
My first lunch, City of London, 2001.

Boss orders two bottles of wine, one not on the wine list.

Only one bottle of wine ever arrives.

Two bottles of wine on the receipt for expenses.

Animated chat.
Got worse from there...

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More from @therobotjames

Robot James 🤖🏖 Profile picture
Apr 23
trading is hard.

if you disagree, that's cos you haven't done it for long enough.

you can get lucky for a while - but your luck will inevitably turn

you can find yourself doing the right thing at the right time for a while - but markets adapt quicker than you can, typically.
extracting returns from the market, persistently, over years and decades is tough.

it requires pragmatism and flexibility.

it requires you to be decisive about trade-offs, in a world of incomplete information and massive uncertainty.
if the responsibility of turning money into more money incites a certain amount of anxiety in you, that is the good and natural and correct response.

financial markets are highly competitive.

that's because they are competitive, they are highly adaptive.
Read 18 tweets
Robot James 🤖🏖 Profile picture
Apr 16
i saw a bunch of people saying that high-ish interest rates were very bad for risk assets.

you shouldn't believe it when ppl say stuff like that

ppl say all kinds of dumb stuff

and you can investigate it yourself in five minutes to see if it's bollox or not.
this page lists historical total returns on stocks, bonds, and bills, and historical yields since 1928.



we can pull that into excel with Get Data > From Web, then pasting that url.

here is the data pages.stern.nyu.edu/~adamodar/New_…
Image
now we want two columns of data.

1. the annual returns on 3 month t-bills
2. the annual returns of s&p500 including dividends

so, to keep it tidy, lets remove all the columns we don't need. Image
Read 8 tweets
Robot James 🤖🏖 Profile picture
Mar 19
if you try random trading rules on raw data, you'll find a lot of stuff that would seem to have made money in the past if you'd been trading it.

but you're unlikely to have achieved anything useful, even if your simulation of all the frictions involved was perfect.
the main reason for this is luck.

your raw data contains a lot of non-randomness.

sims on options contacts, especially, are full of unintended bets.

contracts are incomparable with themselves as price moves relative to their strike, and as time approaches contract expiry.
if you simulate buying a 1m ATM straddle at the start of the month, it starts off being a delta-neutral bet on 1m volatility.

but during the month it picks up directional risk that you didn't want and becomes a smaller bet on more volatile shorter-term volatility.
Read 18 tweets
Robot James 🤖🏖 Profile picture
Feb 19
at some point, volatility is going to spike a lot.

and lots of you are going to get rekt cos you didn't have a good plan for what to do, or you didn't stick to it.

i can't have that on my conscience - i got enough already - so pls read this and make a plan.
you need to be prepared to TRADE to keep your risk in line.

the market is constantly giving you risk you don't want.

there's no excuse for just accepting that.

if the market gave you risk you don't want, you gotta trade to push your risk back to what you wanted.
1. when you first put a position on, the risk you want and the risk you have are the same.

2. over time, the market gives you different risk

3. when the risk the market gives you is more (or less) than you'd accept, trade to push it back within acceptable bounds. Image
Read 9 tweets
Robot James 🤖🏖 Profile picture
Nov 4, 2023
if you have been paying attention recently, you may have heard whispers of the dangers that the rapid growth of the Forex Repo Market may pose to the financial system.

but what is the Forex Repo Market?
despite its relative obscurity, the Forex Repo Market is a pivotal component of modern finance, facilitating short-term currency liquidity like no other mechanism.
in this market, participants can "repo" a currency pair, effectively agreeing to sell the pair today and buy it back in the future at a set price. this enables powerful leverage and hedging strategies that wouldn't be possible otherwise.
Read 9 tweets
Robot James 🤖🏖 Profile picture
Oct 25, 2023
stop trying to beat djokovic at tennis.

the first fundamental problem traders run up against is that there's no beginners' market.

you gotta compete for good prices with the best in the market.

this is a problem.

there are a lot of people better at markets than you. Image
if you approach trading in a gung-ho manner, it's basically like playing in a tennis competition with djokovic.

and that's not going to go well.

cos he's very good at playing tennis and you're bad at it.

(sorry to break it to)
what do i mean about "competing for prices with the best in the market?"

well... to make money trading you need to buying things that are too cheap and selling things that are too expensive.

you need your side of the trade to be good and the other side of the trade to be bad. Image
Read 28 tweets

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