You see a lot of trade theses that look like sell-side research.

"We think this will happen, which will cause this to happen, which will cause this..."

"This company/project is better than this one, so I think it will outperform.."

You don't need to play such unreliable games.
Most reliable approaches to trading don't involve grand predictions of the future.

Just...

What's being over-offered now?
What's being over-bid now?

I spend most of my time trading the crypto markets at the moment.

I'm spectacularly uninformed about the projects.
I have no idea what the future looks like.

But sometimes I can buy an asset at $100 and sell a future on it for $110.

Sometimes people place limit orders and leave them alone. And I can take them if the market moves and they become attractive.
Sometimes people trade on massive market orders, blowing through liquidity. I can wait and supply liquidity to that.

Sometimes I can buy an instrument on one exchange and sell a similar one on another more expensive.
None of these things require me to know much about the future - or even the underlying thing I'm trading.

Just a coincident observation of:

- What's being over-offered now?
- What's being over-bid now?
@NewRiverInvest often shares good insights on this, from a totally different, very idiosyncratic market.

"What's on sale, right now?"

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More from @therobotjames

16 Nov
"Ask questions now? Or ask questions later?"

Imagine you are trading a futures product.

The prices of the futures as a function of their time to expiry looks like below.

You step away from the desk to make some tea.

And, upon your return, you see a different picture...

1/n
What happened to the Feb expiry?

It kinda sticks up.

The curve looks kinky now.

Why?

2/n
Could be many things:

1. Random large demand for that expiry has created temporary price impact, likely to revert
2. New info impacting that month is being priced efficiently
3. Somebody knows something and you're likely to see more demand come in behind in that expiry

3/n
Read 15 tweets
14 Nov
People say a lot of things about trading, and most of it is worthless.

So it's useful to be able to quickly discard ideas.

Let's take an example...

Many in crypto, including @zhusu, will tell you that buying new highs is a good plan.

Is it? Let's have a look...

1/n
It's important to understand that discarding ideas is a lot easier and quicker than verifying ideas.

Your mission is not to do the most perfect simulation of reality from the offset. You'll waste a lot of time doing that.

You want to do very quick data analysis.

2/n
Plenty of time to go deep later.

We:
1. pull daily price data for all FTX spot contracts
3. for each asset for each day, calculate the 20d high
4. calculate the distance in days from the 20d high
5. calculate next day log returns

3/n
Read 15 tweets
14 Nov
Sunday music post.

I grew up near Stonehenge, in the UK.

On 1 June 1985, the Wiltshire police beat the shit out of the travellers that came there for summer solstice.



"They're getting their kicks, they're laughing at you and me."
I was six years old at the time.

Even at that age, I knew exactly who these people were. 😿
Another great levellers song

open.spotify.com/track/4DjZtPbf…
Read 5 tweets
14 Nov
A man walks into a bar.

And he sees a guy with a massive orange for a head.

And he says "Sir, I can't help but notice you have a large orange for a head"

And the man says "yes I'm afraid I do"

And he buys him a drink and asks to hear his story.
"I bought a new house, and I was up in the attic, and I tripped over this dusty lamp

"And suddenly a genie was in front of me. And he looked very happy.

"And he said, 'thank you for releasing me from my bondage. Let me thank you. I will grant you two wishes"
'But I should warn you, said the genie, I interpret everything at face value, so think about what you ask me.

'Look at the piano player. He's tiny. The barman asked for a twelve inch pianist.'

"It's OK" said the man with the orange for a head, "I think I've got this"
Read 4 tweets
14 Oct
This Burry chap seems nice...
And, is it just me, or is getting absolutely balls long a concentrated hugely negative-carry bet written and marked my a more powerful counterparty, essentially a masterclass in how NOT to trade?
If I were Burry then, instead of having a cringe boomer Twitter meltdown, I would simply put on some My Chemical Romance, do some blow with some goth hookers, and blow off steam the old-fashioned way.
Read 4 tweets
8 Oct
Playing the easy games at the right time at scale. 🧵

In the early 2000s internet poker was just getting started and a vast number of the players were terrible and, at certain times, likely to be drunk.

You could do very well by simply "not doing dumb stuff".

Thread 👇👇

1/n
Some of the best games were "sit and go tournaments".

These were short single table 10 handed no limit hold'em games, with rapidly increasing blinds.

If you win you got half the prize pool, second 30%, third 20%. Everyone else got nothing.

Something like that anyway.

2/n
Optimal strategy against terrible drunk players is pretty simple.

You play extremely tight to start: only playing when you are prepared to bet your whole stack. (People would call you with anything.)

And when blinds get big you get more aggro, isolate players and steal

3/n
Read 12 tweets

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