Boris Schlossberg Profile picture
Jan 23 10 tweets 3 min read
1/ @agurevich23 proving once again that Russian immigrants are some of the smartest people around :). There is so much wisdom in this interview with @kevinmuir that it deserves a couple of threads. So let me start with point number one : cost of carry.
2/ When traders consider a play they often overlook the cost of carry embedded in the transaction.
3/ If your position is negative carry (meaning that you need to put up capital every day to maintain the trade) - that cost can often offset and sometimes totally negate whatever directional profits you are able to realize.
4/ That’s why Paulson’s massive bet against MBS in 2006-2008 was such a heroic bet, because he was negative carry all the way and many other investors who saw the same problem coming weren’t brave enough to do it in size.
5/ Indeed there is a thin blue line between hero and zero when doing negative carry trades and as the movie the Big Short shows Michael Burry who is lauded as a genius now was effectively on his way out of business after bleeding -17% returns on his CDS marks while the broader…
6/ …market was booming.
7/ The only reason he succeeded was because he was fortunate and brazen enough to refuse to redeem his investors, locking up their capital (or holding it hostage, depending on your point of view) until the trades finally moved his way and he was able to realize gargantuan…
8/ …profits.

@agurevich23 argues that all else being equal, you always want to be positive carry in your trades ( in layman’s terms - get paid while you wait ) because not only do you collect returns, but those returns will also cushion any adverse moves in the underlying.
9/ At very minimum be sure to avoid negative carry trades or if you are going to plunge into them understand that that clock is against you every second of the day, so make it quick.

Read his book here amazon.com/Trades-March-2…
10/ Listen to @kevinmuir interview here

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More from @Fxflow

Jan 23
1/ Ok here is thread two of the @kevinmuir interview with @agurevich23
“Treat a trade like a bullet from a gun”.

Conventional wisdom states that as traders we should be nimble and react to new information swiftly.
2/ Thus the trading cliche repeated mindlessly by so many PMs on podcasts “we have a strong opinion weakly held” meaning that we are confident in the trade but if new data disproves our thesis we will bail from it like a flock of pigeons scattering on a sidewalk.
3/ @agurevich23 flips the conventional on its head by saying that you should have weak beliefs strongly held, meaning that once you commit to trade you should hold it to target or stop and don’t allow the market noise to shake you out of your position.
Read 17 tweets
Jan 22
1/ My Weekly Trading Column

Who are You?

There is nothing more annoying, uncomfortable and unproductive than doing something you don’t enjoy over and over and over again.
2/ In our Anglo Saxon and Confucian worlds we are indoctrinated from birth to accept the fact that all progress comes through pain and discipline but that’s not really true.
3/ Einstein and Richard Feynman achieved their breakthroughs because they loved solving the mysteries of physics. Van Gogh, miserable as he was in personal life, couldn't imagine a day without painting.
Read 21 tweets
Jul 17, 2021
1/ Love is Conditional and So is Your Profit

Everything in life is conditional. Even love. If you don’t believe me, just ask a divorced person and you will quickly realize that love like everything else depends on context.
2/ Don’t marry your position is an expression used often in trading and it carries more truth than you know as it points to the fact that the relationships we develop with our trades can sometimes be more binding than our relationships with people.
3/ Understanding the conditionality paradigm does not make you a cold heartless human being, it just makes you a better trader. I am in no way arguing that you should treat people around you in a purely calculating, transactional manner.
Read 19 tweets
Jul 15, 2021
1/ Why am I going back to covering my face indoors despite the fact that I am fully vaxxed?

The delta variant is starting to really wreak havoc almost everywhere and is sure to get worse.
2/ Yea yea I know the chance of dying from COVID is basically 1%, so even if you get it you have a 99% chance of surviving it. This is a gross oversimplification and the odds are actually a bit worse, but I’ll give you this argument.
3/ I’ll also ignore long COVID which affects about 10-15% of the infected population and is a fate you wouldn’t want to wish on your worst enemy.

So let’s assume we have a 99% chance of survival even if infected. No biggie right?
Read 8 tweets
May 1, 2021
1/ This month Welles Wilder, a titan of technical analysis, passed away. He was the inventor of RSI, Parabolic SAR and Average Directional Index.
2/ There is no trader alive that has ever pulled up a chart and threw a few indicators on it that has not used Mr. Wilder’s inventions at one time in their life.
bit.ly/wilderrip
3/ Mr. Wilder was a trained mechanical engineer and he brought the mathematical discipline of that profession to the field of price analysis and for that the trading community will forever be grateful.
bit.ly/wilderrip
Read 18 tweets
Aug 29, 2020
Three simple reasons why you should always use a robot to Day Trade

I am bored - let me try this random entry
You are sitting around staring at the screen for a good hour or so and the market is doing absolutely nothing.
You’ve read the twitter feeds, caught up on the news from your CNBC/BBG stream, and are now basically twiddling your thumbs. You are bored and eager to start.

Suddenly the price action comes alive and whatever you are trading - EURUSD, Dow, Gold starts to rise in price.
The candle looks good - it’s breaking out! Ok, time to rumble, let get long baby!

Does this stupidity describe your everyday life? It sure describes mine.
Read 23 tweets

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