Out of the ashes

CONGRATULATIONS!!! :grin: :grin:

This course takes dedication.

You can rip through it and take bullet points and come out with a sense of understanding.

But, you my friend, poured through this course with nothing but dedication. A feat to be recognized.

So once again, congratulations!

This is something I find myself having trouble with and I find it incredible to have it defined and wrote with intent. Having these quotes can guide a person with application. Certainly worth every letter.

You’ve been taking this seriously and applying yourself evidently :grin:

I have no doubt you’ll reach your goals.

Cheers to success man! :beers: :beers: :beers:

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Thanks, Tony! Thank you for inspiring me to get focused and stay on track. I wouldn’t have started this journal if you never made yours. Writing in my journal gave me a lot of clarity and insights I wouldn’t have without this journal.

I’m glad you found that quote valuable. Charlie Munger is a great man to emulate.

Cheers to success, my friend! :beers: :beers: :beers: :beers: :beers: :beers:

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Yeah! Congratulations :confetti_ball: :bouquet::champagne:

After the struggle with your inner self that needs you to relax and give up on this, you finally overcame it and grabbed the bull’s horn. Now you begin your next phase.

Seeing myself already graduating as well.:grin: But of course, mine is coming up pretty soon, most certainly before the end of this month.

Congratulations once again.

Cheers to success🍻

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Thank you, Ekene! Thanks for being here and writing about your story and progress. It inspires me that you are working hard to make a comeback after the painful loss you had in crypto.

I’m looking forward to your graduation and seeing what you will do next.

Cheers to success🍻

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Why I’m Not Working On Becoming A Discretionary Trader

Apophenia is the tendency to perceive a connection or meaningful pattern between unrelated or random things. Apophenia can give rise to things like conspiracy theories.

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I’m someone with a creative and overactive imagination that can sometimes be susceptible to apophenia.

That’s why I can’t be a good discretionary trader and prefer being a mechanical trader. I’m also more interested in learning the coding and math skills of a quant trader.

In my research about quant trading, I came across the book Technical Analysis is Mostly Bullsh!t by Tim Morris. It confirms a lot of what I already thought about technical analysis.

I never got into trying technical analysis out because I could see how subjective, ambiguous, and open to interpretation it was. I didn’t like how there were no hard numbers about how effective they were.

I also knew that my apophenia will prevent me from using technical analysis well. I will end up hallucinating patterns with technical analysis that fool me into believing I found a good trade.

One thing I like about the book is some evidence that shows technical analysis doesn’t work.

This a paper that studies candlestick patterns: Do Japanese Candlesticks help solving
the trader’s dilemma?

This is a blog article about candlestick patterns: Candlestick Patterns, They Really Work? Conducting a Massive Event Study

I think it’s possible to have success as a discretionary trader and I know about some successful traders who honed their intuition to be able to use technical analysis well. I probably won’t be successful with it because of my apophenia, and it also doesn’t suit my personality.

I might try it after I get good as a mechanical trader. I’m staying away from it for now.

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I read it also, and it’s a worthwhile read. But it doesn’t matter if TA is nonsense or not. If it’s self-fulfilling, that’s the only thing for traders to be concerned about.

This is a good reason to not choose a method. There are arguments for and against every type of analysis. In the end, just do what works for you.

Congratulations!!!

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Renaissance Technologies

Founded in 1982

Registered with the SEC, NFA, and CFTC

Significant employee investment in the funds we manage

Average tenure of more than 13 years across our 300 employees

Intellectually vibrant culture of collaboration, discipline, critical analysis, and intense research

90 PhDs in mathematics, physics, computer science, and related fields

A MacArthur Fellow, National Academy of Sciences members, and many authors of widely cited scientific papers

On-the-job training in quantitative portfolio management

40 years of experience in developing and managing proprietary quantitative trading strategies

Uniform data-driven approach applied across all funds

A research database that grows by more than 40 terabytes a day

50,000 computer cores with 150 gigabits per second of global connectivity

Redundant computational facilities, each fully capable of supporting our trading operations

I’ve been exploring the world of quant trading and hedge funds. Working for a hedge fund like Renaissance Technologies or starting my own hedge fund similar to Renaissance Technologies doesn’t seem out of reach for me.

I would love to get the chance to work with people who are leaders in their respective fields to improve their computerized trading systems. If I don’t get that chance, I’ll try to replicate their systems on my own and with whoever wants to work with me.

The knowledge and wisdom I learned from the School of Pipsology opened up these possibilities. I would never have considered this path if I didn’t complete the School.

This week I started reading The Man Who Solved the Market by Gregory Zuckerman. This book has given me a better understanding of the kind of people who work in hedge funds. It has been eye-opening and exciting to learn about Jim Simons and the story of how he built Renaissance Technologies.

Renaissance Technologies is hiring, and I know the kind of people they’re looking for. It will take a lot of work before I’m someone who they’ll hire. It will take even more work to create a hedge fund similar to them. I only have this one life. I might as well dream big and make those dreams come true before I die.

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Quixotic Quest

I gave up working on being a forex trader so I could work on being a quant. If I had more time, I would work on both, but I only have time for one of them.

I don’t think being a forex trader is better or worse than being a quant. I think I can succeed in either one as long as I put in the time and hard work. I know I’ll get more out of being a quant than being a forex trader.

If I succeed in joining a hedge fund like Resnaissance Technologies or creating my own hedge fund, it will be a rewarding and meaningful experience to work with brilliant minds on a mission to build trading systems with advanced math and computers.

If I fail, I’ll still end up with the math and coding skills I can apply to other fields like data analytics, software development, or even forex trading if I want to.

This passage in chapter 8 from The Man Who Solved the Market sealed the deal for me to stop working on forex trading altogether:

Until then, Simons and his colleagues hadn’t spent too much time wondering why their growing collection of algorithms predicted prices so presciently. They were scientists and mathematicians, not analysts or economists. If certain signals produced results that were statistically significant, that was enough to include them in the trading model.

“I don’t know why planets orbit the sun,” Simons told a colleague, suggesting one didn’t spend too much time figuring out why the market’s patterns existed. “That doesn’t mean I can’t predict them.”

Still, the returns were piling up so fast, it was getting a bit absurd. Medallion soared over 25 percent just in June 1994, on its way to a 71 percent surge that year, results that even Simons described as “simply remarkable.” Even more impressive: The gains came in a year the Federal Reserve surprised investors by hiking interest rates repeatedly, leading to deep losses for many investors.

The Renaissance team was curious by nature, as were many of its investors. They couldn’t help wonder what the heck was going on. If Medallion was emerging as a big winner in most of its trades, who was on the other side suffering the losses?

Over time, Simons came to the conclusion that the losers probably weren’t those who trade infrequently, such as buy-and-hold individual investors, or even the “treasurer of a multinational corporation,” who adjusts her portfolio of foreign currencies every once in a while, to suit her company’s needs, as Simons told his investors.

Instead, it seemed Renaissance was exploiting the foibles and faults of fellow speculators, both big and small.

“The manager of a global hedge fund who is guessing on a frequent basis the direction of the French bond market may be a more exploitable participant,” Simons said.

Laufer had a slightly different explanation for their heady returns. When Patterson came to him, curious about the source of the money they were raking in, Laufer pointed to a different set of traders infamous for both their excessive trading and overconfidence when it came to predicting the direction of the market.

“It’s a lot of dentists,” Laufer said.

Retail traders like those dentists are at a disadvantage against hedge funds like Renaissance Technologies that use mathematical and statistical models that keep improving along with their algorithms and computers.

If I become a retail trader, I think I don’t stand much of a chance against the quants who can easily exploit my foibles and faults. Since I can’t beat them, I’ll join them.

When I started The School of Pipsology, I thought I might earn a living as a retail forex trader one day. I never imagined I would end up somewhere else. It was a big surprise to me when I chose to be a quant instead.

I thought I had it figured out, but I don’t. I’m still a mystery and a stranger to myself. I’m on my own now as I continue this quixotic quest to be a quant.

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Simply amazing these hedge funds are.

I myself am not educated on quant traders but it appears to be the highest level of what small retail traders are attempting to capture whether they realize it or not.

A self-improving model of data as everyday passes. Incredibly interesting.

I admire your tall goals. Shoot for the stars my friend!

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@playwiththegods How was this week for you?

I’ve been chillin like a supervillain. Thanks for asking.

I carried out some of my diabolical plans for taking over the trading world by signing up for Khan Academy so I can master math.

I finished Kindergarten and started on 1st Grade.

I finished reading this book.
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I think it’s a book worth reading again because I got a lot out of it. The amazing story of Jim Simons and the success of his company Renaissance Technologies was an inspiring introduction to the world of quant trading.

I completed a small project that I programmed in Python.

It’s a simple game like the arcade game Space Invaders.

I’m taking over the trading world one baby step at a time. :smiling_imp:

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