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Inspiring Mark Cuban Quotes To Motivate You

“Every no gets me closer to a yes.” – Mark Cuban

“Don’t get caught up in how many hours you work. Judge success based on having goals and measuring your results. Hard work, and lots of it, is certainly needed, but focus on what you get done.” – Mark Cuban

“Always wake up with a smile knowing that today you are going to have fun accomplishing what others are too afraid to do.” – Mark Cuban

If you’re prepared and you know what it takes, it’s not a risk. You just have to figure out how to get there. There is always a way to get there.” – Mark Cuban

“Don’t start a company unless it’s an obsession and something you love. If you have an exit strategy, it’s not an obsession.” – Mark Cuban

“One thing we can all control is effort. Put in the time to become an expert in whatever you’re doing. It will give you an advantage because most people don’t do this.” – Mark Cuban

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Trend Following- How Should You Feel

Trend Following- How Should You Feel

 

I want to share story. I was short Soybeans and my protective stop was filled yesterday. As Murphy law always works…I went short as this was the lowest low…had a trailing stop based on ATR multiples. Took my small loss (part of the game) and moved on both from a trading and emotion level. Not emotionally easy to have a trade hit a stop and then reverse. Welcome to trend following. This is reality. Trend following is not easy!

 

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What to Really Think About Trend Following Managed Futures

Investors or want to be investors FORGET! Maybe they want to forget 2007 and 2008 if they were stock traders..

Investing is a challenging endeavor due to the fact we are human beings, that are hard wired to make poor decisions when times get tough. Times are VERY tough for Trend following in Managed Futures. All asset classes have their time in the sun and time under the clouds.

Numerous studies on mutual funds and index funds have demonstrated that the rate of return enjoyed by their investors are a fraction of the overall rate achieved by the fund itself. This is due to human behavior and feelings of euphoria or fear that drive investors to buy and sell at inopportune times. It cannot be overstated how strongly our ‘fight or flight’ response negatively impacts decisions especially of a financial nature. There are two effective ways to mitigate the impact of human nature on investment returns. One consists of true diversification in an investment portfolio comprising disparate asset classes and strategies. A portfolio made up of stocks, bonds, and managed futures (currencies, commodities, bonds and precious metals) since 1986 has achieved a compound rate of return of 9.02% with a standard deviation of 8.95% and a maximum peak to trough loss (Max DD) of -26.61%. Compare that to owning the S&P 500 outright which compounded at 10.14%. Yet that additional 1% of return was accompanied by nearly twice the risk, a standard deviation of 14.99% and a peak to trough loss (Max DD) of more than 50%. It’s one thing to see returns on paper but something entirely different to experience them in real time. It’s no wonder investors are unable to keep up.

All too many have forgotten the 50% + draw downs in the Stock market. Warren Buffett had 2 long periods of time in which he was down approx 50%. It was inferred he was a has been or senile or whatever terrible comment. Investors want it now. Now does not always exist.

The second way to mitigate the impact of behavior on investment returns is through utilizing a rule based systematic process. Most managed futures trendfollowing are systematic. However this has not been a savings grace. It has been UGLY. 2015 and 2016…rather poor….then include 2011,2012,2013 it is easy to see why so many have quit.

 

By following predetermined rules in making investment decisions, one is prepared in advance for all market environments. Even with that said….it is not the depth of the draw down rather the duration of the draw down.

 

Instead of making discretionary decisions under fire in times of stress, having rules allows you to benefit from these occasional dislocations. In addition, a systematic approach allows investors the ability to implement a statistical edge that works over time not all the time. Finally, through disciplined risk management a rules based approach determines the exit point of an investment before it is entered, preventing unprofitable positions from causing lasting damage to a portfolio. Rules allow an investor to remove what is often their worst enemy when it comes to investing; themselves. Even with all of the above…Trend Following takes mental stamina. This morning I woke up to my long Gold position going the opposite way….along with the grains…and bonds….( typical)…Just one position gapped up….French Stock Market…That could have easily been the opposite. In trend following we just do not know. We have to try to put on small trades and see if they work…

 

PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THE RISK OF LOSS IN TRADING COMMODITY FUTURES, OPTIONS, AND FOREIGN EXCHANGE (“FOREX”) IS SUBSTANTIAL.

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Stock Market Crash Alert- Trend Following

Yes…the stock market has been trending upwards…however that has waned…

The realities are as follows…

 

Company valuations are sky-high.

At 26.44, the S&P 500’s Price/Earnings ratio is the highest EVER, except for 2008 crash and the 2000 crash. You decide if it is a good time to invest????

At 28.93, the “Shiller P/E ratio”, which looks at company valuations over a longer-term, 10-year period and adjusts for inflation, is at the highest level EVER, except for two occasions again… 2000 crash and do not want to say the 1929 crash. Wow!!!!

Price to sales ratios are near the highest levels in at least 50 years.

Price to book ratios haven’t been at this level since the 2008 crash.

And the stock market cap to GDP ratio is the highest since the 2000 crash.

Bloomberg came out with Paul Tudor Jones described these expensive stock market valuations as “terrifying” earlier this month at a closed-door asset management conference hosted by Goldman Sachs. Immediately there were pundits…however facts are facts…

According to Yale University’s Stock Market Confidence Index, for example, over 90% of individual investors believe that the stock market will rise in the next 12 months.

 

How much longer can the insanity continue? All asset classes are at bubble levels…

You tell me…

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Another Buy the Dip for The Stock Market – Trend Following

Another Buy the Dip for The Stock Market – Trend Following

So whats new? Another buy the dip day in the stock market? The leading stocks were strong and closed near the top of its trading range. Volume was slightly lower than yesterday but about average and the relative strength line of the index is looking better. Today was a positive session and went a good distance toward improving the picture. All the major averages rallied the entire session and held their gains. The Nasd averages are also very close to new high ground. The SPX closed almost right on its 50dma. The market needs a little more action like today to strengthen the case for a rally resumption, but today’s action helped.

What is completely ironic….WW3 with North Korea could be on the horizon and the stock market does not care. French elections and another shooting…no one cares. Legendary Hedge fund managers one after the next who have seen stock market cycle are shouting FIRE! Again the market does not care!

This is what trend following is….tune out the news…follow what the market is doing. On a personal note I am long the French Stock market. Not that I have any opinion or knowledge. Simply I had a signal and took the trade. My protection is in…but would this be a trade I would want? Nope…it is easy to want to buy gold or bonds. Have a trading plan and simply follow it…

Trend following

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Richard Dennis Original Turtle Trader Interview- Trend Following

Education is everything. Who best to learn from are the masters themselves in Trend Following. Richard Dennis and Eckhardt are the modern day founders of Trend following. On top traders they post fascinating interviews with legendary trend followers such as Jerry Parker…and many other traders.

It is well worth your time to listen.

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Trend Following…Death of Thousand Cuts

What’s going on with Trend Following?  This is no get rich quick…Trend following is not make money in up or down markets…..it’s been one tough environment for systematic programs which rely on market momentum and volatility breakouts. It’s been well documented that we are in a historically low volatility.

Trend following currently has been “Death of a thousand cuts story”, with the computer models designed to typically look for every possible opportunity more so than they’re designed to avoid a lack of opportunity. Stitch it altogether and you get a lot of “strikeouts” and not a lot of hits, causing consistent losses. No big trends…no lasting directions…This is the only way trend followers make money.

As in baseball…only way to win is to have the right pitch. We as trend followers are not getting these pitches…Rather striking out…small losses…and simply more small losses. We are swinging at every pitch as you never know which pitch can win the game. I remember the CEO of the CME telling a story about a silver trade in which he exited (against his system) as he thought it had gone to an extreme…however silver during the Hunt brothers went to the moon….anything can and will happen with trend following…we have to go through the tough times to hopefully reach the good times…

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Stock Market Update- Trend Following

The New York stock market averages are now under their 50 day moving averages as well as the Nasd averages are just slightly above this support level. The Semi stocks have continued to weaken and the SOX moved further below its 50dma. The market looks tired and the rally that began last November is under the most stress it has been in. An increased level of caution is warranted at least for now.

However with that said…we are always waiting and watching with our “Trend Following Watch List”

BABA is holding up…

DHI

Has a congestion …looking for a breakout..

 

MTSI A semi is still holding up…stronger than the rest

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Trend Following Breakout Setup MCHP

Sometimes you have a setup of congestion. MCHP is a good example of this. More so, this is a leading stock in a leading industry…Example of trend following…buying out new highs…

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Successful Trend Following -Knowing You Do Not Know

It is always a pleasure to listen to the podcasts from Traders Unplugged. Episode 95 was extremely informative. The podcast included Katy Kaminski, Alex Greyserman & Roberto Osorio. All trio work at the leading Trend following funds. What I found very interesting was the depth of data they looked into. Considering how tough the last couple of years have been for trend following, the data in which they spoke put things into context. Trend following is a very tough way to invest….however historically ( which does not mean anything as past performance is not indicative) Trend following has produced non correlated returns to the stock market….You can listen to the podcast by clicking here.

Past performance is not indicative of future performance

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