Here I want to add an essential point which you should always consider while thinking about how to trade your own account. Trade a system which allows you to keep your losses as small as possible. That’s it. In your trading career you should reach a point where you redefine your wants and wishes from constantly hitting the hole in one’s and your need to be always proved right into focusing on one important thing: what can I do to keep my losses really, really, really small. Where are those ’safe’ entry points which minimize my potential losses. Simply change your point of view. That’s it.

This month trading was really crazy. After a tough start and a bad streak I was able to completly turn around my trading results. What have I done to do so? I sticked to my methodology and tried to constantly minimize my losses. I didn’t change my entry patterns and it’s rules nor I traded less. The only thing I did was to be disciplined and accepted my losses as a part of the game. That was it.

Best,
David Aigner

‘AI – ilias’ enters and exits trades based solely on signals derived from the harmony of market movements in its purest form. As you may notice the volatility of the PnL during the first few trades was quite high, so I took some time to tweak my methodology and to make the entry and exit rule more sensitive to market movements. Well, fortunately it seems that this step paid off. During the last month ‘AI – ilias’ has been not only stable but also the equity curve is currently being in a smooth, lasting upward movement. However, I should not forget to mention that due to several reasons I’ve only traded intraday and on an irregular basis. As a result, my trading system had underperformed and therefore the overall performance was quite not so good as it could have been. Nevertheless, please feel free to take a look at the pdf file here.

What is more, I am going to finish my Bachelor of Sciene in Business Administration soon. Of course I am very excited about that (hurray!) and maybe I will find some time to finish my ’startup’-section and place some more fresh content on my website too. We will see.

Executive Summary
In the course of this thesis an attempt was made in order to determine the attitude of
authors of several thousand text documents as either positive or negative. Sentiments
obtained from this evaluation have been compared with the S&P 500 index. The thesis
aimed at discovering possible correlations between the stock exchange and certain terms
aggregated to bullish or bearish indices.

This thesis starts with an overview of the software used. Subsequently, the author deals
with his approach to obtain the required annual reports of the companies listed on the
S&P 500 for the analysis. In this chapter, the author points out that every single document
was collected manually. Furthermore, it should be noted that the vast majority
of businesses offer their reports as pdf-files on their websites in an easily accessible and
clearly way.

The next chapter takes a closer look on the steps involved in text mining. The first
step was the preparation of the raw data, especially adapting document metadata. The
latter can be usually defined as data about data. For example, an annual report contains
meta information of its author, title and date of creation. Afterwards these documents
were imported in the computing environment. In this context the open-source-software
R for statistical computing and graphics and its extension tm was used. By using this
software the author experienced that the provided framework can import and process
large data sets in a user-friendly way by applying simple codes. The third step contained
several preprocessing steps such as stopword and whitespace removal to tide up the
texts. Finally, these texts were transformed to a so-called document-term-matrix holding
frequencies of distinct terms in order to be able to apply techniques from statistics and
data mining.

As expected the terms contained in our data set suggest a strong business focus. Some
frequent terms are ‘compani’, ‘asset’ and ‘cost’. Moreover, time series created, confirm
the authors assumptions made that an increase in randomly selected bullish terms (e.g.
‘increas’, ‘respect’) is usually followed by a rise in prices and that an increase in randomly
selected bearish terms (e.g. ‘credit’, ‘loss’) is usually followed by a decline in prices of
the S&P 500 index.

Finally, the appendix contains detailed information about the composition of the bullish-term-
index and the bearish-term-index.

(c) 2010 David Aigner

A downloadable pdf-file is going to be offered soon.

Download: Period Converter Optimized

Manfred Miethe

When they don’t achieve their goals, they don’t think of it as failure. Instead, they perceive it as feedback. Either feedback that the strategy they used was ineffective or that they did not take enough action. They then use this feedback to immediately change their strategy and take action again.

If they still don’t succeed, they will get more feedback, change their strategy and take action again. They keep repeating this process until they get what they want. They do whatever it takes. So, remember, every time you don’t get what you want, it is life giving you feedback. It is this continuous feedback you need to help you adjust your approach until you hit your target.

These are four steps to get anything that you want in your life.
Just know what you want specifically, develop a strategy, take action, get feedback and change your strategy until you succeed.

But wait! If achieving success is so easy, why doesn’t everybody do this? I could teach this formula to a hundred people, but not everyone will end up putting it into practice. Why? I have found that there are two more major elements that affect whether or not people will follow this formula. These are our Beliefs and our Values.

Here is the link to the full article: The Gulf Coast oil spill’s Dr. Doom

Here is the BP-chart

Die Antwort lautet: Nein. Auch hier lassen wir uns von einer optischen Täuschung trügen. Wer mit dem Spielen anfängt, wird entweder Glück oder Pech haben (da das Kasino im Vorteil ist, wird eine etwas größere Zahl kein Glück haben). Die Glücklichen werden aus dem Gefühl heraus, dass das Schicksal sie auserwählt hat, weitermachen. Die anderen werden entmutigt aufhören und nicht in der Stichprobe auftauchen. Sie werden sich wahrscheinlich, je nach Temperament, der Beobachtung von Vögeln, Scrabble, der Piraterie oder anderen Zeitvertreiben zuwenden. Diejenigen, die weiterhin spielen, werden sich daran erinnern, dass sie am Anfang Glück hatten. Die, die aufhören, werden per definitionem nicht mehr zur Gemeinde der überlebenden Spieler gehören. Das ist die Erklärung für Anfängerglück.“

Der Auszug stammt aus „Nassim Nicholas Talebs – The black swan“.

Das stumme Zeugnis der Glücklosen könnte demnach um einiges größer sein, als man möglicherweise annehmen würde.

source: Russell Sands: Turtles Down Under

Article: Neuroscience: Leadership – Erkenntnisse der Hirnforschung

Entscheidungen und Leben gehören unmittelbar zusammen. Leben auf allen Stufen seiner Entfaltung setzt Entscheidungen voraus. Hierbei gilt anzumerken, dass viele Entscheidungen unbewusst getroffen und erst im Nachhinein mit vernünftig klingenden Argumenten gerechtfertigt werden. Gilt es in einem Unternehmen etwas zu verbessern, so setzt dies immer eine vorausgehende Entscheidung voraus, mit der eine Verbesserung der Bedingungen antizipiert wird. Führungskräfte werden tagtäglich mit Entscheidungen konfrontiert, dabei gilt es stets zu beachten die richtigen Dinge zu tun, anstelle nur die Dinge richtig zu tun.

Article: BBC-Reportage “Million Dollar Traders: Make me a Trader”

Eight ordinary people are given a million dollars, a fortnight of intensive training and two months to run their own hedge fund. Can they make a killing? The experiment reveals the inner workings of a City trading floor. The money is supplied by hedge fund manager Lex van Dam: he wants to see if ordinary people can beat the professionals, and he expects a return on his investment too. Yet no-one foresees the financial crisis that lies ahead.

Article: Options Education: Greek Letters

Nun, meiner Meinung nach sind Options wie ein Legobaukasten, mit dem man sich alle gewünschten Szenarien zusammenbauen kann. Die Grundbausteine sind die Greeks, und wer sie verstanden hat, ist nicht mehr so abhängig von bestimmten Options – Konstellationen, bekommt viel schneller einen Überblick, was in seinem Portfolio los ist und auf welche Risiken man ein Auge werfen sollte. Wichtig ist zunächst, dass alle greek letters zueinander in Beziehung stehen und dass man somit bestimmte Risiken nicht absichern kann, ohne andere einzugehen, außer man schließt die Position oder hedged mit anderen Options.

Article: Fehlerangst macht handlungsunfähig

Die Hirnforschung zeigt: Fehler treiben die Erkenntnis voran und tragen zur Handlungs- optimierung bei – Fehler zu ignorieren kann Probleme bringen – Tipps für den Berufsalltag.

Article: Secrets of Greatness: What it takes to be great

What makes Tiger Woods great? What made Berkshire Hathaway (Charts) Chairman Warren Buffett the world’s premier investor? We think we know: Each was a natural who came into the world with a gift for doing exactly what he ended up doing. As Buffett told Fortune not long ago, he was “wired at birth to allocate capital.” It’s a one-in-a-million thing. You’ve got it – or you don’t.