Micro-districts

Taillin, Estonia, summer 2016,

we arrived to the city and did the traditional tourism walk in the historical center. Taking some information and reading about what our book say about the city, it was clear the URSS influence on the city in their history.

After that we went to the appartment we were going to stay. This was inside of a major district built during the URSS period. They are called micro-districs.

How does micro-districts work?

The person hosting in his home was a Russian citizen, he explained to us that the round shape of the district tried to influss the sense of community into the people living there.

All services where inside: stores, school, police station, a small health office… in your day to day you could spend the whole day there. As a child, to stay in the distric was very common.

For instance, in a building of flats, the older children had to pick-up the younger ones, so they would go with them to the school; in this way the mothers could work at home. There were other rules like that to reinforce the sense of belonging to the district. This small gesture was to promote the continuous collaboration between people.

Cupertino

Today I have seen a picture in the news about the evolution of the new Apple headquarters office. When I saw the picture I could not resist the comparisson to the URSS microdistricts.

What do you think?

 

 

Kraken

For my poor memory I will list some of the experiences I have had using Kraken.

Configuration, set-up and deposit

All work easily and quick

Stop-loss

They are deactivated since July or August of 2017, due to a overload of stop-loss was provoking that the triggers were not working.

Maintenance

Today I entered in the site and I found it. Today means:

  • 11/01/2018 10:54 CET
  • 12/01/2018 18:08 CET

***MAINTENANCE ANNOUNCEMENT***

Kraken is presently offline for maintenance.

While maintenance is underway, the website and API will not be reachable, and orders will not be able to be placed or canceled.

The Kraken Team

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The happiness advantage

Seven principles of positive psycology that fuels success and performance at work, by Shawn Anchor.

The Happiness Advantage

says that people who are happy have a psychological advantage over people who are unhappy. One way to test this is through studies over time.

  • Meditate.
  • Find something to look forward to. Anticipate future rewards lights up the pleasure centers (Pirineos)
  • Commit conscious acts of kindness.
  • Infuse positivity into your surroundings.
  • Exercise.
  • Spend money on activities.
  • Exercise a signature strength (painting…)

The Fulcrum and the Lever

talks about the power of the mindset. The fulcrum is the mindset of the person; the length of the lever corresponds to the potential power and possibility that person believes s/he.

If someone moves the fulcrum in the right direction by adopting a more positive mindset, the lever of possibility lengthens, which leads, to an eventual positive outcome.

The more you believe in your ability to succeed, the more likely it is that you will (confidence).

Remind yourself the relevant skills you have, rather than those you lack.

More important still that believing in your own abilities is believing that you can improve these abilities. Instead of being a “fixed mindset” person, be a “growth mindset” one.

The Tetris Effect

talks about how to retrain your brain to spot patterns of possibility rather than patterns of failure.

The tetris effect stems from a very normal physical process that repeated playing triggersin their brains. They become stuck in something called a “cognitive afterimage”.

Scan the word with positive attitude: it increases creativity, decreases stress and increases our motivation to complete the goals. The result? happiness, gratitude and optimism.

Falling Up

How to find the mental path out of failure.

The Zorro Circle

In the face of overwhelming odds, how to fight off emotions and regain control by beginning with small manageable goals, and them make the circle bigger.

The 20-Second Rule

is about how to fight off the weakening willpower to be positive.

We are mere bundles of habits that we are able to automatically perform many of our daily tasks.

Willpower is not the way, the more you use it, the more worn out it gets. You have to workout your willpower. The need to train the habits (21 days).

Advertisers and marketers make their live on the path of least resistance. They easy the way they want you to act (basically as an illustrated hedonist).

Lower the activation energy for the habits you want to adopt, and raise it for the habits you want to avoid. To decrease the amount of choices also lower the activation energy to act.

Repeated actions is the key to create these habits, until te actions become ingrained in your brain’s neural chemistry. And the key to daily practice is to put your desire as close to the path of least resistance as humanly possible. Identification of the activation energy is a key step on all this.

Save time avoiding distractions and activities that are not a priority.

Set rules of engagement in advance, it free us from the constant use of willpower.

Social Investment

Some tips about how to invest in friends, peers and family members to move forward in challenging times. Some examples about how this influences in the individuals and the society.

They are your football offensive line that protects you from stress and adversity.

 

Paper trading

Paper trading is a stock market simulator. Tradingview enables you to work on paper trading in an easy way: it’s embeeded and you can launch the positions very easily.

I have started to use it as part of the tests I’m doing. It has pros and cons.

Pros

It’s very clear and it’s very intuitive to create the positions, move the stop-loss, etc.

Cons

  • Mentally you do not have the pressure of the real money you are investing.
  • You launch positions very quickly and they are executed very quickly. Real live does not work like this, and I still do not understand all that happens in the middle. To launch positions in Kraken is very different and the behavior of the market (offer and demand) is different as paper trading operates.

Paper trading is in any case a good tool for testing, and monetize the positions you perform and check if the strategy and the way to put it in place works.

Strategy to test: bb-rsi-cmf

The strategy I’m using is very popular and extended. So many people knows it and therea re thousand of variances to the main one. Surprisingly it still works.

The name I gave to this strategy is “bb-rsi-cmf” and comes from the 3 indicators I’m using to work on it.

These indicators are:

  • Trend indicator = Bollinger bands.
  • Momentum indicator = RSI.
  • Volume indicator = Chaikin Money flow (confirm with japanese candles).

Configuration of the indicators in Trading View

The configuration of the Bollinger Bands in Tradingview can be adjusted, especially for the standard deviation that by default is 2. I have adjusted to 2.5 to increase accuracy.

From the Wikipedia about StdDev:

  • For the normal distribution, this includes 68.27% of the numbers;
  • 2 standard deviations from the mean include 95.45%;
  • 3 standard deviations from the mean include 99.73%;
  • 4 standard deviations from the mean include 99.994%.

The configuration of the Chaikin Money Flow (CMF) indicator just have a parameter: Lenght. It indicates the time period to be used in calculating Chaikin Money Flow (I keep the default value = 20).

The configuration of RSI have a couple of parameters:

  • Length: The time period to be used in calculating the RSI. 14 days is the default.
  • Source: Determines what data from each bar will be used in calculations. “Close” is the default.

Entry criteria:

  • Wait for the candle to pass the low bollinger band. On this event,
    • Check that RSI < 30%, or close to it.
    • Check that Chaikin Money Flow has enough volume.
    • If so, go to next step.
  • Draw the resistances using the red candles taking the ones that are higher.
  • Wait till the value cross the resistance line. It’s better when the cross is done by a green candle. Open the position at this point (this action requires you a quick reaction).
  • Define the exit point and the stop loss.

Exit criteria

  • Define the stop loss (1%).
  • Define the exit point (2%).
  • Close the position when some of the events happen.

During the position is opened

  • Pay attention to the way the value is moving.
  • Check the volume of activity in the table of prices.
  • Check if RSI rises above 70%. This means the market is overboughting (good!).
  • If the value goes up, move the stop-loss up, (ideally turn the stop-loss into a stop-win).

First try, Lose.

This picture below shows the first try I did on this strategy, the result: lose 1%.

Chaikin Money Flow behavior

When Chaikin Money Flow crosses the Zero Line, this can be an indication that there is an impending trend reversal.

  • Bullish Crosses occur when Chaikin Money Flow crosses from below the Zero Line to above the Zero Line. Price then falls.
  • Bearish Crosses occur when Chaikin Money Flow crosses from above the Zero Line to below the Zero Line. Price then rises.

It should be noted that brief crosses can occur resulting in false signals. The best way to avoid these false signals is by examining past performance for the particular security that is being analyzed and even adjusting the thresholds accordingly. For example, instead of a Zero Line Cross, a technical analyst may use two separate lines such as .05 and -.05.

Bolsa para Dummies

Un amigo me recomendó leerme este libro, en concreto la parte 3, que recorre un día de trading cualquiera, repasando hábitos y actividades en las cuales nos deberíamos centrar; y la parte 4, que repasa varias estrategias básicas: gap, bandas de bollinger, y cruce de medias. Me sirvió para confirmar algunas cosas que ya había aprendido y reforzar algunos hábitos.

El libro está escrito en un lenguaje muy directo y repite las cosas varias veces sin resultar demasiado espeso. Se lee rápido y encuadra los conceptos en base a un esquema que se respeta durante todo el libro.

Depth chart

I have access to GDAX and I found this Depth chart that enables you (in some way) to check the momentum and the volume of demand and supply there is in the market. Tradingview also offers this chart.

This post explains how it works.

Lessons observing the chart

Lesson 1: there are positions that enter and exit in miliseconds

When you start watching this chart and see how the buy/sell forces drives the price, you will see a lot of positions entering and disappearing. The limited refresh of the screen just enable you to see flashes. The amount of people with machines procesing automatic positions and cancelling them depends on the coin.

Trading, risk management

Risk management is one of the key points when you trade in any market

I have to mature the risk management mindset and measure how the actions I perform are working with respect a level of exposure that I want to take.

Definition of level of exposure

  • Perform operations between 0,5% and 2% of the value of your portfolio.
  • Understand that for higher volability, the time-spam for trading has to be short, as the risk exposure is higher.
  • When you define a move you have to define the amount or percentage that you expect to earn.
    • You will have to define a ratio of earnings/loss.
    • This ratio should be between 2 – 3. This means that if you expect to with 20 points, you should stop when you are losing 10 points; this corresponds to a “2” ratio.
    • A ratio close to “2” is more conservative. A ratio close to 3 is more risk.
  • If you lose 20% of your portfolio, stop trading, think about what is happening with the right perspective. If you not do it, you have high percentage of losing all.
  • A loss of 10% in a month is unacceptable, this is also an event that should trigger you to stop.
  • Backtest, backtest and backtest is an exercise that really improve the results and reduce the risks.
  • Review trading bias regulary.

Stop Loss

  • Define where to put the stop-loss.
  • Do not touch the stop loss.

Quantitative trading on cryptocurrency market Q2

This is the second chapter of a learning process that started last September.

Second Quarter

The second step is defined for the next 3 months, where the main goal is to define a specific strategy of quantitative trading and work on it with real money on crypto currency market.

Following the V2MOM model:

  • Vision: Have a strategy running in crypto currency market.
  • Values: have fun, learn a lot, build a team with Dani, do practices and more practices.
  • Method: learn about quantitative trading principles and patterns, understand the basis of how blockchain markets work.
  • Obstacles: Time.
  • Measures: have an account with money and making short/long decisions. Have a lot of data related to the backtesting of different versions of a specific strategy. Accumulate a list of learned lessons and experiences for blockchain, quantitative trading and python.

Death line = March 2018

Results (xx April 2018)

  • Time to be accountable