Tradingeconomics.com

I was yesterday night navigating onto the different charts and data that are available in this web: https://tradingeconomics.com

The purpose is to define a set of macro indicators that enable me to contrast macro trends into a sector, so I can advance in general terms the trend of the sector or identify a divergence.

For instance, the manufacturing sector has a lot of dependency on:

  • Consumer expenditure.
  • Energy price (electricity, gas, Brent barrel…)
  • and Raw material prices.

Here I can check all this. The difficulty is going to define the right indicators to check, and simplify the amount of data to be reviewed.

S&P Predictions

The beginning

On August 3rd 2018 I wrote about some behaviors of S&P . These behaviors and my desire to develop reports to understand trends at monthly level took me to draw this figure the same day:

How things happened in the calendar

At the end of August I took the decision that I was going to sell the majority of my positions. I did it.

In September I was astonished with the defiance to gravity of the market and a little bit pissed-off with the trend.

Now in October, specially in the second half of the month, I have seen how this has been evolving. The Q3 closing reports seemed to be the flutter of the butterfly that changed the trend.

The feeling

It’s just a graphic, it’s just a figure, it’s just a coincidence, but I’m happy about all I learned to be able to draw it.

Update November 23rd 2018

The impact of ICOs on cryptos’ value

I have had some conversations related to this during the last months.

The topic

So many companies/start-ups are opening ICO processes to fund their blockchain business. They create a business plan with a budget to fund it, the currency is in dollars/euros or other FIAT currency.

The majority enable the investors to fund the project with crypto-currency, mainly bitcoins or ethers. (It would be ironic that a company based on the block-chain will not trust the 2 main block-chain coins, right?).

The point is that the money they have raised is to fund the project that is based on real cost needs: salaries, equipment, other services. The majority of the services are paid in FIAT, so you are obliged to sell these coins in the market and then use the money for your business plan.

The questions I ask my self are

  • How many of these “sells” are provoking the market to bear?
  • Is there a real impact on the market?

Let’s do some math

I have used the data from https://www.coindesk.com/ico-tracker/ to do some basic math of the situation, and this is the result.

Let’s assume:

  • Take only in consideration the number of ICOs from 2018, as the ones for 2017 are already cashed in FIAT.
  • that the companies only enable to fund with Bitcoin and Etherium (data taken from https://coinmarketcap.com/ on August/2018).
  • Let’s assume 2 scenarios:
    • Scenario 1: 30% of the collected money is done in crypto-currency.
    • Scenario 2: 70% of the collected money is done in crypto-currency.

The math would be:

The result

Ok, the analysis is very simplified, and there could be a lot of bias on it.

But at rough estimate it looks like the impact is very low even if a high percentage of the collected funds comes from crypto-currencies.

On the other hand it’s a good bunch of dollars, isn’t it?

Quantitative trading on cryptocurrency market Q4

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

Fourth Quarter

The fourth step is defined for the next 3 months, where the main goal is to retake the back-testing and work more adjusted to a given analysis. I will also continue trading manually so I continue learning on the market momentum.

Following the V2MOM model:

  • Vision: Have a strategy running in crypto currency market running not with a period of 2 – 3 hours, but some days (stop operating at 3m).
  • Values: have fun, learn a lot, build a team with Dani, do practices and more practices.
  • Method: learn about trading basis, do backtesting with Quantopian on stocks or Forex (analyze the results in deep).
  • Obstacles: Time.
  • Measures:
    • Make short/long decisions based on 3 hour.
    • Perform backtesting with Tradingview and document the results and findings.
    • Improve and document the “mode operations” and “mode backtesting”.

Death line = September 2018

Results (October 1st, 2018)

  • Time to be accountable, let’s go…
  • I was able to perform a lot of trading during July and part of August.
  • During July I was able to earn in the total period a 33% of the money I moved. The market was plain and I was able to take profit without major rirsks.
  • The evolution of the market (bear) during August made me to be stuck inside, so almost all money was trapped.
  • I was not able to work on Quantopian.
  • I was able to apply the knowledge on stocks, and I did some shorts and long positions during August and September.
  • I have refined my mode of operations and analysis in Stock.
  • I improved the mode of operations and the mode of backtesting.

For next period, I will focus on other challenge: PgMP certification.

Análisis técnico y velas japonesas para inversores de medio y largo plazo partiendo de cero

Gregorio Hernández Jiménez

ha escrito muchos libros sobre bolsa, este es el segundo que empiezo a leer y el primero que termino, el otro aún lo tengo a medias.

El libro me ha permitido aprender cosas básicas sobre el trading que no sabía, explicación de los indicadores básicos, una guía de como integrar todo y sobre todo unas explicaciones con algunas metáforas muy buenas que son fáciles de recordar.

Todo lo que leí hasta ahora estaba enfocado en trading sobre Forex y cryptomonedas, este está enfocado en stocks, lo cual, combinado con las explicaciones básicas de indicadores me ha resultado muy fructífero en estos momentos.

http://www.invertirenbolsa.info/

Quantitative trading on cryptocurrency market Q3

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

Third Quarter

The third 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 running not with a period of 2 – 3 hours, but some days (stop operating at 3m).
  • Values: have fun, learn a lot, build a team with Dani, do practices and more practices.
  • Method: learn about trading basis, do backtesting with Quantopian on stocks or Forex (analyze the results in deep).
  • Obstacles: Time.
  • Measures:
    • Make short/long decisions based on 1 hour.
    • Read at least 1 book of trading.
    • Perform backtesting with Quantopian and document the results and findings.
    • Improve and document the “mode operations” and “mode backtesting”.

Death line = June 2018

Results (July 1st, 2018)

  • Time to be accountable, let’s go…
  • I have done more than 50 operations, being May and June with negative results. July has been with 34 operations and positive global results.
  • I have learned to trade with a bearish market, and interestingly I have issues to work with a bullish market (I short too soon).
  • I have not worked with Quantopian nor tradingview on any backtesting, this was a bid fault.
  • I discovered an interesting indicator: VPCI, Volume price confirmation indicator. It really helps to indentify real moves of the market.
  • I have been able to cultivate patience during these months, but some days I did some moves that did not make sense. I have to evolve on this.
  • I finish read one of the fundamental analysis books.
  • I have started to apply the knowledge I’m acquiring on the medium term market I work on stocks.
  • Not too much.
  • I need to retake the back testing exercises and continuing the practices.

Volume Price Confirmation Indicator (VPCI)

I have been looking for volume indicators that help me to identify the right minimum volumes to place long position, but by the moment I was not success.

This time I found this VPCI in tradingview, so let’s see how it works. The notes are very interesting basis of knowledge.

Volume Price Confirmation Indicator (VPCI)

Developed by Buff Dormeier, VPCI won 2007 Charles H Dow award by the MTA. VPCI plots the relationship between price trend and the volume , as either being in a state of confirmation or contradiction.

Fundamentally, the VPCI reveals the proportional imbalances between price trends and volume-adjusted price trends.

  • An uptrend with increasing volume is a market characterized by greed supported by the fuel needed to grow.
  • An uptrend without volume is complacent and reveals greed deprived of the fuel needed to sustain itself.

Investors without the influx of other investors ( volume ) will eventually lose interest and the uptrend should eventually breakdown.

A falling price trend reveals a market driven by fear.

  • A falling price trend without volume reveals apathy, fear without increasing energy. Unlike greed, fear is self-sustaining, and may endure for long time periods without
    increasing fuel or energy. Adding energy to fear can be likened to adding fuel to a fire and is generally bearish until the VPCI reverses. In such cases, weak-minded investor’s, overcome by fear, are becoming irrationally fearful until the selling climax reaches a state of maximum homogeneity. At this point, ownership held by weak investor’s has been purged, producing a type of heat death capitulation. These occurrences may be visualized by the VPCI falling below the lower standard deviation of a Bollinger Band of the VPCI, and then rising above the
    lower band, and forming a ‘V’ bottom.

The code

//
// @author LazyBear
//
// If you use this code in its orignal/modified form, do drop me a note.
//
study(“Volume Price Confirmation Indicator [LazyBear]”, shorttitle=”VPCI_LB”)
shortTerm=input(5)
longTerm=input(20)

src=close
vpc = vwma(src, longTerm) – sma(src, longTerm)
vpr = vwma(src, shortTerm)/sma(src, shortTerm)
vm = sma(volume, shortTerm)/sma(volume, longTerm)

vpci = vpc*vpr*vm
hline(0)
plot(vpci, color=orange, linewidth=2)

DrawMA = input(true, type=bool, title=”Draw MA on VPCI?”)
lengthMA=input(8, “VPCI MA Length”)
s=sma(vpci, lengthMA)
plot(DrawMA?s:na, color=teal)

// Uncomment this line to enable histogram
// plot(DrawMA?(vpci-s):na, color=blue, style=histogram)

DrawBands = input(false, type=bool)
HighlightBreaches = input(true, type=bool)
length=input(20, title=”BB Length”)
mult=input(2.5)
bb_s = vpci
basis = sma(bb_s, length)
dev = (mult * stdev(bb_s, length))
upper = (basis + dev)
lower = (basis – dev)

plot(DrawBands?basis:na, color=gray, style=line)
p1 = plot(DrawBands?upper:na, color=gray)
p2 = plot(DrawBands?lower:na , color=gray)
fill(p1, p2, blue)

b_color = (bb_s > upper) ? red : (bb_s < lower) ? green : na
offs_v = 0.3
breach_pos = (bb_s >= upper) ? (bb_s+offs_v) : (bb_s <= lower ? (bb_s – offs_v) : 0)
Breached=(bb_s >= upper) or (bb_s <= lower)
plot(HighlightBreaches and Breached ? breach_pos : na, style=cross, color=b_color,linewidth=3)

Litecoin

Bitcoin and  Litecoin are the global leaders in cryptocurrency, both are powered by similar technologies with the exception that Litecoin is a modified, more efficient version of Bitcoin focused on retail applications. Litecoin, as a result, is both cheaper and faster to transfer than Bitcoin but unfortunately may not be as universally accepted as Bitcoin.

Some advantages with respect Bitcoin:

  1. Faster transaction confirmation time (4x faster than BTC)
  2. Increased storage efficiency due to scrypt usage in LTC proof-of-work algorithm
  3. More coins to reward miners (84mn to be distributed total compared to 21mn BTC).

Litecoin is one of the more popular coins. They stay in the top 5 cryto currencies but during these last weeks the news about LitePay are not helping to the project (March 2018).

Litepay

LitePay was announced to be released around the end of February 2018.

Then it was rescheduled for launching at the beginning of March 2018.

Now the launch has been postponed without defined date.

Litepal

Another payment solution for Bitcoin and Litecoin with a roadmap, that I want to follow up how they deliver.

  • Payment infrastructure ready: 1/May/2018
  • Platform, meet payments: 10/May/2018
  • Developer API release: 17/May/2018
  • Series 1 – Integration: 30/May/2018
  • Series 2 – Integration: 25/June/2018