confusing markets

Well, I’m down to one swing position now… the other four were stopped out. All five trades were entered about a week and a half ago. It’s unfortunate that I started trading long systems right when everything started plummeting!

As I need income, I was going to start day trading again on the side, but today’s market didn’t look good for that. Maybe I’m just out of practice after a few weeks away from day trading, but once I saw confirmation from other sources, I decided to stay out of it today. It’s no surprise I’ve used today’s downtime to read about market-neutral strategies! The suddenly sound pretty attractive! :-)

Mini-Reviews
Well, I finally finished Fooled by Randomness : The Hidden Role of Chance in Life and in the Markets. While I thought it was eye-opening in places, it never really got around to giving much advice on what could be done to profit from random effects. He says he personally tries to profit when he knows others will be fooled by randomness. Just doesn’t say how. The most practical advice I noted was: 1) Use stops, and 2) be aware that you might have a successful strategy, or you might just be lucky. All that just boils down to “be careful.” I don’t want to put the book down too much, though, as the book is only tangentially about the markets (because that’s his profession, so he draws a lot of examples from them).

Now, I’m several chapters into Paul Wilmott Introduces Quantitative Finance. I’m fairly new to the deep quant stuff, so it’s very interesting to me. Of course, a lot of the early examples make use of interest earned on proceeds from short sales. I don’t know of any individual brokerage account that actually passes those benefits on to you (although I’m more aware than ever that they probably make interest on my short sales–or at least they would if I held ‘em more than a day!). As an aside, while grabbing the amazon links, I was shocked to note that amazon sells it for $44, when I bought my copy from a Borders for $60+! In the spirit of quantitative finance, I can’t help but think there’s some sort of arbitrage opportunity in there somewhere.