BC TRADING
Saved by @vsamk

A former CIA math genius built a quantitative trading fund that earned more than $100 BILLION for investors.

At 66% return/yr, his track record destroys that of Warren Buffet, George Soros, Carl Icahn, and every investor who ever lived.

The Smartest Billionaire in Finance:

 1/28
If you'd have put $100 into Jim Simons' Medallion Fund in 1988, it would be $400M+ today.

By contrast,

$100 in the S&P 500 in 1988, would be $2,000 in 2022. (roughly)

Let that sink in.
2/28
Jim Simons's Medallion fund has had unreasonably high annual returns of 66% across 30 years.

For comparison, Buffet clocked in at about 20%/yr.

Many funds don't make that in a lifetime.
3/28
Even during the financial crisis of 2008, it made a net return of 82.38%.

They make so much money for their investors that they charge 44% in management fees.

The industry standard is 20%.
4/28
It uses math calculations to decide the bulk of its trades, & none of the market trends apply to how it performs.

It wins by finding order in chaos.

The fund is managed by Renaissance Technologies, the parent company founded by the mathematical genius Jim Simons.
5/28
No one knows how it makes so much money, and their algorithms are one of the world's best-kept secrets.

And the fund is so secretive and exclusive, that no one can invest in it. It closed doors for new investors in 1993.
6/28
The fund was getting so big, so fast, he’d swallow Wall Street at that rate of compounding.

However they had to stop allowing new investors, otherwise it was getting too big and it's every trade moves the markets.
7/28
The real reason behind Medallion Fund's super-real profits is that it's run by the world's best scientists and not traders.

Simon's earliest recruits came from his connections at the CIA and IDA -America's intelligence bureau.
8/28
Jim Simons is known as the greatest of all times.
9/28
For example, during the pandemic, their primary 2 funds open to outside investors had negative returns:
1. RIEF: -22%
2. RIDA: -33%

In contrast, Medallion had +76%

Who is part of it?

The inside renaissance people, including ex/current employees + Simons himself.
10/28
The missing piece, is the story of why Medallion Fund exists, and how Simons changed the stock market by introducing mathematical predictive equations to the world of finance.

Today, most trading companies use AI built on mathematical predictive theories.
11/28
He changed the way stock market functions by building codes inspired by predictive theory.

Today it is the backbone of AI and machine learning. The system exists everywhere: From how world analyses the stock market, to sports performance, Google's algorithm, etc.
12/28
And so how Medallion makes money, in not through some superior understanding of finance, it is pure maths.
13/28
Their moves control the market. Their style seems chaotic & aggressive, but it's carefully calculated by supercomputers, powered by some of the most ingenious codes.

Their success rate is about 50%, & they move millions of dollars in and out of the market, fast.
14/28
No one to date has been able to trace their strategies.

But we know that the code powering the fund includes several million lines, working as a single unit.

They don't follow any market trends, and seem mostly 'random' to everyone, including competing firms.
15/28
Best part? Jim Simons is not even a finance guy.
Before founding Renaissance, Simons worked for the CIA, to help them crack Soviet codes during the Cold War.

Before Simons' code breaking models, the CIA hadn't cracked Soviet cryptic messages in over a decade.
16/28
The team behind the Medallion Fund, had the smartest mathematicians and scientists of that time.

1. Leonard Baum: Best known for Baum–Welch algorithm & Baum–Sweet sequence.

2. James Ax: Made groundbreaking contributions in algebra and number theory using model theory.
17/28
Together, they built a huge database of stock market pricing behaviour, going all the way back to WW2.

It wasn't easy, because this was the 1980s, and the data wasn't organized by computers yet.

They relied on news, and other traditional fundamentals.
18/28
Simons introduced computers to the stock market.

Him and his team bought hundreds of books from the World Bank (the only place back then with the financial data he needed) and manually fed data to their computers.
19/28
Their goal was simple:

To develop the strongest quantitative algorithm, they needed to study the market's entire history and find 'anomalies' in the market to predict behaviour in places no one looks.

Their computers were the first to create that record
20/28
This gave them access to live market prices that no one else in the hedge fund world knew at that time.

The genius stroke:
Applying Baum's predictive mathematics to the huge pile of data their computes now had. They could predict even the wildest of market fluctuations.
21/28
Some principles they follow:

1. Find a pattern that seems like an anomaly.
2. There’s no data like more data.
3. Don’t ask why, just follow the prediction.
22/28
It's common practice in the financial market for players to occasionally develop great strategies and sweep the market.

But competing firms quickly trace the methods and eventually kill the strategy.

This has not happened yet at the Medallion Fund.
23/28
Medallion is able to achieve this secrecy, because Renaissance's high-profile hiring is infamous for signing strictly confidential NDAs with employees.
24/28
The team keeps a very low profile, and very less is known about this small group of scientists.

But we know that their vast wealth is greater than the GDP of many countries.

Also, the Medallion money heavily influences US politics. Even today 👇
25/28
In 2017, Simons asked Robert Mercer (then his co-chief executive) to step down from his position.

Simons is a democrat, and Mercer spent $25 million of money earnt from Renaissance as the Republican party's biggest contributor, in the 2016 campaign backing Trump.
26/28
In the same year, Simons donated a total of $26M during the 2016 elections, of which $16 million went to Hillary Clinton.
27/28
Medallion Fund is still outperforming every other fund.

Renaissance faces pitfalls. In 2021 investors yanked $15B out of it's funds that are open to investors.

But Jim Simons printed his money, retired in 2009, and probably collects his Medallion Fund returns 🤷‍♂️
28/28
If you learn something from this story, retweet the first tweet to share it with others.

Follow me @ValKatayev for more. https://t.co/FVeD9wNM7J
Sat next table to Jim Simons and @JoeBiden at a fundraiser some time ago. Then he went up to speak.

Jim’s story was so fascinating, I had to write it.
Correction: Jim was a code breaker at NSA, not CIA. Mixed up my alphabet soup.
I started to put up video content on Instagram and TikTok, follow me there.

Links in bio.

More from Trading

Robot James
Robot James
@therobotjames
In my 20 years of trading I have noticed this cycle play out again and again with traders that "make it":

1. Overconfidently reach for returns
2. Get humbled by the market
3. Simplify + concentrate on clear, high probability edges.

1/n

Nearly everyone starts with a lack of respect for how hard it is to consistently make money trading.

That leads them to pass over high-probability sources of returns in favor of more marginal ideas.

Or they overcomplicate the trading of a good edge.

2/n

Here's an example...

It is 2015. You look at a simple strategy.

You hold an equal dollar exposure to:
- Cap Weighted US Stocks (VTI)
- 20+ Yr US Treasury Bonds (TLT)
- Gold (GLD)

And rebalance each month.

(I've extended back a bit with mutual fund prices.)

3/n


It made money consistently with a few blips.

You'd have 4x your money from 1997 to 2015.

It makes sense. It's harnessing two big sources of risk premia (equity + duration).

It diversifies across 3 macro assets that tend to outperform in different econ environments

4/n

But, naturally, you turn your mind to how you could do better...

And here is where it gets dangerous!

There are good ways to try to "do better", and there are bad ways to try to "do better".

5/n
TRADING
Aditya Todmal
Aditya Todmal
@AdityaTodmal
DJ @ITRADE191 multiple chart analysis for INTRADAY TRADING.

1. Core setup
2. Pivot points trades
3. PDH/PDL trades
4. Open interest addictions combined with rejections on charts.
5. Website to confirm bias

Very quick read.

Share if you liked for the benefit of everyone.

•Main setup of @ITRADE191
He used this setup daily for all trades.

1. EMA crossover 10/20
2. Supertrend 10/3
3. Vwap
4. RSI >


•Volume always greater than


•Candle Rejecting from


•Pivot settings
STOCKLEARNINGS , TRADING , DJ SETUP
Advertisement
Emperor\U0001f451
Emperor👑
@EmperorBTC
Technical Analysis Masterclass- Part 2

'Entering the trade'

Entering a trade without ascertaining a certain things is gambling.

In this masterclass we will learn the pre-requisites to enter a trade.

DON'T ENTER A TRADE WITHOUT DETERMINNG THE FOLLOWING.

Please share.

We understand what reward to risk (popularly called risk to reward) is.
It will be denoted by R:R.

We will also try to bust a few myths about R:R and how to avoid losing trades.

Before entering a trade, you need to determine 3 things.

1. Entry trigger
2. Stop loss
3. Target

1. Entry trigger = Reasons for entering a trade. There could be multiple reasons or a single reason for entry.

Generally a set of reasons AKA confluence is a higher probability trade and a generally a safer entry.

Example of an entry trigger.


2. Stop Loss.

The price in the opposite direction of the trade where the trade is exited, at a loss.

At this level, the reason for the entry becomes invalidated according to TA and the price can then move in the opposite direction, probabilistically.


3. Target is the possible price level that the asset might touch based on previous trends or confluence AND where a possible reversal could occur.

Target is the next path of least resistance from where the price might reverse.

We will always ONLY use TA to determine all 3.
TRADING
Yash Mehta
Yash Mehta
@YMehta_
Option Trading is very difficult to master as there are so many things to understand.

Here is a master thread related that will help a beginner to understand about Options Trading.

A complete course worth Rs 50K for free.

1/ A detailed thread on basics of Option Greeks and how it impacts Options


2/ Basic Option Trading Strategies:

There are many option strategies to trade. But keeping your strategy simple is the key.

In this thread, all the basic option trading strategies are being


3/ What are the things that you should look at before taking any Option


4/ Is Option Selling Possible with Rs 1 Lakh Capital?

Even a beginner can start trading in option selling with capital as low as Rs 1 Lakh.

What are the techniques one can use and how to mitigate the infinite loss risk is shared in this
TRADING
Nick Drendel \U0001f981 \U0001f6a2
Nick Drendel 🦁 🚢...
@StockTrickNick
If I stuck to this one rule the day I started trading I would have...

• Saved $1,000's of dollars in losses.
• Sped up my learning process.
• Avoided every major account drawdown I've had.

If you're new to trading, make sure you stick to this 👇🏼

The 1% Rule 🧵

The 1% Rule states that you should risk, at most, 1% of your total account on every individual trade.

This 1% risk is a function of two flexible components:

• Your Position Size: % of your account in the trade
• Your Trade Risk: % between your entry price and your stop loss

Want to take a larger position size? Make your stop tighter.

Trading a volatile stock? Size down on the trade.


The most important aspect of trading is risk management.

It's great to make money, but worthless if you don't have a system to keep it.

Over 50% of my trades are losses, but I'm still profitable because of the 1% Rule.

Keep losses small & let winners run!

"Nick, 1% risk isn't enough, my account is small."

New traders are EXACTLY who benefits the most!

By limiting each trade's potential losses to 1% it will take you:

• 29 straight losses to fall 25%
• 69 straight losses to fall 50%

It's tough to be that consistently bad 😅
TRADING

You May Also Like

Vibhu Vashisth
Vibhu Vashisth
@VIBHU_Tweet
Do you know?

The Golden Shine on the artificial jewellery of modern times is a gift by Nagarjuna.

Now,u might be wondering,who is Nagarjuna?

Nagarjuna was the name of an ancient Indian scholar&scientist whose name is associated with the fields of Alchemy,Chemistry& Metallurgy.


He conducted a number of alchemic and Metallurgical experiments directed towards transforming base elements into Gold.
According to Eduard Sachau's Alberuni's India, Nagarjuna was termed as a Metallurgist who was born 100 yrs before Alberuni's time, who was born in 973 CE.


According to some records Nagarjuna was born in 9th century CE near Somnath,Gujarat and according to some Tibetan & Chinese sources he was born in Vidarbha,Maharashtra from where he later migrated to Deccan region.


Edward Schau quotes in his book,'They have a science similar to Alchemy and Nagarjuna is famous for this science which they call as 'Rasayana'.

Nagarjuna's book 'Rasaratnakara' is one of the earliest documented texts on Alchemy,Chemistry & Metallurgy in Sanskrit.Nagarjuna successfully discovered through his experiments the alchemy of transmutation of base metals into Gold.This was not real gold but a gold like substance.
ALL
Patrick Chovanec
Patrick Chovanec
@prchovanec
I'm going to do two history threads on Ethiopia, one on its ancient history, one on its modern story (1800 to today). 🇪🇹

I'll begin with the ancient history ... and it goes way back. Because modern humans - and before that, the ancestors of humans - almost certainly originated in Ethiopia. 🇪🇹 (sub-thread):


The first likely historical reference to Ethiopia is ancient Egyptian records of trade expeditions to the "Land of Punt" in search of gold, ebony, ivory, incense, and wild animals, starting in c 2500 BC 🇪🇹


Ethiopians themselves believe that the Queen of Sheba, who visited Israel's King Solomon in the Bible (c 950 BC), came from Ethiopia (not Yemen, as others believe). Here she is meeting Solomon in a stain-glassed window in Addis Ababa's Holy Trinity Church. 🇪🇹


References to the Queen of Sheba are everywhere in Ethiopia. The national airline's frequent flier miles are even called "ShebaMiles". 🇪🇹
CULTURE
Advertisement
Naval
Naval
@naval
How to Get Rich (without getting lucky):

Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.

Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.

Ignore people playing status games. They gain status by attacking people playing wealth creation games.

You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.
LIFE , STARTUPS , NAVAL1
Jacques Favreau
Jacques Favreau
@betaorbust
For the record: that's not a "strong work ethic."
That's exploiting young unattached engineers and spinning it as "team culture."

Toxic 💀💀


That's not something to aspire to. That's not good management. If you're working sustained 70+ hrweeks, somebody is taking advantage of you.

We have fetishized the overworked engineer. It's toxic but so pervasive that Mr. Ng (and others) feel it's ok to advertise as a positive.

Having this as "culture" breeds a monoculture of unattached, young engineers. Not good for them & not good for your company long term.

It's not good for them because their first job burns them out and physically wears them down. This happened to me and many of my coworkers.
ALL
Michael Dearing
Michael Dearing
@mcgd
An irony of facebook's situation.

Sheryl got her MBA at Harvard. One of the most famous cases (Extra Strength Tylenol) in one of the most famous classes (Business History) she took: in 1982, someone put cyanide in Extra Strength Tylenol capsules and killed 7 people in Chicago.

What do you do when someone turns your product into a weapon? When they use the system you built to harm? James Burke, CEO of J&J, was shockingly open with the public, he pulled the product and made significant packaging changes to make product safer (but not tamper-proof).

He over-shared every step along the way re investigation, redesign, stood up as both CEO and human. The reintroduction of new Extra Strength Tylenol succeeded. Burke saved the brand.

But four years later it happened again. A killer put cyanide in the capsules, this time a woman in Yonkers died. Same CEO, Burke, pulled the product again, completely changed the form factor from capsule to caplet and relaunched *again*. It worked *again*. How'd they do that?

Burke (CEO) tapped J&Js goodwill bank account w/ the public. Two big withdrawals from that bank account in four years + 8 dead bodies! But his honesty, openness, humanity (choked up about the deaths more than once), humility kept the goodwill bank balance positive the whole time.
TECH


Category Partner: Enkryptopedia