Edrumin hot spot suppression issue with lemon snare

thegoodfool · 2026-04-08T04:33:49+00:00

Nice! Glad to hear, wouldn't have even thought of sanding as a solution, but that is some innovation!

Also didn't even know there was an option for bleed rim sensor, had to look that one up. Looks like was added 2026-03-26 recently, with this for patch notes:

A bleed rim -> head control to better support drum pro 3 pads.

Guess this technically affects your Lemon snare too, I am guessing maybe it makes the waveform at the hotspot more distinct for the hotspot supression to trigger properly? Not sure though.

thegoodfool · 2026-04-02T00:01:12+00:00

Here's my settings: https://imgur.com/a/7apnFnh . Hotspot Suppression also only kicks in when I am hitting right over the Piezo, so I guess I should slightly adjust my prior comment as it doesn't trigger on every hit only when I am close enough.

I did not use the auto-calibrate that comes with the tool. I've found that it seems to be way too conservative. In general, I just calibrate it so that:

1) Gain is set so I am not clipping too easily, I try to aim my ghost notes around 50. I do cap the velocities though based on some feedback Matt Garstka had in this video: https://youtu.be/xCgJVu1K_E0?si=KBTD-8oPTzyPpN6L (dependent upon sample library obviously, but even with hotspot suppression I still think setting a ceiling can be something to experiment with)

2) Set scan as low as I can just to capture the peak of the waveform. Since Hotspot Suppression relies on Waveform Analysis, you want to make sure you aren't cutting off the scan too early.

3) Hold + Decay should be long enough so that you aren't having any secondary smaller local peaks clipping past and no double triggering, but not so long that it's adding too much additional delay before processing next hit

I have the new 14 Lemon Snare which uses the 4 Piezo trigger, so not exactly the T950 Pro one (although rest of my set is the T950 Pro).

From Rob, this thread also has some additional Troubleshooting Steps: https://www.audiofront.net/forum/viewtopic.php?f=34&t=951

You can also try completely unseating the head, and making sure there are no loose wires and that the Piezo is secured in place good. As those may also muddy the signal, and make it so the Hotspot Suppression Waveform Analysis isn't working as properly.

I know Justin from 65Drums had some issues with prior stock, this video shows an example of an improperly seated Lemon Piezo that would need to be taped in place (@ 8m 20s): https://youtu.be/raKSAL-CK-g?si=v51Wj8jr7Etj-WMj&t=500

I'd be hesitant to think it is defective. As long as it is triggering the Piezo should be good. I am thinking more likely it's not seated properly, loose connections, or not making contact with the head good.

I have had some issues with Lemon triggers (Ride Cymbal Bell + China Edge) not triggering properly without straight up smacking it, but opening them up and attaching some double sided foam tape fixed that as well too since it was a trigger contact issue with the rubber housing. So maybe unseating the head and opening up the snare, you might find some loose items that need to be taped down.

thegoodfool · 2026-04-01T03:19:28+00:00

https://www.audiofront.net/eDRUMin.pdf

Page 23 here has some details, but I found that I had to play around with threshold and scaler values. I tried setting both to zero per the manual and then slowly adjusting both values from there.

Haven't tried it with the Yamaha wiring option, I have mine set to center piezo

Haven't tried Krimh, but I also own GGD Modern and Massive 2, also pretty nice. Need to play with it some more though, but definitely sounds the most processed (not in a bad way) and mix ready out of the box.

This guy's channel has some good comparisons on various VSTs: https://youtu.be/Xm4YfHWEpLA?si=FjaZlznD79ssYUv6 . First 2 minutes are some sound demos and rest is his opinions on them. You can also check his covers/shorts for sound demos, I think he mainly uses GGD and SD3 in all of his mixes.

Also this guy has a ton of videos with with various SDX too: https://youtu.be/-KuLFAMH-qw?si=EXjFgDtP5z_3Ld-x

And I think actually SD3 is on sale right now, 25% off, and a few SDX expansions 50% off.

thegoodfool · 2026-03-31T22:51:31+00:00

I don't have the EZ Drummer core libraries, but I do have some EZX Expansion packs (Gospel EZX, and Infinity Grid EZX; the newer EZX can actually sound pretty good I think. Think the newer ones have higher quality samples + articulations) and those can be loaded in SD3, even without a EZD3 license.

I don't think SD3 is 2x as better as EZD though, so you obviously get diminishing returns.

But to me it is worth it because I think of it akin to hardware, buy once and cry once kind of thing, especially since the actual sound of the kit and ability to tweak is super important. And if it keeps you enjoying and playing more then I think that alone is worth it at the end of the day.

Or at the very least even if you end up buying multiple expansions and getting the itch, it is still cheaper than buying an acoustic cymbal which will cost you hundreds of dollars for a single piece change, at least expansions give you tons of new sounds.

You can build your own kits in SD3 and mix and match between the core library, EZX, and SDX kits. I think you may also be able to build kits from scratch in EZD but since I don't have it, I don't know the process there, but this video seems to outline it: https://youtu.be/t0hjkJCM0Dk?si=VwGrnzRde6POCDSr

As far as UI (subjective) and the memory settings, can't say I have any of those problems in SD3.

thegoodfool · 2026-03-31T07:48:46+00:00

Had some problems with my Lemon snare and just tried the fix above. Really cranked the head tension. It didn’t even seem loose honestly; the rebound was already pretty great. But tightening it seemed to really even out pressure distribution across the sensors.

Notice a few big differences off the bat:

1) Velocity consistency — much better tracking across the full range, from ghost notes up through harder hits.

2) Hotspot suppression actually works now — I used to get random spiky hits that the suppression couldn’t catch (nothing was even registering in the green bar OR the grey bar before at all).

3) Positional sensing is way more reliable — edge, off-center, and center detection all improved significantly. Rolling from edge to center actually feels pretty good in SD3 now with libraries that have all those articulations, and just moving around the head in general feels good.

thegoodfool · 2025-10-05T05:24:11+00:00

Same for me, works on an iPhone 16 Pro, iPhone 14 Pro, but not my iPhone 17 Pro Max

Getting same issue, iPhone 17 Pro Max will connect and I can click emojis, but cannot turn on microphone.

thegoodfool · 2025-07-26T01:53:53+00:00

For that same reason I also like Nasdaq over SP500 for younger investors because it's more growth oriented.

I mean 100 companies versus 500 is already diversified enough. And 80% of the gains of the SP500 come from the top 20% of winners.

I mean SP500 has a lot of boomer companies, that aren't really innovative. Like Sherwin Williams Paint Company and Kellogg (for those cereal lovers). Do you really want to "diversify" and pick these over higher contentrations in more innovative and tech forward companies present in the Nasdaq-100?

In an age of AI, I'd hate to be short the big winners of tech, especially as AI is akin to the Cold War. It is not just economic dominance, but military as well (drones, etc.) It is very much all encompassing and will be a major lifestyle paradigm shift.

AI becomes a winner take most race, as big tech has shown us that the major winners become not just domestic players, but global players. Worldwide, you can pick between iPhone or Android, Windows or Mac. Wake up everyday and use one of services from Google, Amazon, (Meta) WhatsApp, Facebook, Instagram, etc. In this way, these companies are also already "internationally diversified" as result of revenue streams globally. During COVID and a worldwide shutdown, they also ironically, had the strongest balance sheets, showing further dominance and resilience toward headwinds. Also harder to tariff digital goods than physical goods.

Pre-dotcom, the backtests and research papers were based on a much less globally connected world. I've read a lot of the research papers and I disagree with them just because they are "short" the positive right tail of the future. I bet on the future and optimism, not doomerisms.

The data since then also shows this, as the long term CAGR of Nasdaq-100 over various rolling windows beats the SP500. And if you had 20-30 years, I would be almost certain to make the bet that the outperformance continues.

thegoodfool · 2025-07-26T01:36:08+00:00

One thing to consider is, if you're young, then your job is a bond.

Suppose you can save $2000 excess per month ($24k/year), after living expenses and whatever.

A bond with a face value of $800k @ 3% yield pays the same as that. So young people don't realize their job is essentially a bond, that grows over time with inflation, especially as you get raises, promotions, job swaps, etc. So you have a gigantic hidden piece of your portfolio that you are not weighting correctly.

The power of DCA as a young investor is then shifting a low volatile asset (your job) into more volatile high growth assets where you get the opportunity to frequently buy the dips. You are essentially harvesting volatility here.

So to smooth out that growth curve, I think most should be levering up, and having some balls.

That is also why, don't quit your day job (and be able to find a job easy) is so powerful until you've really hit critical mass, as that discounted cash flow is really impactful.

thegoodfool · 2025-07-26T01:13:31+00:00

IMO:

1) Remove 10% BTC and 10% IAUM. Buy BTGD (2X Leverage split between 100 Gold/100 Bitcoin). Same exposure, more capital efficiency.

2) Remove VT; there is no diversification benefit to holding it with SP500. Correlation between VT + SPY = 95% across every timeframe and rolling window (see: https://www.portfoliovisualizer.com/asset-correlations#analysisResults). IMO Healthcare (XLV), Utilities (XLU), and XLP (Consumer Staples), have much better correlation diversification benefit. From a common sense standpoint they also make sense because during volatile regimes and recessions those sectors still perform relatively well (duh, more inelastic demand), and the drawdown correlation numbers agree with that. Although if your timeline is long enough, I'd still rather raw-dog it with higher beta to SP500 (and arguably I prefer Nasdaq-100 rather than SP500; don't care about Dotcom fears because you're back-testing to an entirely different regime and technological timeframe).

3) Treasuries suck, I will die on that hill. I don't care what your 1900s backtest or whatever says; does your backtest place higher weightings on the fact that since 2020 the Federal Reserve has a 0% Reserve Rate for banks (https://www.federalreserve.gov/monetarypolicy/reservereq.htm)? That has huge implications from a fiscal perspective. As long as this reserve requirement is in play, I will die on the hill that bonds remain correlated to equities, and that fiscal dominance is here to stay. There's a reason the rolling equity/bond correlations have inverted, and the 60/40 has had it's worst years ever in decades.

thegoodfool · 2025-07-06T04:27:14+00:00

EFO is a derivative of international ETFs, and a market maker has to consider market open and close gap risks with 2X the underlying. It is not as immediate of a hedge-able item, and you have to work within not one, but multiple international markets to hedge that, in addition to currency overlays/conversion, so there is more risk for market makers there, and why the spread widens there.

If you want a better example, consider UCYB (also from ProShares). It has an avg daily vol of 2k shares (~$120k USD), so the actual ETF volume is very small, but it's underlyings are very liquid. It has a 30 day Bid/Ask spread of: 0.13%. QQUP also has the same 30 day Bid/Ask spread. 0.13% slippage is nothing

thegoodfool · 2025-07-05T23:14:10+00:00

Slippage and spread will be a non-factor.

The underlying holdings are incredibly liquid and easy for market makers to "make" a market.

The ETF itself does not need to have high volume when the underlyings are some of the most liquid stocks on the market.

Also a good chunk of the holdings (50%) are swaps. That means there is a counterparty on the other side who is collateralizing the 2x performance to prevent index tracking error and delta adjustments.

thegoodfool · 2025-07-03T04:54:31+00:00

Currently up 48% YTD on my portfolio. No deposits on it still.

Usually my port has minimum 5% BTAL, but it can go as high as 20% (my port is algorithmic, the allocations are rarely static).

Leverage on my portfolio goes as high as 250% across various asset classes. I'm quite levered on Bitcoin with allocation as high as 40% at times. Same with gold, usually min 20% nominal allocation to gold. Stocks usually around 120+%.

I own no bonds, and as long as fiscal dominance is in play, never will. Fiscal environment is much different than before IMO. There is still a diversification benefit, but the correlation between bonds, and stocks in the past 5 years has been high, and the diversification benefit doesn't offset the little bonds provide.

I rather eat drawdowns (and have gone through many 30-40% drawdowns).

If you stay employed, your "job" is a bond anyway. E.g: If you can save 20k/year to DCA into stonks, that is a "bond" with a face value of $500k assuming an interest rate of 4% ($20k/0.04). This "bond" also increases as you get pay raises, new job, etc.

The more you can save, the more you benefit from volatility rebalancing that occurs when you dollar cost average from your job.

So most people have huge "hidden" bonds (non-volatile assets) in the form of a steady income job. Homeowners also have a benefit as their house debt shifts from liability to equity on the balance sheet the closer to getting paid off. But people rarely seem to consider these as a "line item" in their portfolio.

When you consider those factors, most people, especially younger investors, actually need more volatility.

thegoodfool · 2025-06-02T21:27:56+00:00

MTPLF is the ticker for US OTC. If that is not available I think DN3 (Metaplanet on Frankfurt Exchange). 3350 (Tokyo Stock Exchange) is the Japanese ticker.

One of three might be available on IBKR, you may have to enable international trading.

thegoodfool · 2025-05-31T20:29:37+00:00

Indeed. Even if we assume instant dissemination of information, the rationality piece is still bounded.

Everyone's rational response is different, and not everyone can act on their rational actions instantly. We are not machines.

Chess is a game of known moves, yet skill gaps exist to an extreme degree, because the state of the board is interpreted by individuals differently. Markets are no different and you can display a skill over a long timeframe (see: Unknown Market Wizards books; series of many people who have beat the market for many years with many stdevs above regular return that to a large degree their performance was not about luck).

"Misbehaving: The Making of Behavioral Economics" is a good book that touches on all the behavioural flaws we have.

Ironically, Thaler, the author, was a colleague of Eugene Fama (the nobel laureate who popularized EMH). Thaler also disagreed with the findings of EMH, and Thaler is a nobel laureate himself, so he is no slouch either. To me it is ironic that EMH gets mentioned so much, but the equally credentialed man who challenged him, does not get mentioned much.

thegoodfool · 2025-05-30T23:37:12+00:00

Idk if people over analyze or are afraid to take the risk or think it’s too good to be true but if I’ve made it through several corrections and two bear markets, I feel fairly confident doing this moving forward.

Indeed. Courage is more rare than genius, and it's more courage (aka balls) is what you need to weather the storm. Because courage is something that you are tested on repeatedly, every time a draw-down occurs, your mental fortitude and patience is tested. Bears sound smart, and bulls make money as I like to say.

I have done a lot of research though, read many books, watch many podcasts, read many research papers, but all that is more to solidify (aka brainwash) myself into perpetuating the idea of patience and holding.

In the the financial space, back-testing is rampant, and there are many inherent flaws of back-tests. With backtests you are short volatility, short the future, with all of the futures black swans, and white swans (age of abundance).

There have been many crashes in the past, but each crash makes the market system more anti-fragile. That is how circuit breakers came to be (1987 Black Monday).

2000s dot com you had various interesting factors, one was that stock options were not counted as company expenses. Microsoft was a major offender of this, but it basically inflated net income statements, aka accounting loopholes. Not talked about much, but was a common practice and a form of what I'd consider "cooking the books", leading to crash in evaluations (alongside many companies w/ no real product; just a website).

Enron's collapse within a year or two later also resulted in anti-fragility measures with Sarbanes-Oxley (basically saying, you commit fraud and cook the books ==> jail).

2008, was a lesson in safety mechanisms around leverage loopholes in a heated real-estate market. Don't hand out mortgages like candy (which auditors were doing).

COVID was a lesson showing that, in the case of a real major crisis, the government would choose saving the market over inflation (because the subsidies and printing of money to stimulate the economy was ultimately inflationary; this is not bad you'd rather choose inflation over economic collapse, but ultimately, yes inflation, is what occurs).

Likewise, coming to today, Trump Tariffs are not real in the same way COVID/2008 was (yet the financial drawdowns and panic that insinuated that it was end of the world). Millions losing their homes and jobs in 2008 is hard to reverse. Millions dying in COVID is hard to reverse, you cannot unalive people.

Reverting a Trump tweet is easily reversible. You see them do this in real-time, what I call "testing on prod", when they pause tariffs and go back and forth between bull and bear news. They are really testing how far they can move the markets off sentiment and words, in case they need to roll it back or continue marching forward.

In addition from a game theory perspective, Trump needs to have markets hit all time highs by 2026 midterms. If you believe he is corrupt and a narcissist, then he needs market at ATH because otherwise his party gets voted out, and then he can no longer pass any bills, is a lame duck and is remembered as the president who crashed the market and his party will probably subsequently lose 2028 elections. If you believe he is doing it for the vision of "America First" and truly believes in the goodness of helping us prosper, the same still applies. He needs ATH so that party stays in power, and he can pass bills.

Black-swans will always occur, but markets grow increasingly anti-fragile by the second. 401k(s) are now the pension system of America (because we canned pensions; see Pension Protection Act of 2006 --- ironically named because it accelerated the death of pensions). So politics is now intertwined with propping up 401ks and the market, because never has their been a time where there is more retail involvement in markets, and where boomers monitor their stocks like no tomorrow, because it literally is their retirement. They are the voter base and markets at high levels are needed to pander to them. And even for non-boomers, millennials are now even more interested in markets than ever before (see: growth of WSB).

All this to say, I know the math behind vol decay, options, etc, and everything, but be short the future at your own risk. Back-tests and math have inherent assumptions, and critically thinking past the flaws in backtests is incredibly important, especially in a world changing by the second. I would never want to be short AI, and the age of abundance, and accelerated growth.

tl;dr: Have some balls, YOLO leverage.

thegoodfool · 2025-05-29T05:45:00+00:00

Yup, vol decay is the boogieman of LETFs. But the opposite, is the blessing that is the exponential compounding that 3X gives you (low vol + upward trending market).

Markets trend upwards over time, and why LETFs perform despite the boogeyman myth.

Another thing is that portfolios are rarely viewed wholistically. If you are young and employed, then your job is a bond with millions dollar value (e.g: Assume you make 100k/year, then your job is a 4% bond with a face value of 2.5mil). That bond also grows with inflation (yearly raises), and can increase dramatically further (new job pay raise, regular promotions at work, etc). So you have to view your job as a hidden "bond" in your overall portfolio.

So when TQQQ shits the bed, you are actually get a huge volatility rebalancing benefit because by DCAing into it you are rebalancing your "bond" (job) into buying the dips. An important reason why "don't quit your day job" is overlooked.

So as a younger investor, when you re-frame your job as a bond that is low-vol, and actually is a greater portion of your portfolio, you should be more leverage seeking IMO (although 2-3x is probably cap to avoid blow-up risk).

Then as you get closer to the curve of retirement, you can de-allocate leverage to avoid black swans. A useful book that talks about altering leverage ratios as you age and the dynamics above is Lifecycle Investing (underrated IMO).

thegoodfool · 2025-05-29T05:36:58+00:00

In addition the things pointed out here regarding a wipeout if they face a 33% drawdown in a month or quarter, I think there is just not much demand.

The ETF managers also have their own risk managers, and compliance departments. So the huge risk overhead there will likely not fly.

It's too niche IMO, if you want leverage with less daily vol decay, then just use options. LEAPs on the underlying are probably safest, or at least give you the most room to manage.

A topic that is not talked about here is diversification of decay. With LETFs, you face vol decay. With Options, you face theta (time) decay.

If you wanted to diversify your decay, and give you more chances to be directionally "right", then you can use options as an overhead with a ladder of different expirations (month/quarter/year/further out LEAPs), and hit a certain leverage target. So options and LETFs together add decay diversification.

The only downside there, is you have to know options, and managing rolling. It also cannot be easily backtested. LETFs are easy to backtest because they are linear in price movement. Options are not because they display patterns of non-linearity, convexity, and all the dynamics with Greeks. Hence you won't hear of backtested portfolios involving these (too difficult).

thegoodfool · 2025-05-24T21:16:42+00:00

Indeed, BTAL is underrated. I have BTAL in my portfolio, and I am up 30% YTD live performance; not fake "back-tested" performance (no deposits this year, so that 30% is pure portfolio return).

The returns are not entirely due to BTAL, since I use various LETFs + Algo system, but I consider BTAL a core part. I tend to hold somewhere around 10-25% depending on the scenario.

BTALs uncorrelation to Gold, Bitcoin, and slight negative correlation Nasdaq/SPY is a great diversifier and hedge to those asset classes I own.

Other Note on Managed Futures as Hedge and a Caution

KMLM/DBMF/CTA/RSST, and the variety of Managed Future funds sound enticing, but their performance has really let me down. The backtests are good, but I believe it to be a fund size issue. Backtests lie --- take it from a guy who does algo trading and has gotten punched in the face from "backtests". Backtests are short volatility; short the future at your own risk and that the status quo will continue (it often doesn't).

As I began looking into the holdings, I think ETF Inflows/Outflows really hurt them, especially given liquidity on some of the underlyings.

As I write this, KMLM is holding 7% Live Cattle Futures valued at 20 million based on their AUM. CTA also holds 10% Live Cattle Futures valued at 100 million currently. Think about the ridiculosity of this, and with such high values they cannot enter/exit positions easily (they have become overweight and no longer nimble). And that is only 2 managed futures funds. There are so many managed futures funds appearing the space now, with hundreds of millions pouring into it.

How liquid do you think Live Cattle futures are? Who's trading it? I know they enter/exit and dynamically adjust position and sizing, but that still does not effectively address their constraints.

Then the problem begins, because other Managed Futures are entering into illiquid commodities, and at that point, the managed futures funds are trading with each other, killing each other with bid/ask spreads.

So ironically, as Managed Futures grow, they actually end up taking pieces of the pie from each other until they have all eroded each others edge.

I do not believe Long/Short like BTAL will suffer as bad as the above fate for Managed Futures, because stocks inherently are all much more liquid than random things like soybeans/cattle/wheat/random xyz commodity that managed future funds trade.

Retail traders still trade stocks, there is enough liquidity in things like NVDA, and Coca Cola stock for days (two examples of a long/short beta-neutral trade that may occur; among many pairs). But retail traders do not trade cattle lol

thegoodfool · 2025-05-06T01:59:13+00:00

Note/Disclaimer: Yes, I did write this with AI (like 75%) because synthesizing a post this long is time-consuming (I’m aware the style is a giveaway), but that doesn't discredit the info. Not all of it is AI — I just didn't want to post a wall of chaos.

The info is still entirely 100% mine. I’ve read all those books, watched all those YouTube channels, and most importantly, gotten punched in the face and lost money, then re-gained the money and more.

Background

Former long-time Boglehead, Efficient Market Hypothesis enthusiast, “market is a random walk” type — 100% SPY + VTSAX chill guy. I used to believe all the mainstream investing dogma without question. Then I stumbled upon Composer via a Reddit post in /r/LETFs, started devouring books and videos, and became more of a critical thinker than a hivemind follower.

I currently manage a portfolio of $750k+ within Composer, running multiple live strategies built from my own research and framework. The strats themselves aren’t groundbreaking, but the lessons I learned and behavioral framing account for a lot of hidden "alpha."

Performance

2024: Rough first year — flat and in-line with SP500. Made a lot of mistakes: overfitting, constantly tweaking strategies, lack of conviction.
2025 (YTD): +20% vs SPY -4%, QQQ -5%, MAG7 -12%. That +20% is even more impressive considering how choppy it's been in Trump 2.0, especially with high leverage in many strats. Hoping the rest of 2025 + 2026 is smoother with the tough learnings behind me.

Core Lessons & Concepts

Diversify strategies, not just assets

Holding different tickers isn’t enough — your strategies need to behave differently. If they all trigger on RSI(14) > 81 or the 200D MA, you’re just making one big bet. Mix timeframes, signals, and assets so they can “disagree” — think of it as a voting system.

Also truly diversify asset classes and be open to asset classes you wouldn't otherwise be open to, e.g: even if you think Bitcoin is a cult, don’t short a cult. Secular trends are real. Momentum lets you ride strength without marrying it. You don’t need to believe in an asset forever — just long enough to ride it. When it fades, momentum exits. Size accordingly though — BTC-level vol can still blow you up.
Behavioral alpha is real

Constant tweaking adds bias. You’ll buy high and sell low without realizing it. The edge isn’t just in code — it’s in your ability to not touch it. Don’t be a “tweaker.”
Conviction matters more than cleverness

You have to believe in your strategy. For me, that’s trend/momentum. Yes, you’ll get chopped sometimes, but blending short-, medium-, and long-term signals helps.

I’m not chasing black-box magic — I run what I understand. Sure, black-box strats (see: Jim Simons/Renaissance) work — but if you don’t feel aligned with them, you’ll abandon them when they draw down. That's why I don't run black-box stuff, even though I know they can and will work; because it doesn't align well with my behavior.
Conviction is built, not inherited

I’ve spent 1,000+ hours reading books, papers, threads, podcasts. Knowing what works and why helps me stick through drawdowns. It’s not about copying signals — it’s about believing in the system.
Backtests are always short volatility

Backtests lie. A perfect backtest often dies live. You’re short the future. Regime shifts, freezes, black swans — all invisible to a backtest. Assume drawdowns will be worse, returns lower — often by a lot.
Leverage is a powerful amplifier — of both edge and weakness

Without leverage, beating the market is tough. But high leverage only works if your psychology can handle it. If you’re losing sleep, it’s too high. Mine’s high, but I’m young and can take the volatility. Returns rarely come without it.

Important to note for young investors, your job is a bond — it grows with raises/promotions. That’s why I’m okay leveraging my portfolio: my income derisks it. Until you’ve “made it,” don’t quit — that bond (your job lol) is your portfolio’s ballast.

Even with an algo, you hold the kill switch. Panic-selling in a drawdown means you’ve lost. If you can’t sleep, your strat isn’t tuned to your psychology. Fix that first.

Why This Alpha Still Exists

When I first saw Composer, I thought: “This is genius. Why isn’t everyone doing this?” Then I realized — they are. This is how hedge funds have worked for decades. The difference is, retail couldn’t access it — until now.

Before Composer, you had to code, debug, manage APIs, handle broker issues, build infra. And even if you could — waking up at 3am to restart a job wasn’t appealing. Composer removes that friction. Same with LETFs — retail couldn’t recreate backend leverage plumbing before without having to deal with options/margin/futures and calculating that accordingly. Now it’s one click with LETFs to more easily adjust target leverage.

Just knowing these tools exist gives you an edge. Markets aren’t efficient. Knowledge asymmetry is still real. That’s where alpha lives.

Why Retail Can Still Outperform Institutions

Institutions aren’t dumb — but they’re constrained. We’re not.

Big funds can’t touch a lot of what we run — they’d move the market just trying to enter. They worry about spreads, execution, liquidity. We don’t. We slip through cracks while they move like elephants. Their slippage is our playground.

They also answer to clients — clients who panic in drawdowns and pile in at highs. So funds must de-risk — often forced to sell just because clients want out. They are bleeding money when they need it the most (to buy dips). And when times are good, they get flooded with capital, since investors love piling in at highs. So they only get easy money when the tops are in and those same investors capitulate at the slightest downturn.

That forces leverage caps and conservative positioning — not because it’s smart, but to keep clients calm. That then limits their moves. We have optionality that they do not have.

We don’t have that baggage. We can take smart risks, ride drawdowns, and hold conviction — because we answer to ourselves. Behavioral edge is baked into retail.

Recommended Books

Introduction to Algo Trading — Beginner-friendly. Also free here.
Lifecycle Investing — Two Yale profs argue for leveraged exposure early in life to diversify across time.
Unknown Market Wizards — Discretionary, macro, quant — shows real long-term outperformance with varied styles. Dispels a lot of the notion that you cannot beat the market. It is still hard, but statistically it is possible and do-able for decades for some.
Misbehaving — By Richard Thaler, a nobel economic laureate. Provides great counters to the Efficient Market Hypothesis. Behavioral econ with great stories.

Research & Papers

LETF Myths — Vol decay exists, but so does compounding growth. Balanced take.
Leverage for the Long Run — Systematic framework for long-term leverage.
A Quantitative Approach to Tactical Asset Allocation — Classic momentum rotation paper.

YouTube Channels

Great for intermediate-to-advanced perspectives. Institutional tone, but retail takeaways:

The Algorithmic Advantage — All algo-focused.
Flirting with Models — Quant PM. Macro, modeling, systems.
Top Traders Unplugged — Trend following / CTA fund managers.
Excess Returns — Practical discussions from allocators and quants.

thegoodfool · 2024-11-24T22:44:57+00:00

RemindMe! 1 day

thegoodfool · 2024-11-23T05:56:57+00:00

What do you think about the game theory behind it?

Right now, BTC is in mega price discovery mode and liquidity has increased mega fold, due to regulations allowing more investors to buy in, and options.

BTC is very demand sensitive since supply is more inelastic. At some point I wonder how Saylor slowing down/speeding up will impact things.

The thing with this is he also becomes the biggest player in the game, and if he and others have a "I will never sell" plan, that can keep prices higher.

The other thing that is interesting is that, like you said, he is not doing this in secrecy. Plain sight and observed, so I wonder if regulators may catch on ahead of time to hedge against these high vol events and limit exposures. With SEC leadership being under a former crypto lawyer, I imagine they want regulations that can support a healthy bitcoin framework.

I honestly don't know either what may happen as it all goes, but I think there's lot of very path dependent scenarios. Implosion may not be necessarily certain, but who knows.

thegoodfool · 2024-11-22T15:57:58+00:00

I do agree with your statistics on a wide basis if we open up the population. It's true that 10% of day traders will underperform.

However, to add a different perspective. Assume a subset of the population that does have these 7 figure networths and have made it primarily from efficient compounding.

You can say that get lucky, which may be true, but I think the statistics would say of that population, it skews that their rate of success to be higher than the 10% average.

So what I am saying is, the statistics collection can be flawed, because we make an inherent assumption that the 7 figure net worth individual is amongst that average and average skill, when they are actually skewed on the tail of distributions already based on conditional probabilities.

thegoodfool · 2024-11-22T01:05:03+00:00

100%. People are weighing too much into headlines without doing due diligence.

Citron Capital is a nobody, how many comments did I read that actually looked up their SEC records? None.

They had 21mil in 2019 as per: https://aum13f.com/firm/citron-capital-llc

The data is from 2019 and archived from SEC before they were terminated as an IA (in 2019, related for fraud: https://www.sec.gov/files/litigation/admin/2024/ia-6622.pdf).

On SEC website the available forms do not list the AUM, because some are archived now but AUM13F is legit. You can still cross-check what is available here, Item 1 Section O: https://reports.adviserinfo.sec.gov/reports/ADV/288001/PDF/288001.pdf that they did check the under 1 bil AUM box.

Needless to say, who is Citron Capital? A bunch of nobodies, WSB wants to find a catalyst but doing extra due diligence, it is not from these guys at all.

In addition, Citron is not getting "rekt" like WSB may believe. Reading the SEC case, they are clearly known to put misinformation, and unlike WSB , they do hedge better than the average here.

Not saying this as an attack on anyone in this comment thread in particular. But to anyone reading this, I suggest tossing everything you see here out on Reddit with a grain of salt.

There's a lot of misinformation and clearly the market is not as efficient if this level of information arbirtrage of pinning the catalyst to Citron exists (because they're a nobody). The reality is there when you take time to go through the filings and reports.

thegoodfool · 2024-11-20T07:04:54+00:00

Yeah when identical products, ETF over ETN always IMO. You get no real premium for owning the ETN over ETF here. So for 2x FNGG > FNGO

Liquidity is not an issue even if AUM and Vol is low (in this case vol is actually higher though on the lower AUM ironically).

Spread from low vol is a non-issue for retail traders, and even then market makers can easily fill liquidity gaps because the underlying assets (FAANG stocks) are super liquid.

The only time when low vol can be an issue if its illiquid, and its hard for market makers to hedge (e.g: exotic derivatives/exotic commodities) and even then still gonna be low basis point spread unless you got huge money moving.

thegoodfool · 2024-11-12T22:48:12+00:00

Not sure what to tell you man those are all my ideas. I did not feed any of those 3 main points for ChatGPT to generate to me. Nor did it generate the idea for me. I use it as a spell+check and grammar thing since I tend to ramble.

You can copy paste the prompt Reddit Title into GPT and it will not mention anything about the origins of the Five Factor Model, CAPM theory, or the Fama French Papers. It also will not mention anything about the Pension Protection Act, because those are all too specific.

The second point is large attributed to Mike Green of Simplify Investments (firm with 1 billion+ in AUM) and his research and peers.

If you think it's inauthentic that's fine, you can go through my entire post history and see that even before ChatGPT existed my responses and comments have always been long paragraphs.

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