It’s been a while since I’ve written here. You’ve probably seen the weekly updates, under the Markets Unlocked tag—these have been useful, high-level summaries of market conditions and things we’re watching for the week ahead—as useful for me to write them as, I hope, it is for you to read them!
But I’ve also been wanting to write a bit more here on a number of other topics. Today, I’ll share some of my recent projects and some things you’ll be seeing in the future.
As many of you know, I was a musician before I was a trader, a classically-trained pianist, organist, and composer. For more than ten years, I did nothing with music, focusing on trading and on building my advisory business. In late 2016, I decided to return to music, to see what I might still be there. After a few years of intensive work rebuilding my piano technique, I decided to write music again.
This project has been fulfilling beyond my expectations. I’ve produced some music I’m really excited about. You can check out my composer’s website here. I’ve also had multiple conversations with non-musicians who want to understand a bit more about how a piece of music is constructed, so I plan to do some more writing along those lines in the future.
This work has reminded me of a few things: first, I think there’s so much value in creating something. If there’s real magic in this world, it’s probably in being able to envision something that doesn’t exist, and then shepherding it from that state of non-being into realization. To be a part of that process, a conduit, is an incredible rush. Second, it takes real work to build the skills needed to do meaningful work in a field. Though I’ve been extreme critical of the 10,000 hours pop science trope, it certainly takes many thousands of hours to build competence, let alone expertise in a field. You’re not going to do something well unless you’re obsessed.
It’s also worth considering how much time creating something takes. In the case of music like I write, every detail is precisely prescribed. I’m somewhere in the middle of the spectrum of fast/slow composers, and there are many hours of work behind each minute of music you hear—sometimes multiple rewrites and much destruction to get to the finished product! Again, it’s hard to do this unless you’re obsessed. I recently finished this Sonata for Violin and Piano, which was a first milestone I had set for myself, and am taking some time to focus attention on a few other projects. But one thing has become crystal clear to me in the two years I was writing music intensively—there’s great value in living the creative life.
Though you might find trading to be a stark contrast to creativity, you would be wrong. There are actually powerful parallels between shaping raw material in a creative framework and the act of extracting profits from financial markets.
I’m a bit of an unusual trader because my trading has spanned pretty much all liquid asset classes, and timeframes from very short intraday to long-term. My initial success was in intraday trading (first, currency futures and the S&P), but I have focused more on multi-day holds over the past ten or fifteen years.
For me, at least, trading is a balance between the new and the old. You want routine when you are trading—you want to see the “same old stuff” over and over. If you’re always seeking novelty and excitement, you’re probably not going to make money. Good trading is boring. But I also have to be pushing some new horizon to keep my entire being fully engaged. Over the past several years, I’ve been contemplating two directions for my trading: into more systematic/algorithmic approaches that would be “hands off” after the development stage (though there is usually a good deal of management involved with getting systems like this to produce stable returns), and to return to purely discretionary intraday trading.
Obviously, these are somewhat opposed perspectives, and I don’t think anyone could work on both of them at the same time with real focus. In the last quarter of 2022, I decided to devote considerable time and energy to re-learning how to trade intraday index futures.
I’m not quite ready to talk about this venture publicly. My natural inclination is to teach and to structure thought in such a way that it could be taught, but I am feeling a strong call to be a practitioner here, first. I’ve shared some big picture ideas with our MarketLife family, but have been (and will continue to be) pretty veiled on the details of what I’m doing and how I’m trading.
There certainly will be a time to talk about all of this publicly, and I’m incredibly excited about what I’m learning and experiencing. I’ve gone back to first principles, and have built an approach from the ground up. For those of you who know my work, you’d immediately understand much of what I’m doing: we’re assessing trend strength, trading around consolidations, using relationships of multiple markets and timeframes to get a directional edge. I’ve also added a significant component of trading within noisy ranges; these are areas I’ve studiously avoided for over a decade. While there’s nothing wrong with that approach, I explicitly decided that I wanted to have tools to address intraday index action in all of it’s phases. Since “slop and chop” is the norm, it’s a good idea to have an approach tailored to that environment!
What does the immediate future hold? The struggles I’ve been facing (and, let’s be clear on this, they are real and significant! I am winning and I will win, but this has been far from easy. One does not take 15 years off of trading index futures intraday and then slide back into it without missing a beat!!) have provoked me to take another look at writing that book on trading psychology.
I’m holding off on putting pen to paper, because one aspect of this re-learning is that I’ve been able to sink back into the Beginner’s Mind. I think the insights I will carry away from this experience will be a core around which I can craft a book that may transform the field of trading psychology. Soon, but not yet.
We also are planning to experiment with offering some materials that should directly aid short-term traders (i.e., daytraders). MarketLife has very precisely focused on trades that last a few days to a few weeks at the outside, because it has been my experience (backed up by the experience of many large and successful traders) that this is one of the better timeframes for traders. There’s perhaps a stronger edge here than in most other timeframes. But, I do know there’s a hunger for shorter-term information and focus, and, since this is how I’m living much of my day, it allows us to serve these traders with a new focus. Look for this to launch sometime in the next few months. We will likely do an initial trial run, to see how it is received by the public, and also how it impacts my work flow. More on that soon.
I’ll try to write a bit more here over the next few months, and will be a bit more present on Twitter. I apologize for the long absence, but there’s a time for everything–and certainly a time to focus inward. For anyone with a public-facing persona, it’s a real challenge to find the time to do the work to create something meaningful, while also telling people about it! I’ll keep looking for that balance, and I thank you for your patience.