Process–it doesn’t sound exciting, but it’s maybe the most important part of what we do. In fact, it’s the Holy Grail in trading: having something you can replicate year after year that will bring consistent results–this is how a successful trading program is built.
Following up on yesterday’s process post, I thought it might be interesting to give you some insight into my weekend process for the analytical work behind my research I write for Waverly Advisors. I reduce the question of trading/investing to this: where can we best take on risk? What does that risk look like, and how will we probably need to manage it? That, to me, is the essence of tactically-motivated trading.
There was a lot I didn’t talk about here. I covered my in-depth weekend work, but not the daily monitoring or updating, and I also did not look at swing trading process. Maybe we will hit some of these in the future, but I just wanted to give you some ideas you can adapt for your own work. Last, this works for me, but it’s my process, not yours. You can take parts of this and make them your own, but I don’t think anyone can take anyone else’s process and use it without some serious adaptation and change. Consider this a starting point.
- I think in four big baskets: stocks, interest rates, currencies, commodities
- What happened last week?
- Next, drill into assets
- Stocks
- Global relative strength
- Big shifts?
- Individual charts
- Currencies
- Any drivers?
- Big shifts?
- Individual charts
- Commodities
- Energy, Metals, Foods, Softs
- Big shifts?
- Individual charts
- What do quantitative tools say? What might they see that I am missing?
- What does intuition say?
- Keep good notes.
- This is not a linear process, so be prepared to backtrack and re-think.
- Driving toward an answer to this question: Where can we deploy risk?
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Enjoy the show:
For what it’s worth – I’ve been working in and around the markets since 1990, and have read plenty, seen a lot and heard many. Your thoughts, writings and advice is among the best, most down-to-earth, emphasizing essentials that I’ve seen.
A compliment is always in order, because it motivates and guides the recipient in a positive manner. More importantly, I think your work could and will help many others. Thus, feel free to use my compliments and recommendation in your marketing.
Juhani, very well said.
And it also deeply reflects my opinion.
Thank you for your kind words. I’m so glad you’ve found my work useful and worthwhile!
Agreed. I would also add that your podcasts (and posts in general) are becoming much more thorough as of late which has been instrumental in answering some key questions.
Your views gives us a light to set / refine our approach & process ! Process insights are highly Appreciated ! Thank you !