As we slowly move out of summer and into the end of the year, you’ve probably noticed my blog has picked up in activity. I want to share some things we’ve been working on behind the scenes, and tell you what you can expect over the coming year.
I started blogging here in 2011. Over these years, this blog has evolved into a true resource for developing and working traders. There are many different kinds of blogs, and many of the examples of technical patterns were written from then-current markets—in fact, there’s a treasure trove of pattern analysis in live markets that doesn’t exist anywhere else on the internet.
But one of the challenges of creative work is figuring out how to move forward while keeping a sense of connection with our past work. I’ve struggled with that quite a bit in recent years—anyone can keep churning out meaningless podcasts, trivial ebooks, and meme-ridden blog posts that basically say nothing, but finding my voice, evolving it with my thinking and evolution as a trader, and making that work relevant and useful to you—that’s a much harder task!
But I’ve done it. Let me tell you a bit about what’s coming soon.
New focus, new directions
My work, over the past decade, has focused heavily on the perspective of the well-capitalized trader/investor. Many of my clients are institutional advisors themselves, wealth managers, hedge funds, or large professional traders.
There’s a lot to be gained from this perspective—understanding the primal importance of risk management, how hard it is to maintain an edge, why process matters… the list goes on and on, but there’s also something to be said for the little guy. The individual trader, maybe developing trader, with a smaller account has some possibilities that are not available to the big guys.
My work might have lost sight of that, but, with the help of a new partner we’ve brought into the business, I’ve been challenged to think in new ways. Ironically, this is exactly where I started in the 1990’s: looking to make solid returns with a smaller amount of capital.
To this end, I’ll be creating more tools and ideas that show how someone can responsibly work with smaller accounts. One of the immutable laws of the universe is that there’s a connection between risk and reward—it’s impossible to get very high reward without also taking high risk, but there’s a little bit of “magic” in a small account.
That magic is that a small account can take a risk that is small dollar-wise, but not-so-small on a percentage basis… and the return works the same way. For someone with a smaller account who understands how all this works, the results can literally be life-changing.
My work for most of the past 10 years has also focused heavily on multi-day swings. I continue to think that many traders should focus on that timeframe, for many reasons. But I’m also going to focus back toward active, intraday trading. You’ll see a reflection of that, and resources for intraday traders, on this blog.
Know how to read the news. Understand fundamentals.
One of the ways my institutional advisory has evolved in recent years is that I have shown more of the fundamental work I’ve always done behind the scenes.
I see much confusion over fundamentals—of course, news doesn’t help because every economic report is treated as something groundbreaking. (The opposite is true; most are meaningless, and even very significant measures are often full of noise that must be ignored.)
People look at the wrong fundamentals, apply them in the wrong way at the wrong time, and confusion reigns supreme. (Does valuation matter for a short term trade? Should I avoid high PE stocks? Etc.)
Over the next year, I’ll share some of the tools and procedures I use to gather, analyze, and understand fundamental and macroeconomic data. With the Economy and markets perhaps at an important tipping point, this work may be very important in coming months.
Your trading–your journey
Statistics, probabilities, and data are very important, but all that matters in the end is what you do with them.
To that end, expect more posts that focus on your development and challenges as a trader. For me, this means going out on a limb a bit and exploring some more subjective topics, but I’m excited to face that challenge.
Of course, one of the perils of focusing on subjective experience is that it’s easy to lose sight of the cold, hard facts of the market.
Don’t worry. That won’t happen here. We will also dig even deeper into patterns, tools, and tendencies that you can build your trading career around. We will be reaching further in both directions.
Old and New
Over the past few months, I’ve spent a lot of time with the original Wyckoff material. Though I’ve read all of this before, it’s been a while, and I was surprised to see how many of his concepts had found their way into my trading and analysis.
I do think there’s an opportunity here. One thing I have to offer the trading community that is almost unusual is my education and experience working on the modern edge of traditions. I have classical training in French cooking, and my first career was as a professional classical musician. In both of those traditions, the best practitioners find a way to respect tradition while breathing new life into it.
If we go too far afield, we abandon the wisdom of tradition. If we don’t innovate , tradition becomes stale and irrelevant.
One concern I’ve had with modern technical analysis is that modern analysts (not so much traders… who are focused on what works with laser intensity) parrot the sacred writings of the fathers of technical analysis without adjusting for the modern world.
I have some very good ideas for how to move these traditions forward, drawing from my deep experience in the arts and the culinary field, and we will explore those ideas together in the coming months.
A personal note
On a more personal note, there are exciting things happening behind the scenes. As I said above, I used to be a classical pianist and composer. After a decade away from music, I have spent the last several years rebuilding my (classical) piano technique. I’m now composing and writing music, apparently (who knew?) seriously. I think this will be a much-needed creative outlet.
Also, keep your eyes peeled for the next stages of MarketLife. Within a few weeks, we will be launching new tools and new products. (The official release of our options work is just around the corner.) Some of these will be reserved for our MarketLife members, but some of them will be freely available to everyone, but there are things coming that no one has seen before.
The podcast will be starting its second season soon. I have some topics to explore here (and on the blog) that I’ve never touched on before… so much new stuff coming!