admin

  • Focusing on the Right Things

    A few years ago I had lunch with Larry Connors (who is a well-known trader and runs the website TradingMarkets.com).  We were talking about what makes great traders great, and what causes some of them to get in trouble.

    Larry said he believes that many people with a real "edge" fail to exploit it because they get bored.  The personality trait that helped them develop their system often leads them astray; they focus on finding new things rather than on making money with what they know works.

    As I think about this, I have a slightly different explanation.  Most systems with an "edge" only have a small edge.  That means that successful traders suffer frequent set-backs, drawdowns and situations where they did everything right, but still lost money.  It is natural for them to use their natural talents to avoid unnecessary pain, right?

    Most successful businesses balance operational excellence and making money now with research and development (which helps ensure that they will make money in the future).  So, it makes sense that the best traders continue to grow, learn, and make new and better distinctions.

    One of the Siren songs of trading, though, is that the fear of losing has so much gravity that it often pulls focus from more productive endeavors.  In other words, there is a difference between "working on a problem" and "working towards a solution."

    Focusing on what you are trying to avoid is distracting and painful.  In my experience, the best results come when the focus is on what you want.

  • Focusing on the Right Things

    A few years ago I had lunch with Larry Connors (who is a well-known trader and runs the website TradingMarkets.com).  We were talking about what makes great traders great, and what causes some of them to get in trouble.

    Larry said he believes that many people with a real "edge" fail to exploit it because they get bored.  The personality trait that helped them develop their system often leads them astray; they focus on finding new things rather than on making money with what they know works.

    As I think about this, I have a slightly different explanation.  Most systems with an "edge" only have a small edge.  That means that successful traders suffer frequent set-backs, drawdowns and situations where they did everything right, but still lost money.  It is natural for them to use their natural talents to avoid unnecessary pain, right?

    Most successful businesses balance operational excellence and making money now with research and development (which helps ensure that they will make money in the future).  So, it makes sense that the best traders continue to grow, learn, and make new and better distinctions.

    One of the Siren songs of trading, though, is that the fear of losing has so much gravity that it often pulls focus from more productive endeavors.  In other words, there is a difference between "working on a problem" and "working towards a solution."

    Focusing on what you are trying to avoid is distracting and painful.  In my experience, the best results come when the focus is on what you want.

  • The Rhythm of Writing

    Writing_250_p
    Here is a trick I use to write better and more naturally. It is called "timed writing" and it has been easy and effective for me. This post will briefly describe how it works.

    First, pick a song to listen to while doing the exercise. Then I get a piece of paper and a pen. When the song starts, begin writing. Don’t type or use a computer. Don’t pause, don’t stop. Don’t think. Don’t correct your spelling or grammar. Just write. If you can’t think of anything else to write write whatever you say to yourself; even if it is "what should I say here?" But, don’t let the pen stop writing until the song stops.

    Second, use another song to review what you wrote. When I do this step, I cross-out things I didn’t like. I make notes, annotations, draw lines connecting one paragraph to another, insert comments or write trigger words. Sometimes I outline a different idea flow. But I don’t stop until the song stops. This is a great time to check the intention and attitude of the piece. Sometimes I look at a paragraph and ask myself "what is this supposed to say?" And I write the answer. It is often a great headline, lead-in, or summary. When the song is over, I often take a break to clear my head.

    The next step looks similar to the first. Put on a song, and re-write the whole thing … from the beginning … with the new structure, comments and whatever else comes out in the process. By this step, the piece is usually dramatically better than it was the first time. However, a few more changes often happen when I re-enter the piece into the computer.

    Handwriting seems to access different parts of the brain and creative process than typing does.  Somehow the combination works for me.  Try this and let me know what you think.

  • The Rhythm of Writing

    Writing_250_p
    Here is a trick I use to write better and more naturally. It is called "timed writing" and it has been easy and effective for me. This post will briefly describe how it works.

    First, pick a song to listen to while doing the exercise. Then I get a piece of paper and a pen. When the song starts, begin writing. Don’t type or use a computer. Don’t pause, don’t stop. Don’t think. Don’t correct your spelling or grammar. Just write. If you can’t think of anything else to write write whatever you say to yourself; even if it is "what should I say here?" But, don’t let the pen stop writing until the song stops.

    Second, use another song to review what you wrote. When I do this step, I cross-out things I didn’t like. I make notes, annotations, draw lines connecting one paragraph to another, insert comments or write trigger words. Sometimes I outline a different idea flow. But I don’t stop until the song stops. This is a great time to check the intention and attitude of the piece. Sometimes I look at a paragraph and ask myself "what is this supposed to say?" And I write the answer. It is often a great headline, lead-in, or summary. When the song is over, I often take a break to clear my head.

    The next step looks similar to the first. Put on a song, and re-write the whole thing … from the beginning … with the new structure, comments and whatever else comes out in the process. By this step, the piece is usually dramatically better than it was the first time. However, a few more changes often happen when I re-enter the piece into the computer.

    Handwriting seems to access different parts of the brain and creative process than typing does.  Somehow the combination works for me.  Try this and let me know what you think.

  • Market Commentary as of May 2, 2008

    The Bad News:

    The Good News:

    Somehow the market is finding a way to rise.  It is often tough to remember, yet price is the primary indicator; and it is going up.  That is a good sign, especially during periods of apparent bad news.

    This was another solid week for the major Indices, with virtually every index taking out their respective downtrend-lines for the week. Barron’s called it the best finish of 2008.

    The S&P 500 finally closed above the 1400 level for the first time since early January. If it holds, that upside breakout moved the S&P 500 out of a three-month trading range into an intermediate recovery.  The next major test likely will take place at its 200-day moving average and a trendline drawn over its October/December highs.

    Here is a similar chart of the NASDAQ.

    080502_nasdaq_resistance

    Please answer the poll below.

  • Market Commentary as of May 2, 2008

    The Bad News:

    The Good News:

    Somehow the market is finding a way to rise.  It is often tough to remember, yet price is the primary indicator; and it is going up.  That is a good sign, especially during periods of apparent bad news.

    This was another solid week for the major Indices, with virtually every index taking out their respective downtrend-lines for the week. Barron’s called it the best finish of 2008.

    The S&P 500 finally closed above the 1400 level for the first time since early January. If it holds, that upside breakout moved the S&P 500 out of a three-month trading range into an intermediate recovery.  The next major test likely will take place at its 200-day moving average and a trendline drawn over its October/December highs.

    Here is a similar chart of the NASDAQ.

    080502_nasdaq_resistance

    Please answer the poll below.

  • Do you like a good cup of coffee?

    Senseo_250pI use a Senseo … and I love it. Great coffee or tea, a cup at a time, when I want it, with no clean-up.

    Last week I got an e-mail from the company that makes these gourmet coffe machines. As a marketing experiment, they are giving away the Senseo to "influencers." To get yours, follow the link and let them know that you like tea and coffee and that you don’t yet have a single-serving coffee maker.

    This is the link to get your Senseo.

  • Do you like a good cup of coffee?

    Senseo_250pI use a Senseo … and I love it. Great coffee or tea, a cup at a time, when I want it, with no clean-up.

    Last week I got an e-mail from the company that makes these gourmet coffe machines. As a marketing experiment, they are giving away the Senseo to "influencers." To get yours, follow the link and let them know that you like tea and coffee and that you don’t yet have a single-serving coffee maker.

    This is the link to get your Senseo.

  • Loonie Commentary on the Dollar

    Canada_cocky_loonie Funny thing happened to me in Canada this week as I got off the plane and exchanged some money. I gave them $140 US – and they gave me $126 Canadian. Huh? That’s Loonie.

    As the Fed hints it may stop easing and the dollar may be bottoming,  an article on Bloomberg notes that "futures traders are betting for the first time since December 2005 that the dollar will gain against the euro."

  • Loonie Commentary on the Dollar

    Canada_cocky_loonie Funny thing happened to me in Canada this week as I got off the plane and exchanged some money. I gave them $140 US – and they gave me $126 Canadian. Huh? That’s Loonie.

    As the Fed hints it may stop easing and the dollar may be bottoming,  an article on Bloomberg notes that "futures traders are betting for the first time since December 2005 that the dollar will gain against the euro."