Monthly Archives: November 2012

The next big web thing and how it relates to trading…

Do you know what the next ‘big’ thing will be on the web? It’s busy happening now.

Formerly, if you weren’t a programmer and you wanted to combine information to show something new then you needed to spend a stack of money developing something…

However this gap between coding knowledge and creativity is closing. As long as you have the idea you will soon be able to create it. Someone else will provide the glue – all you will need to do is have the idea to stick it together. Go look at www.ifttt.com for a great example of this.

Let’s take a commonly known portal like Stocktwits who have just released an API. What this means is that you can trigger events off of things happening – what about trades? Let’s say you want to see the consensus view on EURUSD and you’re aware that often the consensus is wrong so you are interested in taking the opposite position.

I’ve spent some time reading the EURUSD stream on Stocktwits and have been very surprised to see what people are doing i.e. maybe I’m not so terrible after all – can I somehow use this insight into the behavior of others? Why not? I’m sure you smart people out there can extrapolate from here.

During a webinar a couple of months ago the presenter called for an app that only showed what ‘crappy’ traders are thinking/doing. They were/are using this as another information source since if there’s a lot of noise about a certain play it may mean they have less inclination to actually trade it. The herd is usually wrong so avoid the herd, right? Smart or what?

So eventually I stumbled across a mobile building app thing called Infinite Monkeys.

What I’ve done is taken the feeds of a number of twitter people who have consistently shown their ability to call false breaks (i.e they post positions that actually become turning points) and collected them together in one single app which I can watch on my phone.

Do you know of any particular names/traders on twitter who deserve a place on this platform? Please comment so I can add them!

All contributors will be able to download the app for free or just subscribe or something. It just took the idea and some small amount of time. It wasn’t difficult. At all. Really – it took me 10 minutes, I’m not posting about this to sell/promote an app but I did it to re-enforce the following point. Go make your own even!

This type of ‘mash-up’ has been happening in the creative sphere since I was a kid – yes, I remember when sampling was new and the internet only came in green.

Now the same revolution is coming to data. Every business critical system we use at work is driven by a database – whether it’s on a server or on ‘the cloud’. The people who can use, run, interrogate and leverage the data at my place of work are the ones that run everything or are making steady career progress.

This might be Salesforce where you are or some other tool whether it’s for CRM, production or stock management. You may be a hell of a nice guy but the guy who can look at the data and answer the question intelligently without having to first guess is soon going to be your boss…

So the data is coming. Your intelligent analysis, your ability to use/filter and slice this information will become increasingly central to your success.

  • We are not knowledge workers anymore – if you want knowledge you can Google it
    • When programmers get stuck that’s the first place they look!
  • Platforms are evolving to a point where all the data will soon be accessible

All those pop-psych books like ‘Freakanomics’ (so many of them) or the genius of Steve Jobs (people will pay a premium for an elegant PC that just works) come down to insight and finding the truth that others can’t see.

Unless you’re a niche, niche, niche specialist you’re now (pretty much) a commodity

Knowledge was power

Insight is now power

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Blog update for November

Well that’s just super… WordPress ate my blog so this is a re-type… hence it’s going to seem curt, short and to the point. I can’t remember the jokes from the first version either but take it from me they were hilarious 😉

It’s been two months since my last post and I’ve pretty much taken my brain out of the whole ‘trading’ subject. Ok, that’s a lie. What I’ve been doing is attempting to re-frame how I think about the sharp end of this topic which is placing and managing trades. This has resulted in me realising a few things about the contents of my own brain which I’ll go into.

Developing non-attachment

Really what this comes down to is that I’m too attached to the outcome associated with an action.

This is supremely ironic because in my day job (project manager) I’m very much at home with making decisions and proposing a course of action. Where I think this falls over in trading is that I’m way too attached to the outcome…

‘Attachment is the origin, the root of suffering; hence it is the cause of suffering.’

In my meditation practice being attached to the outcome of a situation means that you fail to see it clearly. That filter of attachment introduces fear, doubt and uncertainty which makes for sh**y trading decisions. Getting in too early and then getting out too early are big ones for me.

So I’ve spent a lot of time re-framing how I perceive myself when trading. In fact what I’m attempting to do is develop what’s called ‘witnessing consciousness’ which is the dispassionate observation of the ‘chatter’ in your own mind. This isn’t trading without emotion, this is avoiding being triggered by emotions that do arise – think of this as being able to look at yourself doing something from the outside.

This leaves room for intuition/fear/emotion etc. but it means that you’re looking to create a ‘gap’ between feeling and action which is based on trading experience and reason. It’s an attempt to short circuit your screaming monkey brain which is trying to throw pooh at the monitor 😉

Being here now…

I have consistently attempted to push my life forwards and then gotten incredibly frustrated when it’s failed to move at the speed I’d like. I’ve recently realised what a waste of energy this is and my disappearance two months ago was really the result of me throwing my toys out of the pram to go and sulk…

There is no good time to start anything new. Waiting for the perfect moment or opportunity to start doing something is preventing you from starting. The trick is simply to start because inevitably you’ll get there a lot sooner because whatever it is that you want to do will probably take you longer than you think anyway… so just start.

If I’d have waited till I knew everything about exercise and nutrition before starting to go to the gym I’d be in even worse shape now if I’d never have started. As it is – seven years later – I’m in the best shape I’ve ever been and I still don’t really know as much as I’d like about what works or doesn’t work for me. A couple of things I’ve tried recently have paid off but again, this is seven years after I began by puking up trying to run round the local park.

Probably because it’s more cerebral and not physical I’ve delayed really starting to get my head around trading till fairly recently – I have been waiting for perfection when it’s clear that may only be reachable in a few more years. The learning isn’t in the learning, it’s in the doing.

So there needs to be a lot more doing.

Forget about the future

I have literally no idea what my life will look like with respect to trading two years from now. What I do know is that thinking/planning/worrying or being concerned about it now is a complete and utter waste of time and effort.

The thing to focus on is the trade I will place tomorrow, then the one after that, then the next one.

In a number of years (as with going to the gym) I will be able to think back to this point and think ‘Aha! look how far I’ve come’. Being overly concerned with the end goal now is a total waste of time and inhibits my freedom of action/movement.

These three things are the same thing

Fear. Fear of making a mistake whether it is with regards to trading or any other topic. Having some idea that I’m able to get to a point of understanding or ‘completion’ in trading/life is essentially an illusion. As with all things you have to engage in experiences and then learn along the way as part of an iterative process. Had I had less fear/concern about the future I’d have got laid a whole lot more by now too…

In my work life I’ve pretty much had enough of these that I know what works. In going to the gym all this time I’m finally getting there where I know what works for me nutritionally. In trading this comes down to knowing way more theory than learning from real experiences.

So the way forwards is to practice non-attachment, to be unconcerned with the distant future and place one foot in front of the other. Then one day I’ll look up and find I’m at the top of the mountain.

Thanks for all the comments / encouragement over the last few weeks. There will be a number of blogs coming out in the next week with stuff I’ve stumbled over as well as some decent trades too so stay tuned and thanks for your patience.