What I'm Reading..And, Thinking About
One of my New Year’s Resolutions was to finish more books than I’ve started. Well, I didn’t start any new ones this week, but I didn’t finish any either. I did read quite a bit of Flow by Mihaly Csikszentmihalyi. For me, this one hasn’t been a quick read. I find myself doing a lot of underling, dog earring, and stopping a lot to think. I think getting into a state of “flow” is important as a trader. I’ve often talked about automatic responses, almost as if “out of body” experiences when trading well. Now, I know that I’m not crazy (well, at least not when it comes to these experiences). These are normal, and actually quite desirable, states of mine that we enter when executing properly. Following the process is important, regardless of the short-term outcome, is key. I think if you can do this, you’ll do fine longer-term. I’m sure a lot of this will find its way into my Master Trading Psychology course. I’m thinking “flow” combined with not being held hostage by outcome biases (see recently mentioned Thinking In Bets) might be the secret to trading. I know, another one of those easier said than done things!
I also read a lot of Tribe Of Mentors by Tim Ferriss. This is another one that’s taking me a while to read since I stop to ponder thoughts and research (and often buy!) other books and products. One thing that I did walk away with this week was macro vs. micro thinking. Yes, macro thinking is important, but it’s what you do with your minutes and hours that’s even more important-otherwise, you’ll never achieve the macro. This has got me constantly questioning myself, will this activity move me toward or away from my goal? As usual, everything with me comes back to trading. The actual process of trading, at least with my style, doesn’t really take that long. It’s what you do in those few minutes that’s key: Taking partial profits when offered. Honoring your stops. And, entering on an entry-and only an entry. Each one of these activities takes minutes, or in some cases, just a few seconds. Focus on the micro and the macro will take care of itself.
This Week's Content
I really felt the need to get ahead of this potential bear market this week. That’s why I put out two articles. Hopefully, a word we should never use in this business, this will turn into just another correction in this long-term bull market. I do think we should brace just in case.
I was able to finally sign off on the draft version of pattern recognition and indicators for an upcoming major software release. These will be free with the software, but unfortunately, the release isn’t scheduled until May. Check out the last Week In Charts for a sneak peek. It’s pretty cool if I say so myself.
What I'm Trading
Now's the time to consider a short or two in equities. See the aforementioned articles. In FOREX, I continue to trade hourly Bowties off of major highs/lows. I'm currently short the EUR/USD based on this. Partial profits have been taken and I'm now in "longer-term" trend following mode (e.g. hourly will hopefully, oops, "hope?", turn into a daily trend).
May the trend be with you!
P.S. Now that you know what I've been up to, leave me a comment below to let me know what you've been doing.
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Dave Landry has been actively trading the markets since the early 90s. He is managing member of Sentive Trading, LLC (est 1995) and author of 3 books of trading including The Layman’s Guide to Trading Stocks. He has made several television appearances, written articles for numerous magazines, He has spoken at trading conferences throughout the world (including Russia, Hong Kong, Australia, Germany, Italy, and others). He has been publishing daily web based commentary on technical trading since 1997. He has a B.S. in Computer Science and an MBA. He was registered Commodity Trading Advisor (CTA) from 1995 to 2009. He is a board member of the American Association of Professional Technical Analysts. Dave can be reached at www.davelandry.com
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