موقع التقني

  In a recent video shared by SMB Capital , I discuss why creativity is necessary for trading success.  Quite simply, in order to achieve unique returns, we have to be able to perceive and act upon unique opportunity.  What we see in markets is a function of where we look .  If we're drilling for oil and look in the same places as everyone else, we'll come up with a lot of dry holes.  Half the battle is knowing where to look for the opportunities that others are missing.   An important topic in the Trading Psychology 2.0 book is how to develop our creativity by asking questions that others don't ask and studying information that others don't gather.  Here's a nice example of creative processing from my trading many years ago.  My point in that article was that "creativity is the new discipline".  It's not enough to find an edge and stick to it in a disciplined manner.  Now the discipline has to extend to finding fresh edges . Her...

  In recent posts, I have shared my framework for thinking about trading and trading psychology .  I've also explained a few core concepts central to this approach, including how active traders can diversify their risk-taking ; how to deal with stress in trading; and why volume is key to understanding trading opportunity.  In this post, I will explain the single most important psychological factor in active trading and why it is crucial to performance:  open-mindedness . Pattern recognition is the core cognitive skill involved in active trading .  One mistake many beginning traders make is that they equate patterns in markets with chart patterns.  For the rational, evidence-based trader, patterns are only meaningful if they have explanatory value.   When trading short time frames, the patterns in markets that are meaningful are ones that track actual supply and demand among market participants.  From the sequencing of trades in a market, we...

  Just about everyone looks at volume, but do they actually *see* volume? Volume tells us who is in the market.  Who is in the market determines how the market will move.   Since 2019, yesterday's volume in SPY correlates with today's volume by over .80. Since 2019, today's volume correlates with today's high-low range in SPY by a little under .60. When volume expands, it's a sign that institutional participants are active in the market.  Because many of them trade directionally, their involvement/non-involvement contributes to volatility and the ways in which moves continue or reverse. Since 2019, daily SPY volume correlates with VIX by over .80. When we look at relative volume (how today's volume at a given intraday period compares to average volume for that time of day) and track its evolution through the day, we can clearly see--in real time--who is playing at the poker table and who isn't.  That helps us handicap the odds of moves continuing or not. W...