Category Archives: Psychology

BEARded Grace

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There are few experiences in this life that will more fully expose your strengths and weaknesses like trading the markets… Mentally, emotionally, spiritually, even physically.

Before we move forward, let’s take a look back. Do you remember where you were in Oct/Nov 2014, and what was happening in the markets?  The market was doing something that it had never done before.  It was making a record number of daily advances.  Day after day, after day…like the market had never before seen in recorded history.  It was also the time when ATR-based trading was birthed out of the pain of my unseen bias.  My trading moved from fundamental, to technical, and then to unbiased trading based on ATR. (more…)

Beyond the Pale

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I’ve been online for over a third of a century, starting with a 300 baud modem and a BBS. During the latter portion of that timespan, the age of the Internet, I’ve been exposed to countless thousands of ads, increasingly customized to my habits, purchases, search engine requests, and whatever else can be ascertained about me by my online activity.

Starting a couple of years ago, I started noticing something odd about the web sites I visited. And here she is:

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Effective Market Management: Art & Science

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saul steinberg
From Saul Steinberg’s 1954 drawing ‘The Line’

The notion that there is art involved in interpreting the economy and financial markets is probably heresy to many market participants and probably 99.9% of economists (that .1% guy being the one who’s excluded from the meetings and egghead social gatherings), whether they be right or left leaning (I always find it entertaining to hear right wing and left wing economists duke it out, as I did on NPR yesterday, coming to diametrically opposed conclusions amid the tax reform debate). (more…)

In Marketing and in Markets, Don’t be the Mark!

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I have made countless posts lampooning the mainstream media and its eyeball harvesting, click baiting content. This content and especially the associated headlines (let’s recall the classic R.I.P. Bond Bull Market as Charts Say Last Gasps Have Been Taken, dated Dec. 2016 as but one example) are designed to whip up emotions, draw attention and thereby gain traffic and ad dollars (diminishing though they are these days). nftrh.com is and always will be ad-free, by the way.

So sure, the bond bull market may well have ended in the Brexit and NIRP dominated summer of anxiety (in fact I believe it did), but any good contrarian would have seen the trade setup to go bearish on bonds in the middle of that hysteria, not a half a year later when Bloomberg used Louis Yamada’s chart to make a big headline. From a post in June 2016 about the Silver/Gold ratio and the prospects for a future ‘inflation trade’ right at the height of the bond bull… (more…)

Your Brain

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I got an interesting email yesterday:

I’m a new member – and I love your site! I’ve trade stocks through my own account for years and I feel your site is a truly great resource –  which brings me to why I’m directly contacting you:  I’ve recently partnered with the University of Illinois to research what goes into a trader’s decision when they look at charts. Specifically what part of their brain is involved – and conversely what part of their brain is actually better at it.  The first test is helping establish a baseline and it involves picking a stock direction when looking at an anonymous chart – the respondent is only given one second to decide – which eliminates the participation of the prefrontal cortex. These decisions will be made with the brain stem only (subconscious). The reason I’m asking for your help is that I need participants who have spent an unhealthy amount of time looking at stock charts – thousands of hours – and I was hoping you’d have an idea about how best to reach them. I will share the results of the study with anybody who participates and none of their information will be shared or used for anything other than analyzing the results. I’ve included the link to the test (it takes about three minutes to complete) and would really appreciate any help or suggestions you have for getting it out to the community.

I readily agreed and took the survey myself, and it’s fun. Here’s the link……….. 

Worry Warts

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Typically when things are going great, I think about just how low things could go or how bad things could get. I’m going to do just the opposite today, since that f*cking b*tch Janet Yellen has a way of mucking up all my plans, and instead will think about danger points for bears tomorrow (that is, Friday).

I am presently short seventy-three different positions, almost all of which are deeply in the green. However, looking at the ES, it is approaching a supporting trendline that spans back for many months.

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