Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
The first half hour of trading was a real gut-wrencher. With the less-bad jobs report, the initial figure on my portfolio's bottom line was a huge negative number. But after the first few minutes, the losses started falling away like autumn leaves from a tree, and now the figure is……….rubbing eyes…………nicely in the green.
It's amazing what wonders a strong dollar can do on a morning like this
The July jobs report came out, and since it's less bad than the worst estimates, the /ES flipped higher nearly twenty points in the span of just a few minutes. Here's the unemployment percentage through July, with last month's peak highlighted with an arrow:
Psychologically, a couple of "phew!" events are going on for most folks: first, the psychologically-troubling double-digit unemployment rate has been averted so far; and second, a graph like this has the sort of "termination to exponential growth" which make the end of a recession seem plausible.
What the market does with the news over the course of the entire day is more interesting to me than what it's done with it before we even open. But, for now, the bulls have another arrow in their quiver.
I had promised back on April 29th to not mention The Survey That Shall Not Be Named again, but given the deluge of new Slopers, I hope old-times will give me a pass.
Anyway, for folks who did not fill out this survey before, here it is. I'd appreciate you taking a moment to fill it out, since it's only a handful of questions, so just click on the link. Thanks.
For those of you who did fill it out earlier, thank you. My prior post was much more interesting than this one, so hop back to that if you haven't read it already.
On the bookshelf behind my chair are a series of binders, one of which is labeled Tim's Trading Tome. It is thick with articles and charts, and at the very front is a lined sheet of paper on which I wrote the following last Autumn. This is the entire entry, and I've boldfaced a couple of key items for emphasis.
Now, ten months later, I still subscribe to this thesis. I was early calling for the bottom of the market in October – – it had another, slightly lower, bottom in March. But I was certainly right with "It will be hard" – – dealing with the past five months has been exceedingly hard.
But in today's all-text post, I wanted to make a point that is very important to me: there is no holy grail for traders. I've been doing this a long time, and I've been exposed to a lot of different products, methods, techniques, and trading dispositions. There isn't a single method which is a surefire way to make money. Not one.
My philosophy on trading has this important premise: it's all about your relationship between yourself and the market. The market, you cannot control. Yourself – – to a degree – – you can. And it is the complexity of yourself vis a vis an ever-changing market which makes the entire enterprise of being a trader simultaneously fascinating, exasperating, and thought-provoking.
As the old saying goes, you never step into the same stream twice. It is the same with the markets. They are ever-changing, particularly in the present time, and there isn't a magic bullet out there which is going to let you nail profits month after month, year after year.
There was a time, particularly last year, when I thought I could find such a thing. I was open-minded about just about anything: I would gladly look at astrological cycles, numerology, and a variety of obscure techniques for ascertaining market turning points.
Some of them worked. Most of them didn't. But instead of latching on to one particular method, I have, over the years, adopted a handful of methods, and I've put them into my own unique trading stew. I am refinining it all the time – – weighting some "vectors" I am monitoring more, weighting some less. But the concoction is best suited for me and who I am. It wouldn't work as well for most other people.
It's important to embrace one's perpetual ignorance. I seek mastery by considering myself a dunce who is in search of knowledge. By no means am I suggesting piling on rule after rule, method after method. I view the act of trading not much different than making an ongoing series of bread loaves. I'm changing the recipe a little each time, and I'm kneading, kneading, kneading the dough (that is, my positions, their weighting, and their stops) in order to try to get the result I'm after. Metaphorically, a delicious loaf of bread; realistically, a nice, outsized profit.
The fact that learning to be a great trader is a very personal journey is very much why I stopped buying business books many years ago. When I was in my late teens and early twenties, I bought business books all the time. I figured they would help me become a more successful business person. They didn't.
I've got shelves of these books, and I don't think I learned a thing from any of them. It's not because I didn't read them carefully. But the fact is that most "how to" books are based on the notion that If You Do What This Person Did, You Will Be Like This Person. But you know what? That person is that person. He isn't you. And the circumstances he found himself in (whether he's Jack Welch, Tom Peters, Steve Jobs, Mark Zuckerberg, or God-knows-who-else) are unique to that person. If you want to read a biography, great – read a biography. But if you want to be like that person – well – that's spot already been taken.
This isn't to say there's nothing to learn from books. But I think books related to business or trading are best applied to either (1) the actual mechanics of trading techniques and their application; and (2) learning from the successes and failures of others in order to "template" those events to your own personal experience. That's why I found the Paul Tudor Jones videos so electrifying. I don't have any illusions that I'm going to be a Paul Tudor Jones. But I do draw inspiration from his resilience in the face of defeat and his successful use of past markets to present ones.
If you're read this far, and you're feeling philosophical, read this essay by Seneca on The Shortness of Life. We should be humbled at how wise our distant ancestors were.
I saw this comment a few posts ago:
I'll answer both of these, since they come up from time to time:
