Thread by @coloradotravis

Why it’s not (necessarily) disingenuous for a trader to only follow up on winners.

There’s a recurring meme that FinTwit peeps are so cynical that they simply call trades randomly and then retweet only the ones that work.

That’s not my read on what’s happening, so what is?
1/

Okay so first off there are 2 types of positions.

Well, for me.

I’m like Level 3 so presumably there are others I haven’t unlocked.

Anyhow — let’s call them “gravity trades” and “surf trades” since that seems fun.
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A gravity trade is where you’re just like betting on structure. “QE isn’t actually deflationary which we’ll find out within a couple years which makes bonds good, eventually” or that kind of stuff that I occasionally yammer on about.

Anyhow these aren’t the point.
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There are also “surf trades” — a point-in-time read that you think there’s a wave coming and you’re gonna try to ride it.

It’s literally like saying to the other paddling out there, “hey I’m gonna try and catch this one.”
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How long will you ride it? I mean who knows. Honestly, sometimes you try to catch it and just fail.

Sometimes you get a piece of it but then wash out early. Just kinda depends on how good your entry is and how experienced are, really.

So there’s a lot of that on here too.
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And the reason people don’t follow up on those when they wash out is that they’re just not that interesting.

“Hey Ima try to ride this.”

“Sick brah good luck.”

“Dudes I wiped out let me give you my notes on it.”

^ nobody wants your failure notes when you wipeout.
6/

So I think that’s why sometimes a lot of ideas just go cold.

But that doesn’t mean your radical surf friend isn’t catching some good waves every now and then.

Even journeyman surfers can do alright out there once they learn how to not get pounded into the sand over and over.
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So here’s how that might work.

Let’s say you think reflation is bullshit (as I do) and you see this big ass oil channel and one day it breaks down, right?
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And you’re like, “damn that’s interesting I was thinking that could happen because of my b̶i̶a̶s̶ thesis.

So you start watching it a little more and it bounces up and retags the channel.

So you’re like, “fuck it I’m gonna try and catch a piece of this thing.”
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And let’s say you get a half decent entry that’s not the best but does alright.

Then when the thing starts to get strong again you just peace out.
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Now - is it the legendary wave ride you wanted? No but you shredded a bit and like... whatever it was a good time.

And since it's trading in a range, you can ride these same conditions a few times now, just like a day at the beach where the water and weather are just so.
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Now of course it doesn't always go your way - sometimes you wipe out.

Like say you try to enter here and it goes okay but then it reverses fast so you close it at a small loss figuring you misread it.

You just don't ride them all perfect, ya know?
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And what you're really playing for in the end is that epic ride - where your big thesis plays out and one of these breaks down.

But in the meantime you just shred it up a little bit and tootle around.

A good surfer can have a good time and make a bit of money like this.
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And if their big idea plays out and it breaks down, that's awesome! One of the rides is just real dope.

And if not and it breaks up, you pack it in and go find some new surf to ride.

It can still be a good day of surfing even if you don't ride a monster that day.
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