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Heard on the Trading Floor

@HeardFloor

Nov 26

Want to become a better trader?

I bet you do.

Are you ready to do the work?

Are you ready to do the work consistently without finding reasons to skip it?

Very few do this important exercise called journaling. Can't blame them, its boring.

My template below 👇

How you get the most value out of your journal.

- You put down your thoughts daily and forget about them. Not much value there except for putting them down on paper.
- You gain value by tracking what problems and mistakes you had and how you tackled them in the past.

It is not the actual writing today that helps you much, it is the going back through your old entries that makes you improve significantly. Tricky part, if you don't write them down on a daily basis you wouldn't know what to improve.

Here is the daily template:

Read 8 tweets

Heard on the Trading Floor

@HeardFloor

Nov 25

Big shift from active towards passive investing is materializing in the past years.

А few reasons why investors run away from portfolio managers 👇

1/

Achieving consistently successful active management has historically proven more difficult within select asset classes, such as among the stocks of large U.S. companies. Active equity managers find it hard to beat their benchmarks

2/

It is quicker and easier for investors to capture the market returns through keenly priced tracker funds or ETFs than launch a search for an active manager

3/

Read 6 tweets

Heard on the Trading Floor

@HeardFloor

Nov 25

In markets, there is always something worth mentioning.

Even on slow days like today.

👇

Under the radar📡:

1. Relative strength : $KRE, $XLV, $XLU, $JETS
#relativestrength

2. Relative weakness: $QQQ, $AAPL, $FXI, $CL_F, $NG_F, $ATVI
#relativeweakness

Relative strength notes 🟢:

1. $KRE - finally closing above sma200d.

2. $XLV, $XLU - defensive sectors bid for another day. $XLU stalled at sma200d. Ripe for some mean reversion?

3. $JETS - strong but paused at sma200d too. $BA sees no retracement after 50% up in 2m

Read 6 tweets

Heard on the Trading Floor

@HeardFloor

Nov 23

Your portfolio might be in danger, if you don't consider the low probability but highly impactful events👇

Ignoring or underestimating the significance of a price shocks could result in a catastrophic loss—if not now, then sometime in the future.

1/

Black swan events (or price shocks) are large changes in price caused by unpredictable and significant events. While most traders don't think about them due to their low probability, they are the most common cause of catastrophic loss.

2/

The only time a price shock is important is when its interpretation is contrary to the direction held by traders. Unless you are a contrarian, a price shock is more likely to cause a loss than a profit.

3/

Read 4 tweets

Heard on the Trading Floor

@HeardFloor

Nov 23

HEDGING

How should you do it IF you want to lower your hedging costs and improve the process in general.

Biggest question to ask yourself:

Cash US Treasuries and ETFs OR Futures?

Read my thoughts below 👇👇👇

Benefits of Futures

When you short futures you avoid paying the following fees:

1. Borrow fee for holding a short position
2. Daily interest (In the case of ETFs, you may pay a dividend if holding through ex-div date)
3. Slippage, it exists even in US Treasuries (USTs) and ETFs

On top of it you get the following benefits:

1. Very cheap commissions
2. 24/5 trading hours if you want to be proactive with getting on and off your hedges.

Read 7 tweets

Heard on the Trading Floor

@HeardFloor

Nov 22

Surviving bear markets requires you to manage both volatility and your emotions.

Although we try to approach trading from a logical perspective, our emotions can get in the way of sound decisions.

Why is it so difficult to avoid them? 👇

1/

Emotions can diverge from rational assessment

Bear markets are a breeding ground for emotions-based investing. The feeling of fear and a heightened sense of risk will be amplified by the behaviour of other people. Traders tend to act in herds.

2/

Emotions can provoke rapid, short-term decisions that are often the wrong ones.

Fear pushes us to act prematurely.

3/

Read 6 tweets

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