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Heard on the Trading Floor Profile picture
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Jan 30 • 6 tweets • 2 min read
If you happen to follow us and read our weekly attempts to make sense out of markets,

you must know we expected some normalization after what happened on Friday.

When uber crap squuezes higher, it is usally a good sign that indices are due for a pause.

Today 👇
Under the radar📡:

1. Relative strength: $PFF, $PGX, $XLP
#relativestrength
2. Relative weakness: $SOXX, $XLV, $UNG & $USO, $XLE
#relativeweaknes
Relative strength notes 🟢:

1. $PFF, $PGX - those do not wanna give up..once the EOM/BOM inflows are over I think this will change

2. $XLP - only green thing today; chart is stuck, same as $XLU; do not touch territory for me
Relative weakness notes 🔴:

1. $SOXX - major weakness in semis today. $NVDA looked ripe for a pullback. What is it doing near 200$ anyway with $INTC, $IBM, hardware being awful and Q4 crypto even worse

2. $XLV - $JNJ down on court decision. $MMM collateral dmg

3. $UNG - ded
Other observations:

1. $SPY not a sexy day but closed above $400.

2. Rates up, $DXY looking good

3. Autos did some mean reversion after going bananas last Friday. Not only the usual suspects $TSLA, $LCID, $RIVN but also $F, $GM

4. $BTC and $ETH first meaningful red day
What did I miss?

--------

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More from @HeardFloor

Heard on the Trading Floor Profile picture
Jan 31
Proud to announce that lately I have been doing VERY little in terms of buying and selling. Cuz if I had, I would have been thrown by that market left and right.

Hopefully, tomorrow we are finally gonna have some resolution to the choppiness. 🔪

Tickers 👇
Under the radar📡:

1. Relative strength: $XHB, $KRE, $XLI, $XLB
#relativestrength
2. Relative weakness: $FXI, $SOXX
#relativeweaknes
Relative strength notes 🟢:

1. $XHB - jaw-dropping performance after $PHM earnings. I don't think c. 9%+ is typical ER for this one.. A bit more euphoria, cancelation of priced cuts and homebuilders will be short again

2. $XLI, XLB - economy bid; transportation good $FDX, $UPS
Read 6 tweets
Heard on the Trading Floor Profile picture
Jan 22
We all know how important risk management is!

But the there are so many different risk management approaches that the 'term' risk management does not encapsulate the processes behind it.

Here is how we do it on our trading floor:
First and foremost we need to distinguish between the trading styles of traders. There is no one size fits all approach.

There are different rules for:
1. Short-term traders
2. Swing traders

Major differences?
1. You trade your daily PnL
2. You trade your portfolio performance.
Short-term rules:

1. Daily stop loss - no trading for the day
2. If you cross 2x your daily stop loss in three consecutive down days - grounded
3. 2x daily loss or higher in a day - grounded

Grounded = reduced size per trade + reduced number of open positions
Read 6 tweets
Heard on the Trading Floor Profile picture
Dec 26, 2022
I've been a trader for 16+ years and managed a trading floor for 10+ years.

Here are 4 crucial steps to take IF you want to significantly increase your chances to succeed as a trader:
1/ Start early:

Starting early gives you the opportunity to dedicate yourself to trading. The younger you are the less expectations on you to make money right away. After college you are expected to earn.

Needing to make money AT ANY time is the biggest performance killer.
2/ Have an additional source of income or savings that can last for at least 18-24 months.

Yeah I know this sounds like a lot of time but this is the MINIMUM you need to turn into consistently profitable trader.

Having the resources to survive this initial period is key.
Read 6 tweets
Heard on the Trading Floor Profile picture
Dec 23, 2022
Hawkish comments by ECB, BoJ and Fed surprised many investors who expected an upcoming pivot rather than more tightening.

But they underestimate the significance of China reopening after three years of lockdown.

It will have a massive impact. Here's my view👇
Chinese households are full of cash right now. 'Work & stay at home' lifestyle for such a long time impacted their savings in a big way. Now they are free to spend it
We have already seen how the reopening played out in the West - massive surge in consumption fueled by low interest rates. The same is about to happen in China as well. PBOC still keeps rates low, while it also unveiled a rescue package aimed at saving the real estate sector
Read 5 tweets
Heard on the Trading Floor Profile picture
Nov 26, 2022
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 Profile picture
Nov 25, 2022
Big shift from active towards passive investing is materializing in the past years.

А few reasons why investors run away from portfolio managers 👇

1/ Image
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

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