One of the cardinal themes of my novel book is the importance of inventiveness inwards generating trading ideas amongst an edge. What I telephone band Trading Psychology 2.0 emphasizes flexible adaptation to changing markets, non stiff adherence to static trading methods. From this perspective, inventiveness is the novel discipline: pathetic dependent area shows upwards non exclusively inwards emotional decision-making, but inwards consensus thinking.
You know that proverb “Garbage In, Garbage Out”? Poor character inputs volition Pb to faulty outputs fifty-fifty if yous employ the best of programming. In trading nosotros powerfulness tell “Consensus In, Consensus Out”. If yous await at the same things equally everyone else, you’ll pretty much air current upwards thinking–and trading–like everyone else. That’s non a adept recipe for superior risk-adjusted returns.
To heighten our creativity, our dependent area needs to endure an improvement inwards our data diet. We demand to accept inwards fresh information, ameliorate information, together with data organized inwards novel together with useful ways. I’ve long enjoyed the Finviz website equally a root of novel perspective. If yous click on the heatmap above, you’ll encounter major ETFs together with the relative mass of their trading yesterday. Light bluish indicates much inwards a higher house average volume; nighttime indicates significantly below average volume. At a unmarried glance, nosotros tin forcefulness out encounter where coin was flowing. That’s non a bad starting dot for identifying rotational markets together with sector/asset course of written report based marketplace themes.
How arrive at got the SPX stocks behaved on recent net income days? This heatmap gives a useful view, a quick visual accept on whether the marketplace is attention to endure pleased or disappointed amongst fellowship performance. That’s non a bad starting dot for thinking nearly long/short themes.
Want a visual on the relative functioning of diverse commodities? Or how nearly a visual on the relative strength of diverse currencies? Looking across property classes, yous tin forcefulness out start to disclose emerging global themes.
But non all inventiveness comes from visualization. Here is a good curated summary of breaking intelligence together with spider web log posts that tin forcefulness out feed the head.
A swell finish for 2015’s trading is to enrich your capacity for marketplace insight. If yous await at what others are not, yous start to inquire questions they don’t ask. And that tin forcefulness out Pb to fresh answers.
Further Reading: The Sobering Odds of Daytrading Success