As history will remember, 2020 was an odd year to say the least. While it may seem like everyone is more or less staying at home and cutting out social interaction, it would have been a good time to build new skills and hone old skills – it wasn’t. Much of 2020 was a relentless, soul-destroying weight.
Between the two pillars of a global pandemic and political discord, the world has suffered greatly.
But as the saying goes, every day above earth is a good day, and we should also take a few moments to be grateful for the comfort and security we have. It is appropriate to face the coming year with optimism and hope.
There is a powerful lesson hiding in 2020 that has been neglected so far. Take each belief you represent and ask yourself, “How sure am I about this? How sure should I’m off “This assessment – knowing about our own knowledge and beliefs – is a critical point that is missing from the discussion. In general, if we are honest we should be less sure what we think we know than we are.
I’ve spent time watching social media interactions and it’s a horrific brawl to say the least. I previously speculated that political thinking tends to stir emotions and diminish rational analysis, but much of this could really be resolved through intelligent thinking about our own thinking. However, this work is quite difficult and not easily done by most of the people.
I have to wonder if we are showing some kind of madness as a collective – not to say that individual people are crazy, but is the overall effect that we process information so poorly that we completely detach ourselves from reality? If so, what does this say about our survival as a species? Could this kind of irrationality make an intelligence extinct? These are questions worth considering.
Maybe I should apologize for being so grumpy, but I have a good excuse! One of my main projects for the year ahead is a new book, and I’ve spent a lot of time researching and thinking about the subject.
The new book
I’m in the process of writing a book on trading psychology. For many years I have realized that this is a topic that needs better treatment, and it is one of the “soft” areas of trading that is easily accessible for people who want to try to be “hack expertise” .
I have read over 25 books on the subject this year and there are some outstanding, fantastic books out there. (Brett Steenbarger’s books are always at the top of my list. Ari Kiev and Alex Elder are also significant contributors. Mark Douglas’s book is a standard, and while it contains some moments of true wisdom, it also has some glaring holes.)
I’m going to offer some important new things on the subject: First and foremost, this will be an action book – trading psychology is ultimately about the execution of what we do. How we think and feel is secondary to what we do. So the overarching theme is that all of this work must relate to action. To that end, I have developed a short series of powerful exercises that will help you realign your understanding of risk and chance and completely change the way you approach the markets. I have raved about these exercises at length; You have exceeded all of my initial expectations and there is absolutely nothing like it in the literature.
There will be a lot more in the book. I’ll put cognitive biases and mistakes in a framework that makes sense and suggest ways we can deal with these quirks without them hurting us. I also have a perspective on meditation – exactly what exercises you should probably be doing and how to start – which will likely open up some new possibilities for you.
I am very excited about this book and I think it has the potential to help many traders at all levels of development. This will be a major focus for me in the first quarter of 2021, and we hope to release it mid-year, but there is still a lot to see!
New coursework will be available shortly
In 2013, I released a massive free trading course. I had three driving reasons – one was to support the book I had just written The art and science of technical analysis. The second was that I had a friend who was betrayed with $ 25,000. As it turns out, from one of the “educational” outfits that the FTC closed in 2020. (Who Said Everything Is Bad In 2020 ?!) So I created a massive course that is better designed than most of the things on the market and delete it for free.
The third reason I did this was because I really enjoy teaching and this gave me the opportunity to help a lot of traders. Over the years the course has been available, almost 20,000 traders have taken it – from beginners to seasoned professionals. (One of our core groups were ex-hedge fund traders who were making the transition to trading their own money and risk. This is not an easy transition.)
This year we will add new topics and depths to our range of courses. Many of these courses will have a live component in which I will work with students and answer questions. We’re not sure about the details or the schedule, but this is one of the things we’ve sped up for the first part of 2021. Stay tuned for more news soon.
More systematic trading
Lastly, we expect to develop more algorithmic / systematic trading approaches. My trading has always been a combination of the discretionary and systematic perspectives, but I’ve felt a draw in recent years to lean more on the systematic side. We program a lot and develop behind the scenes.
While we probably won’t share details about the approaches we’ve developed, you can expect some good new things here on my blog and for our MarketLife and Talon Advisors members.
A lot more on these topics soon, so stop by and follow me on twitterif you don’t already Happy New Year and let’s make 2021 a good one!