Those who have followed me for some time know that I can be a bit of a … well … a geek.
For example, I study languages. Both their history, development, and the theory behind their construction. A rather obscure area of study to be sure. But trust me, it gets worse. For my love of language led me to the science of ‘textual criticism’. Textual Criticism, for the uninitiated, is the study of attempting to discern what the original ancient documents (called the archtypes) contained through the study of the copies of those documents. This leads into studies regarding paleographical analysis and ….
Yeah, I tried to warn you. I can be a bit of a geek.
This tendency towards obscure areas of study and geekdom? Leads to a trait common to all geeks. Those of us geeks who study any particular area, say … like the capital markets? Come on. Just admit it. We’re all market geeks. Regardless, the trait that common to all of us geeks, is the tendency towards being precise. Well, let me rephrase that. Those of us who are profitable geeks, have a tendency towards being precise. To be exact.
But we also tend towards simplicity and clarity. I think too many people confuse the profitable manner in which profitable traders use precise data. The real art in using data? Is in keeping said precise data both simple and clear.
When it comes to the markets, I try not to indulge in an overload of minutiae and deluge of information. Because there is simply too much information out there in finance. And what is more, you do not need all of the information to be profitable.
I can’t tell you the number of times an investor or trader has asked me my thoughts regarding about a particular news item, or particular strategy, and I had absolutely no idea what they were talking about ….
“No, I don’t try to predict the markets behavior through Elliot Wave.”
“No, sorry, I have never heard of a DMI Oscillator.”
“Yes, I am familiar with Elliot Wave, and I don’t think it is wrong, it’s just ‘not me’.”
“No, I don’t trade CFD’s.”
“Who did you say was ousting their CEO? Nope. I had not heard that.”
“No, REIT’s are not a scam. That is simply a method of investing I have never taken the time to pursue.”
A profitable trader doesn’t have to know every paragraph of every piece of financial data that hits the news feed. A profitable trader should not be expected to understand every single intricate market strategy known to man. Some of the best traders out there wouldn’t know the difference between theta and gamma.
Profitable traders concentrate their precise manner on simple, and clear data that will help them obtain their edge; with a few chosen methodologies.
Yes. I’m a geek. A market geek. Yes I trade options. But no, I’ve never attempted strangled gamma scalping.