Weekly Forex Trading Calendar for January 20, 2020

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Jan 20, 2020. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

Excel version of calendar011920

PDF version of calendar011920

Weekly Forex Trading Calendar for Week of January 12, 2020

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Jan 12, 2020. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

Excel version of calendar011220

PDF version of calendar011220

The Most Important Thing in Trading

Boris Schlossberg

What the most important trading lesson I learned in 2019?

It wasn’t a new set up.
It wasn’t a new algo.
It wasn’t a new indicator.

All three came in handy -- but the lesson that really helped me trade better in 2019?

The need to forgive yourself.

There are no good or bad trades. There are only wrong or right trades. If the trade is wrong it must be stopped. But our inability to admit that we are wrong results in runaway losers that destroy our accounts.

It’s a tale as old as time and repeats itself over and over again because we are unable to forgive ourselves for being wrong so we make things much worse by trying to force the market to be right.

Trying to turn a bad trade into a good one is no way to live

But the power of forgiveness is extraordinary. Not only does it clear our mind and salve our conscience, but when done right it actually helps to improve our discipline. Because to forgive is not to forget. And once you’ve given yourself permission to forgive you are much more likely to accept your mistake, learn from it and not repeat it again.

In the end, it’s kind of ironic that in order to achieve discipline and excellence you actually have to accept and forgive your ineptitude and absence of control.

Happy Holidays to all

B

Weekly Forex Trading Calendar for December 23, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Dec 23, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

PDF version of calendar122219

Excel version of calendar122219

Weekly Forex Trading Calendar for Week of December 30, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Dec 30, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

Excel version of calendar123019

PDF version of calendar123019

Weekly Forex Trading Calendar for Week of December 16, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Dec 16, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

PDF version of calendar121619

Excel version of calendar121619

Weekly Forex Trading Calendar for December 7, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Dec 7, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

PDF version of calendar120919

Excel version of calendar120919

Trading in the Actual Zone

Boris Schlossberg

Mark Douglas’s “Trading in the Zone” is a seminal classic of trading psychology. The book should be read from cover to cover but its essential tenents are :

1. Anything can happen.
2. You don’t need to know what is going to happen next in order to make money.
3. There is a random distribution between wins and losses for any given set of variables that define an edge.
4. An edge is nothing more than an indication of a higher probability of one thing happening over another.
5. Every moment in the market is unique.

Everyone one of those points is a fundamental truth trading and the title itself is a reference to the idea of trading without fear. When you are in the “zone” you focus on process rather than outcome and therefore build an indomitable psychological mindset that helps you perform to your best ability every single day.

Douglas’s points are timeless and true, but I want to discuss something much more mundane -- literally trading in the actual “zone”, which is often overlooked as a key ingredient to trading success.

This week I was in Philly for an impromptu gettogether with some of my oldest and dearest camp friends. Now I am a horrible map reader and whenever I get to a new place I usually just try to get the general direction of where I am going and then set out on foot. So against Google Maps better warning that I should take public transport or Uber, I simply stepped outside the 30th street station, found my way to Chestnut Street and then just headed to downtown Philly.

Philadelphia is less than 90 minutes away from New York but like almost every New Yorker I know, I never visit the place. Which is a shame. Because it’s a great city with a wonderful history, beautiful architecture, a thriving nightlife and generally a level of cool that no longer exists in the stodgy you-can-only-live-here-if-you-are-a-billionaire Manhattan.

But my walk down Chestnut was more than just a rumination on gentrification, it was an indelible lesson in geography. I quickly grasped how Philly is contained between the Schuylkill and Delaware rivers. As I crossed Chestnut and Broad I finally understood the term Broad Street Bullies ( a name given to the legendary 1970’s Philadelphia Flyers hockey team). And as I made my way towards the Delaware river I could see Indendence Hall on my right and literally imagined Franklin and Jefferson writing the country’s constitution.

My pedestrian stroll through the City of Brotherly Love made me more knowledgable about the place than any Google Map ever could. Nothing beats touch and feel for not only acquiring but absorbing knowledge.

Which brings me back to Trading the in Zone. Being mentally tough is a laudable goal for sure, but what about trading in the actual zone? What about studying every tick and quirk of the timeframe you trade. For the past several months K and I have been making Market Mapper tools to help traders see price patterns more intuitively. But it was only after walking those maket maps day in and day out that I started to pick up subtle clues to price action that improved my edge tremendously.

This is why wizened market veterans always talk about the need for screentime. And it’s absolutely true. There is just no substitute for engaged observation. That’s why newbies traders who are just looking for a “winning setup” always fail. There are no winning setups. There are only setups that you adapt to your own style. So just like a native of a city, I can point the tourist in the right direction but to truly discover the place you need to do your own walking and discover the Zone that works for you.

BlackFriday

Weekly Forex Trading Calendar for December 2, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Dec 2, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

PDF version of calendar120219

Excel version of calendar120219.xls

What A Nobel Laureate Can Teach Us About Trading

Boris Schlossberg

Almost anyone who trades knows about the Sharpe ratio. It’s a measure of risk earned in excess of the risk-free rate per unit of volatility. The formula basically tries to answer the question -- how much risk did you assume in order to achieve that return. Now in our YOLO world where only the end result matters, one might ask -- who cares? Nevertheless, the Sharpe ratio is a useful tool to see if basically, you are one trade away from total ruin and every single money manager and trader on Wall Street must submit to its measurement before having any capital allocated to them.

The man who invented the Sharpe ratio, William Sharpe, is a Nobel prize-winning economist who is now retired, but he has not stopped putting his creative mind to solving investment problems. His latest project is what he calls the ‘Nastiest, Hardest Problem’ in Retirement, namely, how do you make sure your money will last your lifetime.

We live at an interesting time in history where the human lifespan in the OECD world has been extended by 150% while working years have basically remained static. This has created what in finance is known as a liability mismatch. Retirement assets are simply not elastic enough to sustain the new longevity The problem is massively aggravated by the volatility of equity returns. Imagine you’ve been investing diligently for 10 years and have built up a nice portfolio of 1M dollars off a total capital contribution of $500,000. Then in a span of 3 months, all those profits disappear and your original stake is now worth only $400,000. Ten years of wealth-building down the drain in less than a quarter. That’s what happened to investors in 2008.

Of course with the benefit of hindsight, we know that the markets not only recovered but doubled but many people -- in fact, most likely the majority -- panicked and sold at the bottom and then took years to get back into the markets. It’s easy to say that investors should hold through thick and thin, but as we know from trading nobody ever does. We all sell out at the bottom. At that moment no one is thinking about compounded returns 20 years forward. We are all trying not to become homeless tomorrow.

This is the precise problem that William Sharpe has tried to tackle and he has come up with a rather elegant solution to help investors protect themselves from their worst instincts. As he tells Barrons, “The idea is that you segment your money. It’s similar to using “buckets” but with a time component. A retiree might have a box for 2020 and a box for 2021, and 2022, etc.

In each box, you have a combination of safe assets, such as an annuity or TIPS [Treasury inflation-protected securities], and a market-based portfolio, such as one with stocks and bonds. You have the key if you need to access the funds, but the idea is that, once a year, you would sell the assets in that year’s lockbox. You put all your money in locked boxes, to begin with, and you just happily open locked boxes. If you’re dead, your partner opens the lockbox, and if you’re both dead, your estate opens all the lockboxes that are left.”

Why is this better than just putting all your money into a single account stream? Two reasons. One is financial. By creating short term lockboxes that are essentially made up annuities, zero-coupon bonds, and TIPS, you assure yourself that you have the income stream to survive for the immediate future while allowing “long-tern” lockboxes remain in the equity market where the volatility does not affect your short term needs. The other reason is of course physiological. The math is the same in both scenarios. You only have so much money and it can only compound in a certain way given the performance of the assets. BUT! your ability to weather the market storm is much more durable if you were confident that your income streams were assured for the near term.

Sharpe’s segmentation idea really resonated with me because I have already been exploring it with my own trading account. Lately, I segmented my trading capital into various strategy “buckets” with a wide variety of lever and instrument factors. The results have been very promising. For the first time in my life, I have let strategies run without interference and they are really starting to perform.

Ever have a day when one bad trade tripped you up? And then you started to revenge trade and then the whole account got annihilated over what was supposed to be a 0.5% risk? This is exactly the problem that segmentation tries to cure. Because the true risk to our capital isn’t one bad trade, but what we do afterward. If you had no more money in your segmented account to revenge trade the damage would be contained.

Segmenting your capital by strategy, instrument and lever factor also has optionality embedded into the process. Let’s imagine you are a venture capitalist but instead of companies, you stake 10 different strategies in 10 different accounts. Now some -- perhaps most -- will blow up or lose 50% of value over time especially if you use even a mild lever factor. But one or two may be totally in sync with the current market environment and go on a massive tear tripling or quintupling their value. That’s all you need to be overall profitable -- but if you have all your assets in one account you will never have the mental strength to let the winning strategies run because you will be constantly looking at the P/L of the account and taking small profits to offset the big losses.

My example doesn’t even have to be that dramatic. You could just have most strategies tread water (which is what happens in real life, at least with me) while one or two make all the money. The Pareto Principle never goes away in life. William Sharpe’s great insight is to simply harness its value for all of us.

Weekly Forex Trading Calendar for November 25, 2019

Weekly Calendar Calls

We have just posted our weekly news trading calendar for the week of Nov 25, 2019. You can download the pdf and excel file by clicking on the Read More Link. These are soft biases on economic data and not trades that we directly trade or track like BK Swing and News.

PDF Version of calendar112519

Excel version of calendar112519