For 25 years now I have either been trading on a
bank desk or at a hedge fund. I am successful but I could be
much more successful if I didn’t always fight the
trend. Within a global macro portfolio, I trade the financial
futures intraday, and somehow I am always fighting the intraday
moves. It’s like I’m sabotaging
myself or just need the excitement. I don’t know.
Have you ever known anyone who can’t stop trying
to fight the market?
Let me guess: Your father was an engineer, or a
mathematician, or maybe a doctor, right?
Now that you are asking how the heck I knew that,
I’ll tell you. Every single time I work with a PM
or trader who fights the trend, we deduce that what they are
really up to is trying to be the first to find the bottom or
the top…the first to find the turn. And why, oh why, do
they do this? They know they lose boatloads of money. They have
told themselves to stop 10,000 times. But, alas, the machine
somehow acquired a big short (again) smack in the face of the
banks and the techs all being up and an advance/decline line at
+1850 and climbing—at 2pm no less.
But let me ask you, what if you were right? What if you
nailed that last ES contract at the very tippy top of the day?
At a minimum, you would slap your desk and let out a whoop,
right? Yeah yeah, I know. But what’s the FEELING?
I’ll bet you your next vacation that you feel
brilliant and it feels good.
See, the gig with fighting the trend is really about being
the first to see the end, and being the first to see the end is
really about being smart. And being smart is about getting Dad
to be proud of you. That’s always a tough thing to
get out of men who became engineers and doctors in the 1960s
Believe me, I already know you are smart. And so do most
women. Dad is also duly impressed. Actually, he’s
probably jealous, so save the money you’re losing
every day and send him on a vacation instead.
Readers are invited to write to trading coach Denise
Shull, a recognized expert in risk psychology and author of
Market Mind Games. Send questions to firstname.lastname@example.org.
Newly-minted PM asks "What’s the
Avoiding afternoon impotence