charts of interest link

http://www.youtube.com/watch?v=sSJIZMLbD6s charts of interest link

daily report review link

http://www.youtube.com/watch?v=ZHnn5XepgDw daily report review link

Premarket call May 08, 2011: all the precious metals up in the overnight trade

building on Friday’s momentum (or putting in the first peg of support) all the precious metals are up in the overnight trade; silver is in a perfect “max pain range compression” stage here, ready to break out of Friday’s relatively tight range in either direction with advantage

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Weekend report review May 07, 2011 links on YouTube

Youtube link discussing the weekend reports

http://www.youtube.com/watch?v=0gBXLyJxCow

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daily trading plan review link May 08, 2011

daily trading plan review link http://www.youtube.com/watch?v=ukYimU8A99U

opportunities developing tactically in precious metals, energy, commodities on their significant pullbacks.  Stable boring Dow stocks like KFT, JNJ, PFE, WMT cotninue to outperform

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May 04, 2011: pre mkt notes: silver off sharply overseas

preparing to manage our silver short trade in ZSL, which looks favorable right now with spot silver down sharply in the futures after a night of weakness.

we are already pushing the historical boundaries for corrections over a 5 and 10 day period so at this extreme condition further sharp moves are expected

Sharing my BrainMode power report

wanted to share out my BrainMode power (BMp) report.

BRAIN MODE power for Professional Development for Ken Long

Quite a few folks had expressed interest in learning more about BMp, so I thought I would share mine and how I will use it in my trading practice

As/if you read further, Notice the auditory, visual, kinesthetic language; notice the implicit and explicit beliefs…

===================================================================

I took it this morning, when in a trading frame of mind

To me, the market is a learning laboratory for self-discovery; It allows us to experience its nature thru whispers, glimpses, and nudges in the results we get from our trading.

I have become even more auditory than I was 2 years ago when I first took this instrument; i attribute this to doing more recordings for Youtube for trading and teaching, and to the amount of time I have been spending in my doctoral program reading complex material. As I read, I hear the words and concepts in my head, I see how they connect (or not) to my cognitive/emotional maps, as I try to fit them into my paradigms, worldviews, cognitive  word-nets/cognitive maps.

I conceptualize top-down and then fiddle to see how the eaches fit in, listening for reactions, looking for jagged edges & anomolies, feeling for friction, tension and goodness of fit. I test to see how it works locally and then scale up to listen and look for effects across other domains, and see how the new “whole load” is distributed across my load-bearing members.

I will go thru this report in detail over the next 2 weeks and  use it as a lens to compare to my trading practice, in order to uncover more insights about how I may better plan, prepare, execute and reflect upon my results

The BrainMode Power for Professional Development comes with a series of 14 weekly followups with additional insights  and exercises, tips and recommendations that can be applied, in order systematically deepen my self awareness of learning styles, preferences, my beliefs about them and how they intersect with and are manifested in my trading practice.

Calibrating my practice, as it were

Each of the folks coming to the research weekend and the live trading week have been sent their links to take the instrument and have a chance to play along and learn.

I will be keeping my notes in my learning journal, and will use that to focus my efforts.

My learning journal has 3 columns:

1. The event/experience/insight in rich detail

2. What I think and feel about it, and how it connects to my world view

3. What I will do about it

These reflect the Kolb Experiential Learning Model in a condensed form, one of the leading adult learning models in use these days.

breathing = trading

• ask yourself: “what is the crowd waiting for?” “What do they need to see?”
• What would confirm in their mind that the trade is NOW?!”
• learn to see it before it happens
• create separation between you and the crowd
• be on the edge of them, so you can sense the mood, but don’t be inside the crowd
• be aware of the crowd but be OF the crowd
• be positioned in the quiet moment before they take off running
• let their energy propel your position
• if you are using “Red-Doji-Green-Go” on the 5s, consider the 1s or 3s as you see the front end of a doji occurring
• what’s a doji look like as it is beginning to form?
• a change in the downtrend that was the big red candle….failure to fail further, created the beginning of the doji
• that’s the time to dial in and listen carefully
• do you hear the absence of further failure?
• do you hear the quiet pause between exhale (fear, selling, money flowing out) and the inhale?
• (beginning to generate the energy of the next leg up)
• this is the “natural respiratory pause”
• this is the moment we train in marksmen
• to pull the trigger at a moment of stability
• in between the exhale and inhale
• it’s the most stable moment in the body
• there are 3 points in the breath: inhale, pause, exhale
• in your practice of meditation, do some breath work:
• 4 counts inhale, 4 counts pause, 4 counts exhale, 4 counts pause
• learn to recognize and feel each state
• learn the quality of the pause
• feel your smooth emotional state
• sip the air in, hold, let it seep out, hold
• now feel price breathing
• learn to dial in to the pace of the breath in the cycle that seems to be in force
• sometimes at the opening its 5s and 1s; later it may be 15s and 5s, or 60 and 15
• try Ken Cohen’s CDs on breathing meditations
• monitor the breathing of the crowd
• but don’t breath with them
• stay true to your cycle of breathing
• dont match their pace
• watch cats stalking and watch their breathing

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Reflections on leadership and risk management

Image via Wikipedia

Carol: as you develop experience with working for new and different bosses, you find yourself with a standard strategy of how to size them up and find out what makes them tick so that you can work with them and for them? Do you find yourself spending more or less time with that the more often your bosses change. How good are we had really reading peoples take motivations and personal preferences and how much time do we take to be certain of what our first impressions lead us to believe?

I share your concerns about the trade-off between reward and risk when it comes to taking on experiments. As you have seen in my commentary on Heifetz, I don’t think they give this important judgment enough treatment.

Regarding Brenda’s comments about leaders and a willingness to take on risk. The most successful risk managers that I know, and I work with many on a professional basis in the world of both finance and defense, all share a quality of a finely tuned ability to compare rewards with risks and a sense of how close to the edge they can navigate safely or relatively safely. An unwillingness to approach the boundary condition limits leaders abilities to move to the highest levels of an organization where complexity and uncertainty dwell but conversely where the greatest rewards and risks also dwell. It is precisely the ability to successfully navigate uncertainty for the highest of stakes that distinguishes the qualities of successful senior leaderships in my experience.

Regarding cameras comments about the risk-averse boss: you can see here a case where the boss is overcome by his vision of risk that he can’t see the reward and cannot figure out how to successfully integrate the two into actionable decisions while at the same time providing protection for the consequences of the actions for the rest of the organization. He’s been promoted beyond his ability based on what you’ve described. An unwillingness to act to seize opportunity is a natural response to overwhelming uncertainty. A friend of mine who is one of the most successful commodity traders in the world has a program of recruiting talent which examines this ability. Carefully and it is clearly one that is affected by the size of stakes. He has traders who can trade million-dollar accounts professionally but who cannot trade a $10 million account because they get overcome by the number of zeros. It is the context of the consequences of our decisions which make the decisions more difficult on the inside than they may seem to the outside observer.

This is why I think Heifetz is discussion on creating a sense of false confidence to be so dangerous. I am much more interested in examining what the basis for a feeling of confidence is than trying to convince yourself through the power of positive thinking to go beyond your skill level

Carol: as you develop experience with working for new and different bosses, you find yourself with a standard strategy of how to size them up and find out what makes them tick so that you can work with them and for them? Do you find yourself spending more or less time with that the more often your bosses change. How good are we had really reading peoples take motivations and personal preferences and how much time do we take to be certain of what our first impressions lead us to believe?
I share your concerns about the trade-off between reward and risk when it comes to taking on experiments. As you have seen in my commentary on Heifetz, I don’t think they give this important judgment enough treatment.
Regarding Brenda’s comments about leaders and a willingness to take on risk. The most successful risk managers that I know, and I work with many on a professional basis in the world of both finance and defense, all share a quality of a finely tuned ability to compare rewards with risks and a sense of how close to the edge they can navigate safely or relatively safely. An unwillingness to approach the boundary condition limits leaders abilities to move to the highest levels of an organization where complexity and uncertainty dwell but conversely where the greatest rewards and risks also dwell. It is precisely the ability to successfully navigate uncertainty for the highest of stakes that distinguishes the qualities of successful senior leaderships in my experience.
Regarding Tamara’s comments about the risk-averse boss: you can see here a case where the boss is overcome by his vision of risk that he can’t see the reward and cannot figure out how to successfully integrate the two into actionable decisions while at the same time providing protection for the consequences of the actions for the rest of the organization. He’s been promoted beyond his ability based on what you’ve described. An unwillingness to act to seize opportunity is a natural response to overwhelming uncertainty. A friend of mine who is one of the most successful commodity traders in the world has a program of recruiting talent which examines this ability. Carefully and it is clearly one that is affected by the size of stakes. He has traders who can trade million-dollar accounts professionally but who cannot trade a $10 million account because they get overcome by the number of zeros. It is the context of the consequences of our decisions which make the decisions more difficult on the inside than they may seem to the outside observer.
This is why I think Heifetz’s discussion on creating a sense of false confidence to be so dangerous. I am much more interested in examining what the basis for a feeling of confidence is than trying to convince yourself through the power of positive thinking to go beyond your skill level

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Traders roundtable: how does position sizing compare to diversification as a risk management tool?

In a recent traders roundtable discussion, our talk came around to a discussion of two different risk management tools: position sizing and portfolio diversification. The question became: which one of these strategies is more effective?

The discussion led us to quickly reframe that question into one which said “how do both of these strategies, and others, allow us to develop a comprehensive risk management protocol for our trading strategies? First, a couple of definitions are in order.

Position sizing can be defined as a way to determine how many shares of your target to trade given your risk appetite, the size of your portfolio, your trade management skills, the market conditions, the normal and abnormal characteristics of the instrument your trading, the time of day, your mood at the moment of the trade, the robustness of your hardware and software systems and so on.

All of these factors taken together allowing you to establish an initial stop which will allow you to take a businessman is risk with your initial entry as expressed by dollars per share of initial risk. If you have done the calculus correctly, your average loss on losing trades should never exceed the amount you calculated your initial risk. If you discover that your average loss is greater than your initial risk over a statistically significant number trades, then there is some variable inside that list that you are improperly estimating and you are trading at too high a level of risk and therefore too large a position size for your trader quality number.

Portfolio diversification can be considered as the number of independent positions or piles of money that you will allocate into individual trades as a percentage of the total portfolio. Conventionally, we think of diversification as a poor man’s risk management by spreading the risk around we can expect to receive the average market return because things will tend to balance out. The greater the number of opportunities, the greater the likelihood that you will receive the average rate of return of the given system.

Taken together then we can think of position sizing as a tactical application of risk management to an individual trade that consider strategic variables when making specific decisions.

We can then think of portfolio diversification as a way to spread individual trade risk across a broad system in order to standardize our returns. This is more of an operational or strategic level policy decision whereas position sizing is a tactical application of risk management.

Our traders roundtable concluded that both of these working together should be more effective than either taken separately.

Blending them is sensible because they can be mutually supportive and effective trading strategies risk management process.