One may wonder why I post infrequently on Maintrimmer Capital. There are a two basic reasons. I thought I'd share them here because the discussion itself sheds light on the woes of substantive financial media.
1) Doing Over Reporting
The main reason I find it difficult to post is because I spend most of my financial hobby time working on trading strategy development. If one is serious about trading and has experience with the markets, you learn quickly that there is no all-in-one solution to navigating the markets.
Every decision in trading design will have its fair share of benefits and problems. The complexity comes in balancing these issues while deciding what you want your system to do and determining whether it works. Sometimes, this means running a system for a few months just to get a feel for what it accomplishes. Every tweak sets you back as now your system parameters have changed, so you reset the clock.
This process is time consuming and takes brain power, but it is worth the effort and interesting in its own right if you like this sort of thing. This classic meme captures the challenge trading presents the mere mortal:
2) Market Observation or Market Prediction
A serious study of the market beats you over the head with a simple truth: the markets are fundamentally unpredictable. This statement is true in the sense that if they were, there would be no payoff to being a good trader.
The problem, however, is that anything that has an uncertain outcome that you wish to profit from can quickly lead you down the path to market spectating as entertainment.
This is the fundamental problem of the financial media. We all know it is exciting to gamble! The media knows this and so it floods the airwaves with professional speculators. People willing to say the market will go any which way with no real clue over what really will happen.
Some may have a clue, but the problem is no one person has control over the future. However, true market reporting then should be couched in probabilistic terms to have legitimacy.
To talk in this way is less exciting. Saying the markets might do x, y, or z sounds frivolous. On the other had, we all love someone who confidently tells us x, y, or z will happen with certainty. Humans are attracted to control and we flock to people who sound like they know what will happen.
Maybe, those in the financial media understand the probabilistic nature of markets when they tell us to hold stocks for the next few weeks after a big rally.
But, I feel they do the common person a disservice when they do not reiterate this uncertainty every single time they make a prediction. Yeah, its not as exciting to sound like you do not know for sure what will happen. But, should financial reporting be more about style or substance?
Trading can be gambling and it can be expensive entertainment for some. But, that will always be true, so why not focus with seriousness on the real risks and drawbacks of market predictions. This information often effects real people's real savings after all.
For humor relating to the fin. media, look no further than the way CNBC's Dennis Gartman is treated like a punching bag online by traders. To give you an idea, some traders propose actively taking the opposite side of every trade Gartmen suggests.
So what?
Even stockcharts.com, one online harbor for technical analysts, produces weekly videos and blogs that involve a round up current market conditions with hints at future direction. Therefore, useful ways exist to report on market activity without acting like a soothsayer. Both Dr. Wish and Chris Ciovacco also have there own way of sharing that have allowed me to enhance my own techniques.
I do want to participate in the online community of traders, but I am still working on how best to share my interests. At the least, I am happy to have my Point of Sail Indicator and Market Heat Index running everyday, which captures daily market moves in a numerical way. These indicators can be used to interpret relative movement in the markets.
You can see market breadth strengthen and weaken over time with the Heat Index. The Point of Sail Score can give you an idea of the relative overbought or oversold level of the market (3's and 4's are oversold and 1's and 0's are overbought).
The Point of Sail Indicator is also connected to a public trading system that is featured on dark-liquidity.com. Ironically, it is currently not trading as market conditions are not best for Longs based on its internal trend following rules. But, eventually, it will start trading again as the markets evolve.
Stay tuned for more as I continue to hone my interests. Do not forget that learning curve diagram above. It is not that far from the truth. I have been working on my trading identity for two and a half years now. I still have much to learn, but I am getting there.
