I’m currently in the air on my way to Michigan, looking at the clouds floating over the Caribbean. I’m spending almost a week in the town where I grew up, which is probably the most since I was on holiday break in college. The ocean below still looks warm and inviting, but I know soon I’ll be facing arctic Michigan Christmas weather with my family.
Last week I had a breakthrough new trading idea. It’s something that I was beginning to grasp over the summer, but couldn’t quite formalize it into testable logic. This week I was staring at the markets during a volatile couple of hours, watching it go violently down, and then swiftly upwards. I had deja vu as I mentally predicted the moves before they happened, and remembered studying this during the summer, but letting it go by the wayside like many of my ideas. That hazy idea came back to me along with a little more clarity of how it could work, I guessed at some of the data I would need to backtest it with, and the very first sloppy test of it produced large historical returns. I only have 1-2 of these breakthroughs per year (although lots of mini-ones, and also several fake breakthroughs when I have bugs in my code), and this one feels more gratifying than usual. I hate when the market feels predictable, but I can’t act on my feelings because I don’t have a structured game plan on how to proceed. I don’t do anything just on feel; it has to have a logical rationale for why it is happening along with rigorous testing throughout different historical periods and scenarios. Admittedly many times my hunches are wrong (which is why I don’t trade without doing research first), but this particular phenomenon has been a common scenario that has happened many times that I hadn’t figured out. I imagine it’s like a musician with a great beat and chorus, but missing the lyrics. You know you have something, and you feel it will be a hit, but you need to put it all together. I already have a version of the idea that should be profitable, but over the next few weeks I’m going to go over dozens /hundreds of iterations as I optimize it. Finding and verifying new ideas is my favorite part of this work, except for maybe the first month of earning off of it. I don’t consider it completely real until that happens.
Besides trading research I gained some insight into being more conscious regarding the media I consume. I was by myself for the week and wasted a lot of time with TV/garbage internet. My energy was a little frantic due to the fear/excitement that overcomes me when I’m heavy into researching something that I’m excited about. Instead of relaxing with reading/meditation, I indulged with extra coffee, time-wasters, and drinks in the evening. It’s weird how great habits/routines can easily succumb to bad ones, especially when they’re not even that enjoyable. I realized last night that I need to replace some of my non-research downtime with reading, even if it takes a few minutes for my focus to come back after heavy computer work.
Some life-affirming content that I’ve been enjoying lately is the On Being Podcast/weekly newsletter, and the Brainpickings weekly newsletter. I go through periods where I can handle stressful and intense films/books and be relaxed when I go to bed, but other times I need to recharge more with something wholesome. A dose of poetry and new-age positivity each week is a good compliment for the blinking screens and money swings that I endure on a daily basis.
I might take a week or two off from blogging as I get settled from traveling and getting ready for the new decade. Wishing you all a Merry Christmas! Leaving you with a few pics of my presents, suburban Michigan outdoors (not exactly warm and inviting), and my family.
Andrew Manser 