Reps, Research, Results

Everyday I “overtrade”

I trade a ton of positions. Our playbook has dozens of identified scalps. I’m constantly reading the tape and jumping in and out. At first this was a huge leak. It still may be. However I am confident that it has accelerated the feedback loop of my improvement.

This is what my broker terminal shows me almost every day.

Heaps and heaps of trades. I’m proud of it though. We are developing our own styles. Sometimes my click-ins look like a crackhead.

Taking more scalps than the Iroquois.

Those trades include a lot of scaling in and out of smaller share sizes and I rarely was in for my max position size at any point. And I netted around 15% of my max position size from these trades after a number of errors.

I’m sure I might look back on this post a few years from now and ask myself “what was I thinking?” trading like this. But it’s getting me somewhere. My intuition for identifying weak tape, what SHOULD be happening, and what COULD happen has improved dramatically. I have the same “reads” now like I did when I was playing poker. I frequently draw circles where I expect price to go, or when I think price is dislocated from where it ought to be, if it’s overextended or what have you. And often price goes where I expect. And now I take trades on the basis of my gut and they work.

How can I argue with that?

As for “Research,” I’ve started doing some heavy duty statistical analysis with AI and am constantly running it in the background, when I am away from home or asleep. The progress is incredible. I had intuition about a particular anomalous price action I started to notice, identified it, backtested it, demarcated parameters for go/no-go and then implemented it today when the circumstance arose and it was one of my most profitable trades. I am extremely excited to see where this will go over the following weeks and months.

It is deeply reminscent of when I was training myself to play poker and I would pull up Propokertools’ Odds Oracle, software used to model raw outputs of specific combinatorics and frequencies for different sections of the game tree. I would run through models for hours, recording the results in spreadsheets and noting minute differences to train myself. Now I do that with an AI and a variety of different types of data.

I have a dashboard with a backlog of projects that I am chipping away at and generate briefs so I can concisely communicate my findings. It is a new chapter of trading for me. I started clicking in exactly three months ago and the journey has been a wild ride so far.

I net won both yesterday and today, a total around 30% of my max position size. I’m adjusting my trading size, scaling in and out of positions (like I used to tell myself that I needed to assimilate into my game), and I am managing my risk in different configurations of the tape. I am more decisively trading and more mechanically fluent to translate my intentions into reality. My awareness for low frequency disruptive abberations is expanding and I balance my size relative to share price, market cap, volatility, and relative volume so that I am positioned appropriately. I am “out of position” less often in trades and I am improving the quality of my entries. I am working on holding winning trades for longer (with nuance) and cutting losing trades more quickly (you just have to hit out sometimes). I also am reducing noise when I have to focus on specific positions and cutting my size when trading earnings. I am recognizing which parts of the game tree I have more and less familiarity with, respectively, and using appropriate size to mitigate losses and swings.

I am immensely proud of my process and cannot wait to continue each day.

Till then, OTN.