Frying by the heat of my pans…or, if you want to make an omelette –start with eggs!

‘What is in this fellows head?’ I hear you wonder…

I have only recently had a problem with weight. Carrying a little too much around when it’s not in your wallet is a chore.

I regularly attempt to gym ‘n swim; however, while the body is willing, the fondness for a curry and a decent draught of something worth drinking is engrained in my psyche and I am led by my inner satnav to a favourite haunt.

I write this as last night’s visit is fresh in my mind: it was a long day in the office and ‘duty’ called. I will refrain from listing the mouth-watering delights for fear of you will all disappear, leaving me to my own musings while you go in search! after all Brick Lane is merely yards from the City.

Evidence of over-indulgence!

I shouldn’t boast, but I am no slouch in the kitchen myself. I am wok-ed up, the spice cabinet is pungent and brimming and I assure you that I know my onions!

I am a creative cook and, while I have a store of recipe books from the world’s renowned chefs and cookie monsters, I rarely follow a recipe: a handful of this, a ladle of that, a soupcon here, a few drops there and finish with the flourish of the wrist and a sprinkling from the herb garden. Yes, in the kitchen I am a happy chappy.

If you don’t already, I urge you to get stuck in and feed your soul and sate your appetite. Being creative and carefree is good…but don’t take that attitude back to your laptop!

The sad thing is, I know people who trade this way – and it is not a good look, nor is it going to feed your account.

The secret to understanding how to trade, from a retail perspective, is to start with a recipe – and follow it!

To adopt a laissez-faire attitude and ‘just have a go’ because you ‘think’ something may happen is merely asking for trouble. I have met and mentored many would-be traders who would seem to do more ‘thinking’ than Einstein.

‘Why have you taken that position’, I ask.

‘I think it will go up/down’ is the common retort.

‘Ok, why do you think that?’

‘Because. Because I am good at predicting things.’

‘?! This is the forex market with several trillion USD of turnover per day; it has flows from the world’s central banks, hedge funds, banks of all sizes, global corporations. They are all trading. And then you have a range of funds, and algorithm HFT traders; oh yes, and there are a good few million retail traders as well. And then there is you. And you ‘think’?……’

I sigh. In fact, I privately weep. I weep for all the souls out there who ‘think’ when they should be in the kitchen, making an omelette – starting with eggs.

It goes on.

‘So what position do you think the market wants to take?

‘What position has the market got? What data and commentators are you looking to today that might affect the market and positioning?

I pose these questions daily to everyone; they are the meat and drink of any trader worth his or her salt.

‘I don’t know what you mean’ I hear back.

‘I just think ‘it’ will go up (or down)’ they continue.

 

Please get a recipe. Establish a plan. With ingredients.

What you want to achieve, how you are planning to do it?

What you might trade, what is your strategy, how will you start, enter, exit? Do you understand risk management? And it goes on.

Don’t just think. Please.

I have a meeting shortly with a client whom I have been mentoring. She does think. She thinks I am overweight.

I will start another diet tomorrow. I think.

Market Tutors Boardroom: A thinking session

However, before I do, we must recap on some of my recent recommendation/suggestions:

The equity markets are strong albeit in consolidation ranges: top-pickers like me should retire to the pavilion for a good rest.

As I prepare this the S&P is trading at the top of an approximately 60 point range for the last six weeks. Merely a dozen points above my sell recommendation a month ago, I am still short with a stop at 1917.

The EURUSD remains in consolidation and my short trade was increased; I am not holding out for a major move at the moment but certainly prefer trading the short side within the down channel; I will stop on a break.

The EURAUD didn’t follow through (similar consolidation) and I refrained from involvement.

EURCHF has traded quietly in a 50 pip range for the last week and am a happy holder.

The Nymex Oil long looked strong and at one stage was almost $3 in profit and I was taken out with $1.60 profit on a trailing stop when the price slipped in the early part of this week.

I never did get the chance to look at reinstating an interest in Arabica as the price settled and has traded in a narrow band.

Nothing is jumping out at me so I will watch and wait.

 

Author: David Horton is a partner in Market Tutors Ltd in the city (markettutors.com). He has had a significant career in financial markets; he is a trader and trainer with a passion for coaching and mentoring with a good dose of humour.

davidhorton@markettutors.com