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A system for speculation

There are seven ways to improve the art of speculation.

Latest cheatsheet:

1. 🔎 Find your price driver - build a macro argument based on probabilities

How good is the quality of the price driver? If I look at the BOE and ECB, how wide is the divergence?

We are looking for chalk and cheese, opposites attract.

2. 🖐 Execution is important - most get stopped out where they should enter

The key to great execution is being able to assess market participation and price action.

3. 🛠 Start small and leverage winners - from one brick build a house

Reverse engineer the retail blow ups! Start with a core unit, when it starts to pay, and the drivers are working, you can add some more. Treat it like a business!

4. ❓Has anything changed - reassess trades everyday at the roll

Don't think about the chart here, focus on the macro drivers. Are negative rates still in play for BOE? or have they changed their view on No-deal countermeasures?

5. ⛓ Remain nimble - do not get married to a position

If we don't like what we see, if BOE turns hawkish, then we can just take the position off. Understand where is enough and admit where you are done.

6. 💫Stay in the moment - perception matters more than reality

If you can understand and outguess how perception will change, then you will be very profitable. Where's the sweet spot? How is the market positioned?

7. 😬 A life and death showdown - everyday is high noon in the markets

Market participants are profoundly into the game. So much so that everything else in life seems unimportant.

Threadneedle Street becomes the world as your opponent will keep trying to outmanoeuvre.


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