What Do You Value Most?

This morning I am going to skip our usual short term update in order to cover a topic that’s been slowly simmering in the back of my head for a few months now. Since its inception in late 20008 Evil Speculator has gone through various format transitions, partially in response to changes in our approach but also in order to deliver what I believed has offered the most value to you as traders. Some of you, who were around back in the early days, may remember that my work then focused mainly on market direction, predictive analysis, and only some occasional entries.

Since then my focus has heavily shifted in favor of actual hands-on trading – meaning primarily setups, campaign management, market psychology, and various qualitative aspects of trading. I do mix in a healthy dose of probability analysis, e.g. when we are in the midst of a campaign, where are the next support/resistance levels, when should we advance our stop, take partial profits, etc. And to spice things up every once in a while I post long term updates that focus on weekly and monthly charts, highlighting the current trend, reversal clusters, major inflection points etc..

Now I pride myself on the fact that my paying subscriber exhibit extremely long retention in comparison with other subscription services. In fact I have quite a few people who have been members since 2009 when I introduced the hybrid blog model here at Evil Speculator. That’s six years! And very very rarely do I receive any negative reviews or nasty emails from my readers – barring of course the occasional troll. Not a week goes by that I don’t get a message thanking me for what I do here at the evil lair and I’m being asked to keep up the good work.

It even goes so far that many people deciding to take a break from trading and thus canceling their subscription write me letters explaining their motivations and that they are hoping to return in the near future. Which by the way is always very much appreciated. And I’m not fishing for compliments – I rather have you tell me that my work sucks and exactly why instead of simply canceling and walking away. Perhaps there are reasons why a particular person has failed in their trading endeavor and I have spent quite a bit of time behind the scenes trying to point people in the right direction. Whether of course they choose to make the journey is another story.

So obviously it seems that I’m doing something right. Over the years I managed to build what started out as nothing but a personal muse aimed at self improvement and public disclosure into a little side business. And quite frankly for me personally it’s therapeutical as I’m a social person by heart – trading in essence is a very lonely profession. Scott often insinuated that I was wasting my time here and that the rewards weren’t worth the effort given my personal trading activities.

However I counter that sitting down and actually spelling out what I think every day helps me immensely, especially when knowing that once published it is out there and cannot be retracted. I challenge you to do that every single day even in front of a very small audience and you quickly realize that there is no escape – your thinking process, your track record, your weaknesses, your biases – it’s all out there for the world to see and judge. And for me personally that’s been an extremely humbling but also stimulating process. I don’t think I would be the trader that I am today had I not started my little digital den of doom back in 2008. The rest has just been extra gravy.

So I should be happy right? Life is good – quite a few people seem to value my work and my admittedly strange sense of humor. I am even in the process of preparing to launch a little mini fund that would leverage some of the automated strategies I have developed in the context of master-slave accounts. Think more short term versions of Thor or CrazyIvan being auto-traded in your own trading account but with full access and with the ability to pull out at any moment. I think over the long term that could be the final and most exciting addition to the various services offered here. Possibly also one of the most challenging as you can imagine.

However, all that said, I must also keep in mind all the people who have come over the years and then wound up leaving. There are literally thousands of them who either didn’t see any value in what’s offered here or didn’t manage to actually benefit for some reason. Perhaps due to their own failings or I didn’t do a good enough job guiding them. Of course I have to concede that I’m already a rather busy bee considering my own trading, my blogging duties, offering customer support, developing new tools and strategies, bug fixing, etc. etc. Not a day goes by that I’m not facing a long list of chores and you recall that I only rarely have taken vacations over the past few years – if I did they were rather brief in duration.

On top of that there is the realization that most likely the majority of you guys rarely participate in the campaigns that I dish out here on a daily basis. Quite frankly it’s been the bane of my existence recently. Obviously a good portion of the setups we post will either not trigger or go to stop out. But that’s not the point as it’s part of the process – even the best traders don’t exceed a 60% – 65% win rate over the long term. The difference is the campaign management and that you take that next entry over and over again.

As I always say – trading is very simple in principle – just show up and keep taking that next entry. But for some reason many of you are either cheery picking or are perhaps using the setups in context with other trading activities. Quite frankly I wouldn’t know as very few of you are actually using the comment section to post your trades. I see plenty of trading related discourse, opinions, funny pics, a few charts here and there, but rarely do I see folks actually report their activities on an ongoing basis. Yes, there are a few exceptions, so don’t get upset if you think you haven’t been acknowledged.

So I wonder if the current format is really what benefits you guys the most. For instance I started the morning briefings when I moved to Spain as my time zone gives me the advantage to hunt for short term setups while you guys in the States are just rolling out of bed. In my mind that’s an excellent opportunity to quickly get up to speed with what’s hot and what’s not – assuming you are in sync with my particular market lens. Which is why is it a bit surprising to me to regularly receive very limited input on the various campaigns posted. I’m not saying that in order to complain – it’s just a bit flustering to put out what I believe is quality analysis and actionable hands-on trades if the majority of my my readers dismiss it.

What complicates matters is that I’m not even sure if your opinion really counts. Now before your head explodes – please hear me out. Every good teacher or mentor, no matter in what discipline – may this be martial arts, science, or trading – learns at some point that what people want and what they really need are two different things. Sure you may want to see more directional market analysis, weekly updates, or content related to the technical aspects of trading. But is that really what you need in order to be successful?

I actually learned that lesson back when I was working as a software engineer. Users and early testers would be eager to tell you about all the new features they would love to see implemented. But over time we all learned to ignore their incessant and every growing wish-lists and instead focused on their behavior – meaning, what they were actually doing with what we had built. As it turns out people usually only use about 10% – 20% of a software’s features about 90% of the time – the rest is still needed but not mission critical. So you focus on getting that part as perfect and as stable as possible and the rest is simply an added bonus that keeps you competitive on paper. Meaning people want more and more features but use very few of them.

So back to the world of financial blogging. I have attempted to implement that experience here at the lair by experimenting around a little. Last year I introduced a little shift by challenging readers to submit their own stories and to focus a little more on the qualitative aspects of trading. Most people focus only the quantitative aspects – the technical analysis, the entries, the campaign management rules, capital commitment guidelines, etc. But sticking with a system through a rough patch or what to do when your hit six or seven losers in a row – that’s rarely being addressed in the open. Sure there are a ton of books and blog posts on it if you dig around. Van Tharp has devoted quite a bit of attention on this topic and so have trend traders like Richard Dennis or Ed Seykota who hosts his trading tribes in many major cities.

Surprisingly however there was very little interest here. Personally I understand that this is not a favorite topic among traders as we are all suffering from some degree of the Dunning-Kruger effect. As Bertrand Russel quipped: The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt. So perhaps it’s my fault for not pushing the topic more vehemently but in the end I must also yield to what’s most warmly received here. One reader once jokingly told me that in the world of financial blogging most people were looking for easy answers and get rich quick solutions – here at the lair however I was offering years of hard work and self improvement. Which in a way convinced me to focus on setups setups setups – perhaps getting you guys to get with the program via osmosis. Change takes time, especially if you have ingrained a set of bad habits/behavior over the course of years or decades.

So in summary what I would like all of you to do is to sit down and spell out which part of my work has helped you the most and which you could dispense with. You may think that you would benefit from more long term updates but would those really help you in taking that next trade? In the end what really matters in this game is the bottom line – you can have spent decades showing up for work every day but if you fail on a continuous basis then it’s a wasted effort. Also try to consider in which areas of trading you are lacking and which you know need improving. That may be on the technical side or perhaps fall into the psychological aspects of trading. We all have weaknesses and every day is an opportunity for improvement.