Preparing to Win in Markets

I have been spending significant time each day for the past six months preparing for a return to active trading.  During that time, I've developed a method for identifying and analyzing aperiodic (non-time based) cycles in markets.  I've also refined a multivariate method for modeling stock index futures based upon a core set of technical drivers of price action and standardized my methodology for conducting historical market queries to greatly reduce bias and the odds of overfitting market data.  Finally, I've culled my intraday indicators to focus on the few that best track whether or not current market action is falling in line with the forecasts from the cycles, models, and studies.

It's a lot of work.  But that's how you build a business:  you spend days and months crafting your products before you ever make your first sale.  And the crafting never stops, because the marketplace never remains static.

In coming days, I will begin sharing a whole new set of posts.  These will be labeled "Preparation".  Some will be sent out as tweets from @steenbab via StockTwits; others will be included as short blog posts, depending on the content.  Preparation posts will be sent out only if I see distinctive potential opportunity in markets or have special observations that could be useful for traders.  All will be sent out prior to the U.S. stock market open.

Meanwhile, here are a few preparation resources I'll be relying upon to start my market day.  A more complete list will be the topic for a separate post:

*  Financial blog and journalism summary:  Abnormal Returns - Take a look at the links for the day.  There are posts pertaining to markets, trading strategy, the economy, you name it.  You would have to spend hours to replicate the curation accomplished by Tadas.  Combine with your favorite news feed and you have a great resource for staying on top of current market thought.

*  Stock picking:  StockTwits - Punch up a stock or ETF and you get a chart.  Click on the tabs above the chart and you see the number of messages posted about the issue and the social sentiment for those shares.  Click on "heat map" on the top menu bar and you'll see social sentiment across sectors over varying time periods.  There is a lot of information here, folks--even apart from the content of the people you like to follow.

*  Charting:  FinViz - News, insider trading info, charts, stock screening, creative heat maps that track stocks and sectors, performance tracking by stock groups, tracking of futures and forex--and that's just their free information!  This is one of the best (and underappreciated) financial sites around.     

*  Indicators:  Index Indicators - This is where I get my breadth data, but there is a lot more information on the site, including put/call data the ability to run basic queries.  Mo has done an excellent job of including technical perspectives on international indexes as well as U.S. ones.

*  Analysis:  Stock Spotter - John Ehlers and Ric Way track cycles and more on this site and include real time stock picks and a full track record of past picks.  The Swami charts take a bit of getting used to but incorporate quite a bit of useful information in a single view.   

Life is a team sport.  One key to success is selecting the right teammates and resources.  There is too much going on in the world--and in markets--to stay on top of it all by yourself.  Preparation is easier when you can also rely on the quality work of others.  I hope to be able to contribute quality work to your trading efforts.

Further Reading:  Three Myths of Trading Psychology