Wednesday, February 20, 2008

Trading Themes for a London Wednesday

* Global Views - Spending time among the banks on Canary Wharf and the Mayfair funds, there's a palpable difference in view than on Wall St. To some degree, you see it in the difference in content between such publications as the Financial Times and The Economist and U.S. publications such as the Wall St. Journal and Barrons (which is why I subscribe to the former two publications alongside the Journal). The view is more international and connected to emerging markets; it also is more macro in view, linking rates and currencies around the world with equities, commodities, and economic trends. Such insight helps traders figure out what to be trading: which markets have the greatest promise--something useful even for short-term traders. Tracking ETFs is one excellent way to gauge these big picture patterns: check out this ETF overview from Kirk. I also like how Kirk tracks macro themes in his link posts and big picture trading themes in his "best of 2007" posts. The themes tracked by Abnormal Returns also cover international markets and a range of asset classes; see the link to the momentum trading research.

* Bermuda Triangle? - Trader Mike notes a consolidation pattern in the indexes that awaits resolution. I'll post the latest market indicators in my Twitter posts.

* Common Trading Wisdom - So much of common market lore is just plain wrong. That's why historical testing of patterns is important. Yesterday's market gapped up at the open and then closed lower. Common lore calls this a failure and assumes bearish implications. But Quantifiable Edges examines the evidence with a historical eye. Nice to see that Rob has started a newsletter to help traders follow historical patterns.

* Keeping Tabs - This is an interesting post on the importance of keeping track of changes to your trading systems and approaches from the Trade By Trend blog. I think the same logic applies to setups that short-term traders trade. By keeping track of changes you make to your trading--and their results--you're better able to identify the factors that make for enhanced performance.