How | stockbee

7/12/2007

How

Concepts are commodity. They are everywhere. Available for free.

Ideas are everywhere, but the most critical question is how.
Follow the trend- How
Buy strength sell weakness- How
Buy relative strength- How
Watch the stock that buck sell offs- How
You must manage risk- How
How is the million dollar question , which often is not answered. Execution is key in any concept. Coming out with new ideas or concepts is easy part. If you can translate that idea in to how, then you have a winning approach.
How to translate ideas in to workable solution is the key. For any concept there are many possible how. Once you start thinking about how do I execute it, your journey begins. If you read earnings is important , translating that concept in to "how to trade earnings" can make you money. Young companies do well, "how to trade IPO's" can make you money. The world is coming to end , "how to find profitable shorts" will help you make money from the calamity.

Mastering how is more critical than ideas. This is true not only of trading, but life in general. If you can translate concepts in to know how, you move ahead. In the corporate world the same thing applies, I have not seen a company ever lacking in ideas, but seen many which have no clue as to how to execute that concept.

6 comments:

F. said...

Hence, executive compensation.

garytt said...

How can one not be long in this great Bull Market!!

Pradeep, I still like to go back and read your article from Nov. 2006 on The Bullish Theory. Interesting how things are playing out since then. Life is good.

http://stockbee.blogspot.com/2006/11/bullish-theory.html

Pradeep Bonde said...

My new theory is that when Bill Rempel blog becomes the most popular stock market blog, the market will top. When it happens, sell your house, kids, wife, girlfriend, boyfriend and invest on short side. Till then keep buying all dips !!!

Bill said...

You must have seen my recent post celebrating new highs ...

http://www.billakanodoodahs.com/2007/07/new-closing-highs-in-spx-and-indu/

market operator said...

Pradeep, I have learned a lot of from your blog. In a nutshell, in equities there are specific catalysts that can signal the start of a trend. These are identified thru price and volume action.

I have been trying to apply some of the same thinking to other markets, mainly commodities and currencies. Lets start with currencies, since the spot market is traded OTC and is the MOST liquid market out there, volume measurements are unavailable. Volume IS available on currency futures and some research shows that the Commitment of Traders Report has some predictive abilities but only in hindsight.

So what else, I found another paper: Order Flow and Exchange Rate Dynamics that finds a strong correlation between exchange rate movements and interbank dealer flows. So this is a promising start! Where to get interbank dealer flows, the paper gets the data from Reuters 3000, something I do not have access to (yet)!

I believe in a previous comment you mentioned you had looked at some of these other markets; do you still have any interest in these markets and have you done any research into it? Can you suggest any papers? Do you have any further suggestions as to how I may go about formulating a methodology for currencies similarly to what you've done with equities? Thanks!!

Pradeep Bonde said...

Yes, I do trade futures. Futures are easier to trade mechanically.

When they trend, they trend for longer duration.

As to currencies futures , they are excellent for trading using mechanical rules.

Currencies are driven by interest rate differentials.

One of my goals is to become CTA in few years.