From the desk of Louis Sykes @haumicharts
Welcome to this week’s edition of the ‘Louis’ Look’ column.
Every week I write a piece documenting what I’m learning through my internship at All Star Charts. You can read the previous post here. This week’s edition is a shorter one to keep on today’s theme of simplicity, so let’s jump right into it.
Earlier this week, the team put out a short discussion on market breadth with a group of technicians who use it every day in their arsenal. You can watch it for yourself here. What stuck out to me in the conversation was that they managed to demystify a topic, which is the butt of an incredible amount of confusion and ignorance in just thirty minutes. Even someone like myself, who knows very little about the topic, went away thinking I was a breadth master.
That’s the power of simplicity.
It made me realize that the process I’ve incorporated to learn new concepts in life, whether that be finance or an upcoming university exam, is one that technical analysts also employ. It’s what I’d describe as the Feynman technique, named after the most celebrated science communicator of all time, and here are the basic tenets;
- Pretend that you’re teaching a child the same concept
- Identify gaps in your explanation
- Learn the gaps
The question is, can you explain your investment thesis to an eight-year-old? If not, are you really worth your salt? Even Albert Einstein dismissed years of work in his unified theory of the universe simply because he couldn’t reduce his approach to something a layman would understand. Morgan Housel, who was recently on JC’s podcast, nailed this idea, arguing that “if you can’t explain what you’re thinking in a few sentences, it’s probably not a good idea.”
By reading the All Star Charts blog, I’ve managed to go from not even knowing about basic support and resistance to now understanding what top technicians are discussing. I think that’s what separates this blog from a lot of other financial publications, just how easily they manage to guide their readers through their process – they are practicing that Feynman technique every day with their content.
As someone who has been learning technical analysis, it becomes immediately apparent who truly knows their stuff just based on the elegance and simplicity of their explanations.
To echo JC, complexity sells, but simplicity wins.
Thanks for reading, and I encourage you to fire me an email at firstname.lastname@example.org so we can have a yarn about all the neat stuff you learned this week too.