From the desk of Tom Bruni @BruniCharting
The Research and/or Trading business can be a very lonely endeavor for many, so I wanted to use this post to outline the role that collaboration plays in my process and why I feel it’s so important.
So what sparked the need for this post? To be honest, it’s frustration with myself for missing some obvious (in hindsight) signals and trading opportunities over the last few months.
We cover a lot of things in our universe of over 7,500 charts at All Star Charts, and in late December and early January there was a lot to digest. One of those charts is these Chinese A Shares ETF ASHR.
Here’s what I was seeing in early January as prices were testing long-term support, accompanied by a very large bullish momentum divergence.
And here’s that chart today…
Given the other mean reversion we were seeing across the globe and the other circumstances surrounding this chart, I should’ve been all over this.
It’s not that I knew this type of move to the upside would occur, but it’s the fact that the reward/risk was so skewed in our favor that it was worth taking the shot to see how it developed.
Missing things is going to happen, it’s all part of the game, but that doesn’t mean we can’t attempt to reduce the number of times it occurs.
So what was the missing link in this China ETF? Why did I recognize the signal and not act on it? I believe it was in large part because I didn’t talk to anyone about it.
That brings us to the three reasons why collaboration is important to me.
1. It allows me to see a perspective that I may not have seen otherwise.
Nobody sees everything the exact same way, all the time. Even JC and I who have a very similar approach to markets, disagree a lot. And every time we discuss our points of view, I see new evidence or a new interpretation of the evidence I was already seeing.
The point is, we learn from each other and both get better from it.
2. It forces me to defend my position against the professional skepticism of others.
This second part is super important. Have you ever been in a situation where a little kid asks you a question, you provide the answer, and they just keep asking why…regardless of what your next statement is?
While that’s more of just an annoying situation, as professionals it’s our job to be skeptical and question the things we hear.
Sometimes it’s malicious and people are trying to deceive us, while other times it’s ignorance or an honest mistake. Regardless of the “why”, the “what” is that we don’t want to be acting on incorrect information.
If I’m discussing a thesis with JC, or Todd Sohn, or Steve Strazza, or anyone else and they ask me a question that I cannot answer, then I know I haven’t done enough work. These are intelligent people that I know are asking the questions that matter and don’t ask things for the sake of asking.
Also, if I can’t explain it in a way that they can understand it easily, then I don’t know it well enough.
3. It creates a network of people that specialize in their own areas that you can draw upon when needed.
I’m 24 years old and have just scratched the surface of Technical Analysis, Financial Markets, Finance, and life in general, and know that learning is a lifelong process. With that said, there are only enough hours and energy in the day to work and I can’t become proficient in everything.
The good news is, I don’t have to.
Lean on others. It’s never been easier to communicate and find experts to speak with, read their work on a subject, and just gain knowledge from, in any way possible. It would be silly of me not to take advantage of that to improve our own process and performance.
But remember, it’s a two-way street. Add value and people will provide value to you.
As with everything in life, collaboration is what you make of it.
One of the pitfalls of collaboration that we must avoid is only working with people that we agree with or that agree with us.
In life, and especially on Social Media, it’s tempting to surround yourself with “yes men/women”. There are enough behavioral biases we’re susceptible to without us going out and creating more for ourselves by isolating ourselves or creating an “echo chamber”. We need balance.
One of the things I struggle with when writing is being too hard on myself about the quality of content I feel I’m putting out there. I have to remember that not everything I write has to be groundbreaking, nor will it be.
It just has to add value, and sometimes that value comes in the form of using the blog to think out loud and get feedback. You folks reading this are smart people and I get a lot of value out of interacting with you via email, on Twitter, through Mystery Charts, etc. and I need to do more of it.
With that in mind, I’m going to start using this blog as a sounding board more often than I do now. By doing so I’ll ensure that I keep learning, improving, and hopefully providing value to you all well into the future.
I just I ask that you help me help you…and thank you in advance!