From the Desk Of A Trader #18
"Anyone, anyone who tells you to trade intraday as a strategy either is an idiot or a conman"
Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, CL, ES, and NQ as well as our favorite altcoins.
Today, we are happy to share the thoughts from the desk of a commodities trader. The following views are that of Martijn Bron and do not represent the views of his employer.
From the Desk Of A Trader
"Anyone, anyone who tells you to trade intraday as a strategy either is an idiot or a conman"
This screenshot perfectly fits former Brevan Howard and Goldman Sachs traders chatting about day #trading and technical analysis.
The good thing about this short clip is that it is not scripted, and expresses how professional traders really think about the topic.
The first years of my trading career in Cargill I traded sunflower oil and meal. These were cash #markets, without an exchange listed futures market. Soybean oil futures trade at the Chicago Board of Trade, but did not correlate with sunflower oil, hence soybean oil futures were called a "Texas" hedge.
A Texas hedge is not a hedge, so adds risk.
When I was trading the sunflower complex, I barely looked at charts.
I spent my days in building and refining (pun intended) my sunflower complex supply and demand. I built the S&D myself, in Excel, and I knew what was behind every single cell with a number in it. I knew how confident I was about every assumption I had made, and what thoughts were behind it. Building S&Ds, refining them constantly, having them scrutinized by colleagues and asking them to shoot holes in it, constantly asking yourself, "does this make sense?", understanding the math behind the economics from raw material to finished product, and forcing yourself to create more granularity while it feels like boiling the ocean, is what professional traders spend most of their precious time doing.
What traders do with the S&D is looking at what is called a "carry out", which is a balance, a surplus or a deficit under the assumptions made in the S&D, at different points in the future, and relate it to the current price of the asset (I am now talking about #commodities), and make an assessment of what the price should be, in order to prevent an excessive deficit or surplus to materialize.
When you make an S&D, the main consideration is that the carry out won't happen, as the movement of price, up or down vs the current price, will prevent structural surpluses or deficits to materialize.
That price movement provides the trading opportunity.
But this price movement, or price discovery, is often a lengthy process. Even if you have the perfect S&D, the truth, the market may not trade or may not reflect that S&D for weeks or months. The S&D can be wrong or outdated too of course.
Therefore timing and sizing is critical.
Confidence in the S&D allows you to sweat out turbulence, short term noise.
I understand it is nicer to read about things you can achieve rather than things you cannot. I guess that is the appeal of all those "10X your life", "drink a liter of sea water to start your day" gurus on this platform.
But this platform also allows you to learn from pro's, who tell you how it really is, preventing you from wasting time, energy and #money, doing something professionals don't do, but laugh about.
So consider who you listen to. Pro's or finfluencers with no credibility.
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