This was initialy part of the article about creating an efficient trading routine but I had to take it out in order to not go overboard with the length.
This article is self-centered as I am about to reveal my biggest failure.
I nevertheless believe that this odd article posses a high educational value so I decided to share it.
In the following I’d like to show you how you can easily deceive yourself when it comes to running a trading routine.
I maintained a sophisticated Excel spreadsheet in my early years which turned out to be a collossal waste of time. It robbed me of at least a full-year, if not two!
Before we jump right into it I want to make clear that this article is about how it shouldn’t be done!
So let’s go:
Here’s a screenshot of a breakout system I created where breakouts in many different groups of stocks are monitored (High earnings growth, highly speculative, high relative strength, large and small caps…)
This subsystem was fed with 10 screens alone and I created my own breakout index on the right. This here is just the front end by the way and there was a lot of data crunching going on other tabs.
Here is the whole ‘wallpaper’ of my so-called trading routine:
The green area which is seventh from the left side is actually the aformentioned breakout system. So there was a ton of other stuff going on. Each days open, high, low, close price and the volume of the nasdaq composite, S&P500 and NYSE composite as printed on the first page of eIBD was copied into the spreadsheet.
There was everything in there, trust me on that!
One complete row (day) was filled each and every morning with 67 single data points for over 465 trading days straight. I only missed a couple data points during that period when MarketSmith (the tool I used back then) was down or when I was real sick and unable to get out of bed before the daily premarket data reset.
I was even sitting in front of my laptop with a lousy internet connection while being on vacation in spain every morning from 5:00 to 6:30 AM while my wife and friends slept until 10:00 AM. I was dedicated for sure.
I certainly did the thing right… but I was not doing the right thing!
Similar wording but completely different meaning!
In hinsight this is so insanely stupid and I can’t believe that I tried to gain an edge doing all this.
All that data was then automatically displayed in proper fashion for me to gain unique insights, at least thats what I believed. The output consisted of a 6 page PDF document. The actual bar charts are all computed in excel manually and it was a pain. I could even scroll back in time and then print whichever time period I wanted.
My “holy grail” report!
Lets have some fun and go through the pages of my ‘holy grail’ stock market report 1 by 1. And you should know that I did this only for myself and never shared in anywhere. I truly believed that looking at the data was going to lift my trading on another planet, while in reality I slowy drowned in data.
Next is an example of the secondary indicators. As you can see even the exact money printing rate of the FED was monitored in 2014 . I came up with my own small/large cap volume oszillator in order to see where the volumes goes. Advance/Decline ratio was there but also the Advance/Decline volume ratio. I am not sure what my thinking was at that time.
Here I created a relative strength based overview of all the major sectors. Data came from a screen and I had to actually read and then paste the daily closing price of each ETF into Excel before calculating the relative strength against the S&P500.
Alright the next one is the last page I will share as the remaining two pages had been portfolio related.
Here all quality breakouts have been tracked manually. The red bars are failed breakouts if I recall it correctly. I tried to judge the quality of accumulation days by checking how many stocks with great fundamentals actually made fresh 52-week highs that day. And I also tracked the blocktrades as printed in eIBD, because …well… why not.
The reason why I show you all this is so that you guys truly understand that this route leads to a blind end.
A routine must be slim and effortless first and foremost. All the effort I put into the mess above did not translate to an increased trading performance, actually the opposite was the case. And I was trying hard for multiple years until finally realized that I was on the wrong track. Whenever I failed I came up with some more data because I blamed a lack of data for all my failures early on. In hinsight it is clear that I simply overloaded myself with information and my brain had no idea how to prioritize the input. I increased the entropy of information until I was simply confused 24/7.
To be honest with you I actually feel some anger now that I see it again. I spent so much time doing the wrong thing at the cost of the people around me. I am so glad that this phase ended way before my son was born.
I travelled too close to the blackhole and stayed for a little too long. If you know the movie ‘Interstellar’ you can relate. As a result I probably prolonged my learning curve by a couple years which I will never get back!
Whenever you think about gathering data and checking indicator after indicator remember that I did all that and it truly got me nowhere. And I am trained to look at graphed data and drawing robust conclusion from them.
Today I focus on only a handful pieces of carefully selected information which proved to work for me over the years.
And I am working very hard to shield my mind from all the noise out there. My routine nowadays is slim and effortless and it yields me all the crazy stock movers I every dreamed about in my early years.
But who knows, maybe all this was needed to teach this rational german engineer that stock picking is an ART and that you won’t get the results you desire if you try to FORCE it.
Enough said, time to forget about this monumental failure of mine!