At the onset of COVID-19, I decided to make the most of lock-down and learn a new skill: trading. After a lifetime in markets, day trading seemed too risky, too difficult/technical, or inaccessible to me.
I tried joining a trading room, I tried trading on my own, and I got into #fintwit - the collective name for financial discussion/posting on Twitter. After many mistakes and an unspeakable time commitment, I have started orderflow trading, which focuses on reading the market in real time to see what buyers and sellers are doing.
At the core of everything in markets is the auction process (see video for overview), whether this is a used car market or the S&P 500. Simply put, buyers and sellers interact in a marketplace. Sellers offer products for sale, while buyers ‘bid’ on those products. As such, prices are set based on what is considered a fair ‘value’. Everything else exists within this framework.
On my first day of grad school (2009), our economics professor said “Economics is so intuitive.” This irked me because economics is hard. All these years later, I finally know what she meant: viewing the market through the lens of the auction process just makes so much sense. Drawing on the economic principals of supply and demand, an intuitive concept, we can read the market.
I am convinced that trading can be learned with the right guidance and applied knowledge. I have spent probably hundreds of hours diving into the nitty gritty of orderflow and am eager to share what I have learned with others. I have attended courses, read everything under the sun, and dedicated a ton of time to this.
Ignore ‘indicators’, nebulous chart shapes, tips, tricks, or people selling a proprietary method. If trading was easy, everyone would do it, right?
Focus on learning the basics and gaining experience through reading market profile. A recent post from Visualize Value really stuck with me, and I reproduce the image below (accompanying quote from Empedocles in byline). While I am providing the ‘educational’ content, accompanied by strategy notes, your success as a trader will be a product of your experience, or a direct reflection of the time you put into it.
In closing, we all believe in our experience. It’s not reasonable to start trading out of the blue and believe that you can make money easily. Even the sharpest of traders will tell you that the market will continually humble you. But with the right information and dedication, you too can read markets.