🧠 What is trading REALLY?

This is a question that is one of the most debatable things ever.

Seriously.

Was having a discussion earlier and thought, ‘what a great topic to expand my thoughts over — thanks Twitter for giving me a topic to lazily talk about!’

(Honestly, coming up with things to talk about is HARD)

But here’s what I said, and I’ll further these thoughts here for you.

See, the problem generally is many view the world in black and white.

I would hope over the years that Macrodesiac and now Fink has tried to display that this ain’t how things work.

One of the key facets we have to broach is the way in which people constantly associate ‘recession’ with macro.

It’s almost like everything macro tends to point to recession for some.

My thinking…

Recession is the ULTIMATE surprise, so people constantly seek it through macro indicators.

If something is sexy.

Exciting.

Divisive.

Scary.

And most importantly, sellable…

Then it’s going to be spoken about.

Staying long all the time doesn’t inspire anyone to think you’re smart.

Timing an event that is generally a tail risk — that happens 1 time out of 1000 — damn…

That’s a dopamine rush.

But making money doesn’t have a correlation with sounding smart.

When I consult for retail brokers, I jokingly (but seriously) tell them to internalise the flow of ALL their high earning medical staff…

Surgeons simply cannot make mistakes.

They don’t know how to.

But at the same time, they take massive risk — taking a heart out of someone’s chest and putting a new one in is the biggest risk you can take, surely (outside of trading nat gas)…

What a perfect client to trade against…

Someone who doesn’t know how to be wrong, but takes risk.

Goldmine.

Same with academic macro bods.

They don’t know the trade, they just talk about complex things that don’t really matter and tend to simply have a conclusion of…

‘This won’t end well.’

…and because they are very academic in their thinking, they’re the same as the surgeons…

Unable to be wrong — rather than take a small loss at the first sight of being incorrect, they double down on their opinions.

You’ve seen it over and over, I’m not going to name and shame 👀 (I literally fucking will in the Discord, just ask me).

I'm wrong all the time.

I will hop into an FX trade because I see a nice short term momentum play that if it does start moving right away, other factors can come in that increase the potential trade duration.

But I want to be wrong QUICKLY and I’m happy to be wrong quickly rather than take weeks to be wrong.

The way to view macro is not through a frame of ‘good’ or ‘bad’…

Rather, we see macro through a lens of surprise and relativity, coupled with whether there is adequate risk to reward in the trade — a great determinant of this can be positioning and the extent to which the proposed market is stretched…

I actually prefer Lily’s definition of macro than my own…

Like, this is perfect.

‘Little ‘m' Macro’ is such a good definition.

‘Big ‘m’ Macro’ is the sell.

It’s how you gain a following or notoriety.

No one wants to hear about your EURCAD trade based off a CPI print 👀**

But everyone wants to hear about how China is completely fucked because its property market is going to the dogs.

It makes them feel something.

And no sale was ever done on rationality.

Ps. Everyone is at it. This came out right as I was writing LOL.

I wonder what they’re saying to clients, ay?

I can imagine how a phonecall goes with a buyside firm…

‘Yeah we think there’s some sort of recession that’s going to hap—’

*Puts phone down*, hedgefund changes prime broker.

**This was the trade idea from this week.

We traded nicely lower off the number.

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