This week I spoke with Alex Barrow, the Chief Strategist and founder of Macro Ops, my former partners.
In this podcast we talk about the Democrats sweeping the US Senate and the Presidency, the continuation of the bull market and a whole lot more.
A nice long episode to consume this weekend!
Enjoy it on:
We did a massive backtest on the Bear Volatile Market Regime, it seems that everyone is talking about a new bear market, here's some insights from our resident backtesting machine Grant (by the way, give him a follow and thank him on Twitter!)
We had Grant do a monster backtest of the $SPX from 1962 to today, of only the bear regimes, either determined by SQN or by an obvious price action flip. As your skills develop as a trader, by doing these massive backtests you can rely less upon the SQN, a lagging indicator, and more on price action. This is represented in Grants manual backtest as you'll see he entered some markets while not in bear volatile or bear quiet regimes.
I have to say, I could feel Grants frustration through this backtest. He mentioned to me numerous times how hard of a time he was having trading bear regimes on a daily basis.
Over nearly 60 years of trading this returned 15.77%, who wants that sort of return beside people who refresh ZeroHedge all...
It's an end of an era, well a few months of making some pretty big piles of cash at least.
Why you ask? We are moving from Bull Quiet to a Bull Volatile market regime.
The main characteristic of a bull quiet regime is that you just want to be long and you want to add as much as you can to the long positions while in this regime.
You want your biggest exposure in this regime, levering up a lot.
You want to own the best performers and leave the weaker performers alone.
And you do not want to get caught up in the game of buying the under performers expecting that they will catch up to the leaders, you might make some money but you will do far better by the leaders even when it seems that they are too expensive.
This is a trap that middle skilled traders get caught up in.
Low skilled traders and high skilled traders have no problem with taking these types of trades.
Look at the Futures on $ES and $NQ, where Nasdaq futures were clearly in charge this...
I got a lot of emails and DM's from traders asking me my thoughts on where the market is going to go from here, what's my price target?
The truth is, I don't look at markets that way. When I got long $NQ Futures back at around the beginning of April, I wasn't planning to be on the doorstep of 10,000 NQ by summer.
And to be clear, this is not a victory lap of me catching the bottom and piling in long from the very bottom and buying a Lamborghini. Nor was this a VBO or FVBO trade, this was me applying my knowledge of price action and how it (price) behaves in different market regimes.
Me getting long on April 5th was not expected to be a 2000+ point winner (updated to 5,000 point winner), with multiple adds to my positions. I had no special perspective on where I thought the market was going to go and I certainly didn't expect to be putting in new highs with all that is happening in the world.
All that is happening in the world and what we were dealing with on April 5th had...
After over 20 years of trading, and more importantly putting in the work to improve my trading day after day, week after week, year after year, I've learned a whole lot about what really matters in trading for a career. More importantly I've learned a ton about what doesn't matter all that much.
So when I get marketing, ahem, trading gurus, sending me information about signals and hot watchlists, I can almost guarantee that they really aren't professional traders who value the hard work it takes to become excellent at trading. But they are really good at marketing and getting traders to waste money on something that really doesn't provide true value.
This is why I put so much effort in to getting really useful information out there to you. It may not be sexy and optimized, it may be a bit drawn out, I may cover a subject over and over and over, but it is because it is DAMN IMPORTANT!
One of the most important parts to successful trading is understanding...
It was a busy week (and weekend) with the cryptocurrency markets taking a lot of our focus. In fact this week our busiest channel in the Lab is the Crypto channel, by far.
I won't make this email all about crypto but I want showcase some of the trades we took this past week.
This is from an email I send out to subscribers FOR FREE. Sign up and get emails like this weekly
(I go a lot deeper on market regimes down below, stay with me!)
To be fair, it was pretty easy to make good money in the crypto space last week. But there were a number of members in the lab who didn't know how to access the markets, didn't understand security, didn't know what assets to trade and generally would've been lost without a network of fellow traders to lean on.
You'll notice that you don't see any SQN indicator or ATR indicators on these charts, you might say "But Chris, you are the regime guy, how do you trade without the regimes?"
If you aren’t a part of the Pollinate Trading Lab you are missing out! We have a great bunch of traders in there now sharing backtests, setups, knowledge, code (for those of you who are interested in using AI and algo’s), we even have a shared Google Drive of all our resources available for members.
This is not a signal service, don’t join if you want someone to tell you to buy $F stock at X price or short $FB or whatever.
Rather if you want to have access to a bunch of real traders who are talking about the various setups they are seeing and what they are looking at doing in the markets that day, this is the place to be. We have traders from hedge funds, prop traders, family office traders and professional traders who have been trading for years (decades).
If you find trading to be isolating and have questions but just don’t know who to ask, how to ask it or simply want to have a place to bounce ideas off other like minded traders, JOIN US...
Earlier this week I wrote about trading the different Market Regimes based off of the SQN Indicator. To be clear, there are a number of ways to go about categorizing Market Regimes, and the SQN is just one of them.
Being able to categorize a market by regime is extremely useful, but without knowing the characteristics of the regimes (and how to exploit them for profit) is where the real power is.
Let's look at a couple of different ways to categorize market regimes.
Macro Economics - this is probably the most quoted and talked about in business news, think interest rates, unemployment, growing GDP, PMI's, etc.. You will find no shortage of market categorization and predictions from this regime.
Low Volatility/High Volatility/Trending/Mean Reversion - One of my favorite and most useful ways to categorize a market regime. This can be done using indicators like SQN and ATR (which I've written about before). These are derived from the actual price direction or the...
Today Chris does a solo episode going into how he uses systems for long term and short term investing and trading the markets.
It all starts with market regimes and matching the assets/markets incentives to that regime.
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