Brett Steenbarger: Overcoming Boredom and Overtrading

This is really a great post from Brett Steenbarger that sheds light on perhaps the most important point about trading. 

Trading for me is not about the excitement of entering and exiting from positions or making money. Though, the latter is the final goal of the whole exercise. The point is that if I do everything well, if I continuously improve myself and try to be more and more professional, it must be profitable at the and of the day.

Trading is about continuously feeding my intellectual curiosity. Finding out the real cause and effect relationships behind price moves and try to project or feel what is to come is the goal. I like the video How The Economic Machine Works by Ray Dalio. It is a good example how we should think about the economy and the markets. We should try to find the main cause and effect relationships, positive and negative feedback loops and create a simplified model of the issues we try to understand. Each model has a great deal of simplification as our word is extremely complex. But, having a simplified model that covers at least a few very important relationships always better than just tossing a coin. This makes trading so much different than "pulling the levers on slot machines".

Strategies update after the US election

I tend to agree with people who say that Trump is best in raising money (especially debt that he sometimes doesn't even repays). So the bottom line is, that we might expect much more US government spending (mostly infrastructure) financed from the markets. So I add long PKB and CAT to my Asset Classes Absolute Return strategy. Whereas, I think the renewable industry is not going to enjoy much support, so I add FAN short. It is also widely mentioned that less regulation would help the pharma and biotech industry, so add PJP and XBI longs.

I add AXP long

and HD short to the Equities Market Neutral portfolio.

Risk-Off

Markets are clearly in risk off mode today, most likely it is to do with the upcoming US election. I would refrain this week doing any risk-on trade as the risks are pretty asymmetric that puts the odds against any such trade. 

Economic Data
Both BOJ and RBA announced the leave the rates unchanged. Aussie rallied whereas JPY is unchanged. CHY Manufacturing PMI was much better than expected.

FX
CHF and Gold gained some 0.90. CHF is sharply down after a HS formation (4H chart). 

EUR exhibits a nice relief rally as I don't think it has anything to do with the risk-on sentiment. The short side was simple too crowded. Though, I try to fade the rally as I think it is technically driven.

The AUD rally was sparked by the RBA  on-hold decision. I don't have much faith in the move so I probably will look for shorting it on lower timeframes. 

Perhaps the NZD is a better short should AUD turn north.

USD/JPY looks bearish as risk-off developed. I would see how it develops and look for long around 104.00.

Equities

Both SP500 and DAX are near pivot point especially the latter one and it looks just before falling off the cliff.