The Mixed-Up Files of SEMI Collective (Part 4)

I’ve been going through my “drafts” folder this year trying to finish partially-written blog posts and get more organized. This is another series of unfinished posts.

From October 2016, I have a post about the SEMI group concept. I also had four other incomplete drafts. I have cursorily looked over these drafts along with the actual post. The content is different.

I resurrected Part 3 here. In the longshot case that someone out there could possibly benefit from any of this, here is what I believe to be Part 4.

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In a sense, I want to outlaw from this group what Planet Fitness outlaws from their facilities. Like Planet Fitness allows no “Gymtimidation,” I want no “Fin[ance]timidation.” Like Planet Fitness has a lunk alarm, will we have an alarm for excessive egos. If you believe strongly about something and have verifiable data to support it, then perhaps we can work together to evaluate the results and the conclusions. If you bring only baseless claims (including undocumented personal trading performance), then I don’t really want to hear about it.

I want this group to be different.

I want to gradually move discussion toward the topic of trading as a business. This is what I do. I believe trading full-time is certainly possible with a different mentality/outlook than that commonly discussed. I hope every session includes actionable information that brings us closer to our trading goals. I also aim to discuss and develop the skills required to manage our own money. I don’t rely on outside “financial professionals” to manage my money and I strongly believe you shouldn’t either.*

I want this group to be different.

We will talk a lot about marketing, advertising, and fraud. I believe the experience of being conned offers a solid head start to failure in the financial space. I have communicated with many who have lost money to bad brokers, to investment newsletters, and to expensive trader education companies. We will talk about classic fraud and the role of heuristic thinking in making us believe things are better than they actually are. This increases probability of becoming the next sucker.

I want this group to be different.

Most everything we discuss in this group should relate to financial literacy. I want to help you develop and learn. What you do with that knowledge in your efforts to profit is up to you. I believe you are ultimately the best person to manage your own finances—not a professional adviser, not a canned trading system, and not a newsletter—and our discussion will periodically revisit this point.


* — For the great many, I have since changed my mind on this matter (see paragraphs 3-4).

The Mixed-Up Files of SEMI Collective (Part 3)

I’ve been going through my “drafts” folder this year trying to finish partially-written blog posts and get more organized. This is another series of unfinished posts.

From October 2016, I have a post about the SEMI group concept. I also had four other incomplete drafts. I have cursorily looked over these drafts along with the actual post. The content is different.

I resurrected Part 2 here. In the longshot case that someone out there could possibly benefit from any of this, here is what I believe to be Part 3.

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Debunking common myths or evaluating supporting data involves application of critical analysis to financial claims. I have found many claims in the financial space to lack supporting evidence. Laypeople seem to think claims are justified when presented by “financial professionals.” I strongly disagree. Claims without supporting evidence may sell mutual funds and financial advisers but they will not help me trade. Failure to properly identify and avoid baseless claims will likely leave me chasing losing endeavors that will drain my capital and my spirit. We will strive to always be aware of this common pitfall.

I hope you will not misinterpret my willingness to share as a hypocritical large ego of my own. I ultimately want to hear other group members doing much/most of the talking but I am willing to do a lot of talking to get us started. I have a great deal to say from full-time trading experience. I can share my mistakes and many of the things I have investigated. I can talk about others’ ideas and teach basic fundamentals of trade vehicles and strategies. I am passionate about the importance of understanding what we don’t know and at times I tend to get loud in debunking hollow or inconsistent claims of others. I certainly may be wrong about anything at any time, and I will remind you of that. We should all feel free to confront when we perceive data (or lack thereof) to be inconsistent with the conclusions.

Think carefully about whether this group is for you because it does warrant a minimal level of commitment. Scrolling through Meetups, I see various excuses from people about why they cannot attend (e.g. something came up, work got busy, nice weather, etc.). I understand that trading is a part-time hobby for most. Life gets busy and trading sometimes falls to the back burner. As someone who worked 60+ weeks for three years to learn the craft, though, I also believe intermittent attention is no better a way to learn trading than jogging a couple miles here or there is an effective way to train for the Boston Marathon. To get good mileage out of this group, you should make it a priority.

With regard to most trading groups that collect [inactive] members, I don’t doubt these people liked the idea of learning to trade. People are drawn by the allure of generating trading profits, the allure of building a retirement nest egg, and perhaps even the allure of quitting their full-time job and being able to be their own boss. The industry paints a wonderful picture of all these things and suggests easy and straightforward ways of accomplishing these goals. I think the reality is different. You can learn to trade and you can take control of your own finances but it will require work and it will require commitment. Down the road, I believe a strong sense of achievement awaits for those who stick with it.

The Mixed-Up Files of SEMI Collective (Part 2)

I’ve been going through my “drafts” folder this year trying to finish partially-written blog posts and get more organized. This is another series of unfinished posts.

From October 2016, I have a post about the SEMI group concept. I also had four other incomplete drafts. I have cursorily looked over these drafts along with the actual post. The content is different.

This particular draft is from October 14, 2016, and has 20 revisions. I therefore worked quite a bit without ever getting it done! I resurrected Part 1 here. In the longshot case that someone out there could possibly benefit from any of this, here is what I believe to be Part 2.

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What can you expect to get out of this group?

If you are a beginner then you should get a solid financial foundation on which trading strategies can be built. I have a good idea about what gets taught in premium courses. My presentation material would overlap and this can serve as a good starting point. I say “starting point” because to be successful, I believe you must always do the work of tailoring any strategy to your own individual personality.

If you are advanced then you will have the opportunity to collaborate with others in developing trading strategies. I believe even advanced traders should work with others to keep heuristic thinking in check. Not only is collaboration very difficult to find, it is the ultimate goal of this group.

The overbearing ego resides in the know-it-all (KIA): a variant of trader I periodically encounter. The KIA claims to be advanced. He has an arrogance about him and speaks in certainties that imply some familiarity with the Holy Grail. He describes trades as “ATM machines” and occasionally brags about his profits. The KIA is often selling a trading system, a newsletter/advisory, or a premium website.

I need overbearing egos and KIAs to steer clear of this group. Collaboration requires us to leave egos at the door, maintain open minds, and attempt to look past biases and focus exclusively on the data. I reserve the right to ban any KIA who has leaked into the group.

The most important thing to me is that this group be actionable. Directly actionable may be a trading strategy that I can implement right now with reason why it is likely to profit. Indirectly actionable may involve pre-requisite concepts upon which an actionable idea is built. Topics that are not actionable include discussion about market or economic trends because the crystal ball for prognostication is broken. Also not actionable is discussion about corporate fundamentals and/or earnings in the absence of robust evidence to suggest significant correlation with predetermined market moves.

Finance is full of ideas that sound good on the surface and make great logical sense. Without supporting evidence, though, good ideas amount to little more than gambling.

Gambling, in my eyes, does not make good business sense.

The Mixed-Up Files of SEMI Collective (Part 1)

I’ve been going through my “drafts” folder this year trying to finish partially-written blog posts and get more organized. This is another series of unfinished posts.

From October 2016, I have a post about the SEMI group concept. I also have four other unfinished drafts. I have cursorily looked at these drafts along with the actual post. The content is different.

This particular draft is from October 11, 2016, and has 21 revisions. I therefore worked quite a bit without ever getting it done! In the longshot case that someone out there could possibly benefit from any of this, here is (I think) Part 1.

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Welcome to the SEMI Trading Collective. The ultimate goal for this group is to establish a critical mass of focused minds working together to develop effective trading strategies.

My name is Mark and I left Corporate America over eight years ago to start trading for a living. Since that time I have been able to cover the annual living expenses with trading profits alone. While a substantial amount of hard work does underlie this accomplishment, I am very grateful for the results to date.

Aside from my trading experience, I also am prepared to do some teaching to get beginners up to speed. Developing trading strategies will require a high level of sophistication. I am willing to teach passionate students. If a slew of advanced traders joins this group then my teaching may not be necessary.

As a means to establish accountability, participation in this group will require a monetary contribution. I believe most groups fail because people come and go with varying levels of commitment and no consistent work flow subsequently achieved. Nothing I can do can force you to attend, to study, or to learn. I can only charge a fee in an attempt to filter out people who are not serious. This may keep group membership down but we only need a few engaged individuals to form a productive and [hopefully] profitable group.

The costs for this group include $10/year membership and $10 per Meetup. This is a pittance compared to fees charged throughout the industry for “educational programs”—many of which simply aim to upsell more expensive seminars—or “investment services” that often fail to deliver on rosy promises. I believe anyone who finds this fee structure too steep is either not in an acceptable financial position to trade or not adequately committed to developing the craft.

Planning My Next Meetup [hopefully not MIS] Adventure (Part 8)

Further deliberation over the promotion for this Meetup still leaves me skeptical.

I could therefore try for something more to the point:

     In 2002, I got my Doctor of Pharmacy degree and began work as a retail pharmacist.
     
     For the last 11 years, though, I have been trading options full-time out of a home office. One
     thing I miss is my patients and co-workers, and I have had little success finding other
     advanced traders with whom to collaborate.

     Since I can’t find such traders on my own, perhaps I can help to create some. For those who
     have been interested in learning to trade and invest for yourselves, my challenge is your gain.

     Welcome to the Michigan [Index?] Option Trading Workgroup.

     The goal of this group is to present some basic option income strategies and to practice them
     repeatedly until we feel comfortable employing them in personal accounts (if so desired).

     I am happy to teach what I know. Beyond that, there’s still plenty for all of us to learn.

     I strongly encourage data science practitioners along with programmers and statisticians to
     look into this group. Beyond practicing individual trades, I have more advanced research
     planned that can really help to develop existing strategies for live trading. In exchange
     for expertise, this group can teach you the ins and outs of option trading and
     self-directed investing.

     Cost for this group will be $12/month, which should cover group expenses. In addition,
     you may choose to buy or lease third-party analytics software to study/track simulated
     positions. We will talk about ways to do this without purchasing software, however.

     Spots will be limited. You should be highly motivated and able to commit regular time to
     this group. Those with the technical expertise described above will be given priority
     [free] admission. With regular participation and diligent effort, I expect those who
     participate can become capable option traders within a relatively short period of time.

     Please answer the profile questions and send contact (phone or Skype) information
     when you join. Before we begin, I want to make sure the group is as good a fit for you
     as you can be for the group.

     Thanks, and good trading!

Planning My Next Meetup [hopefully not MIS] Adventure (Part 7)

Propelled by some serious writer’s inspiration, I want to take one more stab at this option trading Meetup proposal.

For 11+ years, I have traded options full-time for a living. I work independently and trade only my account without the help of a financial adviser.

Thanks for your interest, and as is often said in these circles, “good trading!”

Planning My Next Meetup [hopefully not MIS] Adventure (Part 5)

After further review, I like the Meetup proposal I wrote last time. One concern is that its intensity may scare people off. I discussed this in the paragraph following the first excerpt here as well as the third-to-last paragraph here.

Another possible approach is to lighten it up by leaving specifics for an initial orientation meeting. I would then be using the website to get people in the door for a detailed PowerPoint (?) presentation. I might also be able to do some screening at the orientation by going around the room and having people answer a couple questions about what stokes their interest, past experience (if any), and available time for group work.

I can imagine one potential downside being attendance only by people for whom time and place is convenient. I can try and offset this by crafting an alluring pitch to encourage sign up. I can also offer the orientation different times in varied locations. Since the bulk of our activities will be online (something to explain at the orientation but not on the website per paragraph #2 of Part 4), I don’t want geographic distance to rob me of potential group members.

Here’s a rough draft for a revised Meetup pitch:

A pharmacist by training, I have been trading options full-time for a living in my own account for the last 11 years. I have been happy with my overall results, but I aim to be better.

My vision for this is like no other trading group I have seen in 15 years. Since prediction is an endeavor that sees professionals fail time and time again, we will spend little time discussing events pertaining to world economies or debating stock selection. Instead, we will spend our time planning actionable trading strategy to prepare us for whatever the market throws our way.

The sentence in bold is debatable. I think it is honest. If I want to make this more enticing, then perhaps I leave it out. On the other hand, perhaps leaving it in will give people more confidence by preventing them from misinterpreting the group as being something it’s not.

Planning My Next Meetup [hopefully not MIS] Adventure (Part 4)

After some effort, Meetup finally admitted that my group idea does not fit their guidelines.

Nevertheless, their ambivalent tone (first sentence of this first excerpt) makes me think the opportunity exists to start a group with some caution. I want to avoid obvious red flags such as the phrase “online work group” (see sentences 3-4 of excerpt just linked). I will avoid charging a large upfront fee (see here), which might be viewed as a product sale. I will omit reference to a selective interview process and small number of members, which may suggest limited revenue for Meetup.

The time has come to compose a rough draft of what I have in mind:

The purpose of this group is to teach, to analyze data, and to develop option trading systems.

My vision for this is like no other trading group I have seen in 15 years. Since prediction is an endeavor that sees professionals fail time and time again, we will spend little time discussing events pertaining to world economies or debating stock selection. Instead, we will spend our time planning actionable trading strategy to prepare us for whatever the market throws our way.