One of my favorite posts right now (I’ve gone back and re-read it thrice) is Derek Hernquist‘s Resolving Timeframe Conflict from this past Friday. Derek is not consuming tweets and blogposts and articles and media for raw knowledge alone, he is pursuing actionable information in a sea of everything.
Derek has a method of compartmentalizing all of that intel and data from the firehose – he is sorting it by the timeframe in which it might be useful to him – which I think is brilliant.
There is a feast of information out there, might we benefit from looking at it temporally instead of topically?
From a trader’s standpoint, there is nothing quite so frustrating as being right but so wrong on the timeframe that a potential W becomes a Capital L. Think being short housing through 2006 -2007. Or how about being short gold right now because all the signs of a full-blown asset mania are developing? Every week the gold shorts are ground down to dust, even as their mania case grows stronger. Many traders who have lost money because of timing were simply not sorting their information properly.
In a market that has my long-term evidence overruled by short-term evidence, and vice versa, I’ve been thinking a lot about which information is most critical to my trading. It’s easy to misuse a great piece of evidence by applying it to the wrong timeframe, so when conflicted I like to review my sources and make sure I’m applying everything to its proper timeframe.
Derek is using a Past/Present/Future cipher that I may adapt for myself. Right now, I am sorting things I read and hear by topic like most of you are – macro, earnings, emerging markets, commodities, technology, the Fed, etc. This is an extension of the fact that I am a fundamentals guy by background and only a technicals/quant guy by preference.
I’m wondering if I will be able to change the way I process news without driving myself crazy. Can I start looking at information on the basis of the When as opposed to just the What? I’m not sure but I think I’m going to try.