New blog!
Pyramiding.
An in-depth guide and strategy from a market wizard.
The #1 topic I get asked about, and one of the most mischaracterized approaches in trading.
The full approach: entry sequences, dynamic EV, sizing, exits, and the math behind it all.
It took me a while to finish but we got it done.
I look froward to all the comments and the discussions!
https://t.co/MuBOPuRE7e
To my right is Kelvin Chiu โ the first Hong Kong trader to be featured in the Market Wizards series.
I had the pleasure of meeting him in Singapore today and having lunch together. (Photo posted with Kelvinโs permission. He also knows that I use the J Law avatar on social media.)
If youโve read the newly released Market Wizards: The Next Generation, youโll know that Kelvin grew up in Hong Kong, graduated from Cambridge, and went on to work at Goldman Sachs and Vitol, one of the worldโs largest energy trading firms. During his proprietary trading years at Vitol, his best year generated $35 million in profits.
After leaving Vitol and trading his own capital, he compounded at 108.7% annually for 7 consecutive years, with a Sharpe Ratio of 2.0. Today, he focuses on his own family office.
So when you sit down with a trader like this, naturally I was ready to pull out my notebook and ask him everything I could about trading and asset management.
Instead, our conversation started withโฆ our kidsโ education. ๐
Long story short, here are some of the biggest takeaways I got from both his interview in the book and our lunch conversation today:
@KC_SilverCape@Clement_Ang17
โGratitude is a key ingredient of success. When you are trading the markets, you have to have a separate source of happiness---to know that there are still wonderful things all around, most of which do not require money. It is easier to take risks when you remove your personal happiness and well-being from the equation. Gratitude leads to optimism, and a positive attitude is 90% of the game.โ - @LindaRaschke
Stanley Druckenmiller: โA lot of my style is you [first] build a thesis, hopefully that no one else has built. You sort of put some positions onโฆ
Then when the thesis starts to evolve and people get on & you see the momentum start to change in your favor, then you really go for it. You pile into the trade.โ
My old floor trading friend once said about option market makers (and he was one!) "Those bastards never take their foot off the bag..." ๐คช๐ ๐๐๐
โKnowledge can be communicated, but not wisdom. One can find it, live it, be fortified by it, do wonders through it, but one cannot communicate and teach it.โ
โ Hermann Hesse