Pullbacks are a great way to trade. But, with any trade, the problem is that some trades work and some don’t. There are ways to tell which pullbacks are more likely to lead to winning trades, and one of the best ways is to put the setup in context. This can sound mysterious, but it’s really not. The goal of any pullback trader is to catch the second move. In other words, you wait for the market to make a move, and then you look for continuation in the direction of that move. One of the key things we assess is the character of the pullback—its magnitude, velocity, and overall character—but the ..read more

Good tools can help us sort through the mass of market data each day to focus on what matters. Of course, there are many things we might want to filter for, and that’s one of the first questions to consider. For my work, one important category of markets are those that have made big moves. Filtering out only those “big moves” is a good first step. But what is a big move? We must define everything we do with precision, and the results we get will say as much about our tool as about the market. Sigma spikes For many years, I’ve used a tool I call Sigma Spikes. This tool converts each day’s (bar ..read more

This is a follow-up to this post, where I discussed a bit about my journey that started with music, took me far away, and brought me back. As I’ve composed new music in recent years, I’ve repeatedly encountered requests from people who weren’t sure how to think about this kind of music, and who weren’t sure they were listening to it correctly. (Spoiler alert: you can’t do it wrong! “Listening incorrectly” is not a real thing!!) I thought it might be helpful to share some general thoughts about music and music composition in today’s world. Changing landscape One thing we have to acknowledge upf ..read more

This is a follow-up to this post in which I laid out the conceptual background that supports my trading. In today’s post, I’ll get into specific ideas and structures I look for when trading. Charts Charts are my primary tool for trading. I use both candlestick charts and bar charts. The main advantage of candlestick charts is that they tell a story at a glance. The main disadvantage is that it’s easy to read too much into that story. While I want to keep this post practical, there is a theoretical piece that is absolutely critical to the way I see the market. A chart can be thought of as a ran ..read more

Word Count: 1506 Estimated Reading Time: 7-8 minutes While I’ve written extensively on trading approaches and market movements, I still get many questions like, “How do you trade?” and “What tools do you use?” In this post, I’ll share the frame work that makes it all work for me. In the next post, I’ll share tools that have been most useful for me, over a trading career that has spanned three decades. This will be a high-level summary since each section could probably become a book on its own! Discretionary vs Systematic I have focused heavily on discretionary trading over the years, for the s ..read more

Estimated time to read: < 5 minutes As many of you know, in addition to my work as a trader in financial markets, I’m also a classically-trained musician. Recently, I’ve shared some of my musical compositions in a few forums, and I’ve had several people say things like, “I am interested in your music and classical music, but I don’t know how to listen to it. I don’t get it. It seems very complicated.” If you’re one of the people who said that to me, thank you! Coming from pretty deep within the tradition, it was a wake-up call to hear this sentiment echoed by many people. Rather than diggin ..read more

We are a little behind on these write-ups, but I want to share an outline and playback from Hudson Session 5, which was held on 24 June 2023. The Hudson Sessions are a series of in-depth talks, each on a chapter of my first book, The Art & Science of Technical Analysis. The goal of these sessions is to really go into the details of each chapter, but also to update you on how my thinking has changed and evolved in the decade since I wrote the book. I also share some of the interesting things I’ve read and explored recently, and this particular session opened with some thoughts about percept ..read more

Here are a few quick lessons drawn from today’s (Monday 10/9/23) action in the S&P 500 futures. Of course, we could draw many lessons any time we look at a section of market data, but when we choose something to focus on, we’re undoubtedly missing other aspects. Today, I want to focus on two aspects: pinpointing when the tone of the day became clear and examining some specifics of action around breakout points. Overall direction Markets have been under pressure for many weeks. Bears have been in control, and we’ve seen several great shorts in indexes. However, last week ended with some sig ..read more

Today, I want to share a trade in the S&P futures market. Here’s what I hope you’ll get from this short blog post: A deeper understanding of the snap pullback A real-world example of that trade, with thoughts on setup, entry, and trade management Some thoughts about trade selection Snap pullback I’ve written extensively about this trade, which is my re-naming of the Anti trade. (See The Art and Science of Technical Analysis for solid background information on the trade.) Here is a good discussion of the specifics of the trade, with some thoughts on why I chose to rename it, drawn from my ..read more

Just recently, we held the second installment of the Hudson Sessions — a series of talks dissecting the concepts presented in my first book, The Art and Science of Technical Analysis. If you missed it, fear not – you can catch up with the playback or access the slide deck to digest the talk at your own pace. In this session: We built upon our first session’s exploration of offset charts, diving deep into the complex patterns of accumulation and distribution. Importantly, we derived valuable insights about the realistic expectations from these patterns. One segment that might have challenged m ..read more