• MexShark

Focus On The Right Target

Updated: Jul 31, 2019

Abstract I spent three years on tradingview, trollbox and many other quant communities like quantopian and realize that the strong will always focus on the most critical things. But this is not enough to achieve what is impossible. The impossible achievement only belongs to those who focus on the right thing.

I. Observation

During all these years dealing with both eastern and western guys, I found something extremely identical to each other despite the cultural differences.

a. Composition

During the last two years, I saw how the trollbox talking nonsense every day, especially in the Chinese trollbox. Most of the topics are non-trading related and almost 60% of these words are about politics, which they don't really understand, but they still want to spill their opinion all day long. And almost 20% are hate speech. And the rest 15% is almost all about entertainment. As for the real technical analysis, there will be no more than 5%. And this composition somehow coincidently matched two statistics. The first one is from UC, Berkeley's recent society research:

Almost 60% of the topics on the twitter sphere are about politics, etc.

The second one is the wealth distribution of BTC:

The majority 95.89% of the addresses own less than 3.47% of BTC, as much as how many people willing to talk about the real technical analysis in the trollbox.

b. False information and hate speech

Green: False info Red: True info

There is no doubt that the trollbox fit this pattern, which the false information spread much faster than the true information, hate speech spread much faster than the encouraging speech. As for the hate speech, it occurs more in the chinese trollbox than the english trollbox. From these patterns I can tell two things: most people using media to vent their negative emotion. And most of the false information and hate speech can satisfy their purpose. The next observation is that most of the chinese dudes in the crypto world are not making money or suffering extremely high pressure in the reality because they have a much higher frequency of spreading hate speech. Besides, the Taiwan people can be more extreme compare to the mainland people altought both of them are chinese. Ps: the most successful chinese business man are neither building their wealth on trading crypto nor the stock market, and since the crypto are not being encouraged in China, the group of chinese traders in the crypto world can be referred as marginal group. And most of them hate technical analysis while they view trading as a way to gamble. This is a little bit different to the western world since most of the western traders experienced years developed financial system with several booming and huge crashes in the stock market in the past decades, and most of them have a little better understanding of what trading is all about.

c. Distraction

Despite the false information and hate speech around the public channel, most of the traders are very easy to be influenced by some "interesting topics" like sex, wars and political events, etc. How much will these topics and knowledge benefit their trading? The answer is zero.

II. Exception

Since the atmosphere seems so discouraging, I have to mention that there are a group of people still thinking about the big picture, aiming at improving the community. To protect their privacy, I won't list their names in this article. However, I open this special section to express my admiration and appreciation to them. Good job, my heroes. To be specific, they have the most beautiful soul and the golden heart. They will always have my highest respect.

III. Focus

In order to focus on the right thing, we should figure out what is "focus". According to the Cambridge dictionary, it means that "to give a lot of attention, time, energy, etc. to one particular group of customers or a particular activity. " In the trading, we can interpret as giving a lot of attention, time, energy, etc. on the technical analysis. Well, this standard already eliminated 90% of the traders since they are so lazy and distracted. But this is not the whole secret to be a champion or legend. Many students in China works much harder than the US's student, but in the end, the greatest creation still existed in US first for years; many athletes are working as hard as the top athletes but only a few have the chance to reach the summit. We can't simply judge them lost in the competition because they are lazy or lose their passion. And the comparison of chinese students and american students can deny the influence of talent in this article.

IV. The right target

The real cause of a legend can not become a legend is that they focus on the wrong target. For example, anyone who've programmed for years will notice that when they are learning something new, it is very important to find the right materials that can help them understand something just enough and accurately. Take the TCP/UDP for an example, anyone who tries to program the web application must understand the web socket and how information spread in two different protocols, TCP/UDP. Without the right target, someone may waste months digging into the protocols' details. But what they need to understand is that TCP needs a confirmation of the passing information already being accepted and verify it. UDP will not verify the information. Hence, TCP is safer and slower, UDP is insecure and faster. The next thing they need to do is figuring out how to deploy TCP or UDP in their web application with only one parameter. The hardest thing for a person to become a legend is that they need to focus on what's the right thing before they are focusing on that thing.

a. Plebs' noises

I believe that many people have their circle, like facebook, ins, tradingview, etc. And as a way to gather information or understand the outside world, they are needed. But they are also the main cause of the distraction. Here are some strategies on how to avoid wasting time in there.

First, don't ever try to prove yourself by talking to them, especially those haters or who spoke nonsense. They want to comment on everything, from politics to local legends, sex, etc. But most of their thoughts are irrational. However, they will still come after you if you are dedicated traders and occasionally released one or two opinions on the public chatroom. When amateurs like them spill their opinions on a dedicated trader, the first reaction is to try to provide evidence that can support his opinion. That is the start of a good conversation. But those amateurs won't understand it for most of the time, and they will attack everything with poor logic and nonsense. Then it's very easy to get involved with people like them and waste a lot of time. Plebs' noises

Second, if you really want to prove yourselves, prove yourselves by focusing on developing a new strategy and profiting.

Third, deleted those distracting people's contact.

b. The one minute 21 ema noise

There are a group of people living as a 21 ema, when the micro trend goes up, they yell up, goes down, they yell down. This kind of people in trading are as much as a one minute chart's 21 ema, except they are lagging and not smart. The words or thoughts they have are pale and useless. But somehow 99% of the people spread this information everywhere every day. Stay away from them will help you focus on what you are doing.

c. Focus on what you want to achieve

If you want to be a great trader, then focus on trading! Nothing else matters. I have a personal experience want to share with you. Last year I predicted the 3.2k bottom and posted it everywhere, while most of the people were still bearish. Then a lot of fans came out and follow my tradingview or say hello on the trollbox to me. But I know those famed are useless to me. So I don't even give any attitude to it. Then some big boys heard my name and gave me a lot of BTC to trade for them. I rejected them. All of them. The reason is simple, I know, my target is to be a great trader. Famed and money has nothing to do with that. The reason why I said this is because if you are focusing on one thing, you will achieve something eventually, then the famed and money will come. Then it's time to ask yourselves is that what you want? If not, don't give any attitude to that trash and focus on what you want to achieve.

d. Keep your team as small as possible

According to Nature's research, a new analysis of more than 65 million papers, patents and software projects found that smaller teams produce much more disruptive and innovative research. In other words, the smaller teams are more innovative. As the picture shown below, the most influenced innovations are created by small teams with only one or two members.

And another fact of the current innovations also proves this. The artificial intelligence stopped moving forward until Geoffrey Hinton, Yann Lecun and Yoshua Bengio (we called them the godfather of 'AI') cracked the codes of the sub-level of AI's programming, started the Era of deep learning for speech recognition, auto-driving and graphics recognition, etc; Google's name is building on a two engineers' crawler engine; and the 5G technology didn't exist until one mathematician cracked the polar code, etc. So it's ok to fighting along when you can't find another innovative person to be a partner. And it's also ok to have a 5 people small team to fight with a big company like 2sigma.

Hence, a small team is all we need to perform innovation in innovation. The benefit of helping us focus on our target is tremendous since the direction is highly unified.

To be continued...