Dear Reader,
As I write this, I feel a palpable sense of excitement about the year to come.
Forget the crystal ball, forget the pundits. The Nasdaq flushed 1000pts, and everyone’s scrambling to figure out if it’s a bear market sneak attack or just a fleeting correction before we’re back to those all too familiar all time highs. US Treasury yields, for the first time in history, have actually climbed 100bps, in response to 100bps of rate cuts. And, they have higher yet to climb.
That ain’t supposed to happen. The term “bond vigilantes” is even being bandied about - feels like 2010 all over again. But, while they’re busy reading the tea leaves, maybe the Gann-esque lunar cycle, we’re tuning into something different: the raw, unfiltered spooling of the tape. Nary a chart in sight.
An introduction to myself, I’m a former investment professional, CFA charterholder, who cut my teeth in Investment Consulting. Those are the guys the buy side love to hate, but can’t live without, as we were the gatekeepers to big institutional money. This was back in the day when it was normal to get lavish hospitality and gifts in an attempt to woo us into a 9 or 10 figure investment, which wouldn’t have made a difference either way. Sorry, if you’re going into finance today you’re probably not being taken out for truffled lobster and bottomless glasses anymore.
Wasn’t quite the lifestyle depicted in Michael Lewis’ Liars Poker - in reality, it’s dreary actuarial spreadsheet work 95% of the time. After a few years I checked out, moved overseas to blow off some steam, eventually coming back to the industry in various buy-side roles (less LDI work, thank the Lord). Spending my weekends trying to build a cocktail of derivatives to match the liabilities of a Defined Benefit pension Scheme was not on my childhood bucket list. I was always close to large transactions, but the work was never stimulating. I was more interested in the underlying dynamics of the market auction, or, more bluntly, putting the risk on myself.
In Economics, you can either be risk averse, neutral, or a lover. I tend towards the latter. To borrow a term from the dismal science, I get utility from taking risk. That’s why I’m drawn to trading, and finally made the leap to full time during the pandemic after placing my first trade some 30 years ago. Millwall Holdings was my first stock, back when dial up internet wasn’t even a thing. I was 9, the Broker encouraged me and told me one day I’d own the club (unfortunately, it wasn’t to pass).
This letter is going to be a bit different to your typical finance newsletter. It’s going to be very technical, and - here’s the kicker - I’m going to be attaching my results as audited by DarwinIA. Real money, real results.
I study the Depth of Market (aka, the price ladder) and Time & Sales (aka, the tape), and the dynamics of each in some detail. This is the only thing that informs my trading decisions intraday. There’s some market profile analysis, but it’s subordinate to the tape. There’s other folks who cover that, and cover it better than I ever could.
Each day I trade will have some form of detailed trade breakdown. Probably a Discord channel so we can communicate with speed. And, although my method has to be discretionary by it’s very nature, it’s systematized enough to actually be fairly simple to pick up. For this reason, my edge is behind a paywall, as it’s something I’ve been cultivating for years. My results tracker will give a fair gauge of whether I know what I’m talking about — real money trading performance over time is the one and only demonstrator of trader skill. Nothing else. If I crash and burn, you’ll see it in real time.
This letter will be for the intermediate to advanced trader looking to sharpen their edge in the market, and have a clear plan of action each day. If I can average you about 250 pts on the Nasdaq a week, with an average stop of 10-20 pts per trade, then I’ll consider it a job well done. Yesterday we batted off an easy 150pts from 21350 to 21500. Best of all, there was no guesswork involved. I had a sizable position on and felt zero stress, taking home about $50k on that trade.
What do I like to look at? Primarily, stacking & pulling, where and how bids and offers are being filled and their magnitude, the speed of the tape. Our levels are purely from market generated information on the day, and usually prior day too. I don’t get too much into speculation about where the market is headed long term.
So, why share it?
It helps to promote my DarwinIA tracker slowly over time. This potentially can attract investment, if I provide a quality service
I have an ambition to set up a prop shop and I need trusted collaborators. People who see the market the same way I do, and want to take this on as a serious career
This one is more personal, but, I want the second half of my life to be about doing good works in the community, and in the world. This is, honestly, my primary driver for trading profits. I’ve had my materialist phase and, it was no great shakes. I’m looking for like minded people to share in this mission.
I really want people who have the same aspirations listed above. If you live and breathe the tape I want you in the team.
What this isn’t going to be is specific stock ticker advice. It’s certainly not financial advice. Whilst I was a professional asset allocator, this isn’t what this letter is for. With that said, if I have some good global macro ideas, I will highlight them. I could talk about last year’s global macro wins but, it’s better if I show you.
We’re primarily going to be looking at Equity Indices and Fixed Income, namely NQ and UB (CME and CBOT, respectively). Intraday, where the typical duration of a trade could be 5 minutes to 5 hours. No scalping. This process is reliable, repeatable, and scalable. It will be highly technical, but, this is genuinely the easiest part to get to grips with. The hard part is, truly, the self mastery required, so we’ll be delving into this, too.
The paywall isn’t going up until the end of January (when my DarwinIA index is created), but, I am going to start documenting some trades in the meantime. This Substack is a companion piece to my X page @nqmarketprofile where I talk about my biases going into each session.
-Z
This is not financial advice. I am not currently an FCA registered advisor. This letter is purely for education.