9/19/25 - Successful traders fail more because of stagnation than because they blow up.  They focus so much on "plan your trade and trade your plan" that they never create new, more promising plans to trade.  What creates a lasting business is thinking outside the box, observing different market relationships, and finding fresh sources of edge.  The excitement of discovery and the reward of doing new things keeps us actively engaged.  Drawdowns of P/L don't have to become emotional drawdowns if we're always exploring, always discovering.

The source of edge I'm currently working on is flat, "choppy" market conditions.  How do we make money when the market trades in a relatively narrow range?  One measure I've found helpful is what I call the momentum curve:  the percentage of stocks in the SPX that trade above their various moving averages, from 3 day to 200 day.  (I find the Market Charts and Barchart sites useful sources for this information).  This tells us when flat markets are occurring in uptrends or downtrends on higher timeframes.

A unique idea that came to me is that we can create momentum curves for each sector within the SPX universe.  Thus we look at the percentage of stocks above the different moving averages within the technology, consumer discretionary, utilities, communications, and other sectors.  What we can clearly see is that "choppy" index markets are hiding sector rotation.  During the choppy period, funds are flowing out of some sectors and into others.  Choppy markets are actually rotational markets.

It turns out that opens a variety of sources of edge. 

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9/18/25 - It is a challenge to make ourselves, and it's doubly challenging to unlearn what we've absorbed and remake ourselves.  When we fear to lose, we've lost opportunity and that is the great loss of all.  

Successful traders fail because they cannot let go of what has worked in the past to discover and develop fresh opportunity going forward.  All edges in markets have expiration dates.  Eventually they are discovered, exploited, and lose their unique value.  The successful trader is not one with an edge, but one who has developed the ability to cultivate new and different edges.

But that takes the ability to embrace uncertainty as well as the passion for learning new things.  Trading is not a journey to a destination.  It is a continuous process of evolution.  If we don't love change, change surely will leave us behind.  In developing the new, we renew ourselves.  

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