A Simple Way To Simplify

This past weekend I had the opportunity to attend the TSAA annual conference in San Francisco. TSAA, for those not familiar with it, is a technical analysis organization founded around 1970. One of TSAA’s founding members, the late Hank Pruden, was a professor at Golden Gate University and a remarkable teacher of technical analysis out on the west coast. It was a unique experience to attend the conference since Hank’s passing in 2018, and see the conference is still thriving and watching Hank’s legacy live on.   

One of the great speakers at the conference was Dave Landry (visit DaveLandry.com). He does an incredible job of simplifying the idea of trading. He examines the simplifying of tools such as stop losses, triggers, etc., and also simplifying the decision-making process in general (I.E. getting out of your own way and head, and trying to come up with simple ways where you should be at in a decision). 

One of his main ways of accomplishing the simplifying process is by utilizing a series of three arrows:

  • Up & to the right = Uptrend

  • Down & to the right = Downtrend

  • Sideways = Sideways

This simple message he has printed everywhere. It was printed in his power-point presentations, on cocktail napkins, books, leaflets… everywhere. His presentation was largely focused on simplifying. Instead of focusing on and dissecting each detail to determine what is happening, simply look at the chart. Is it going: up, down, or sideways?

This theme really hit home with me especially. During my time at Fidelity we used a similar process to this using a whiteboard in the chartroom. One arrow going up that said ‘good’. One arrow going down that said ‘bad’, and an arrow that went sideways that said ‘frustrating’. From that point we would go through the markets and decide ‘why’ they were in each category. It seems simple right? Exactly. So why did we sometimes make it more complicated than what it needed to be?

Upon returning to my regular routine after the conference I found myself looking for ways I could simplify and streamline my processes. What I discovered is that when I look at the projects I want to accomplish, I found myself focusing so much on each individual detail and step in between each piece of the project and not on the end result. Instead, I now decide where that ‘arrow’ should be headed, which allows me to see a direction towards the end result and then piece together the steps to get there.

My challenge for you is to look at what you can do in your own investment and decision-making process and simplify it. What is one process or series of steps that you make more complicated than it needs to truly be? Is there a way to automate what the result is, or a way to take a step back instead of getting caught up in the weeds of all of the analytical steps? Look at it from a fresh perspective and decide: is this going up, down, or sideways. My hope is that by applying this simple paradigm, it will help you to simplify even one piece of your own process.