The Ticker's Bible: Book One: In The Beginning

By David H. Zimmer

I'm just a young 68-year-old with 55+ years of hands-on experience in all facets of the investment markets; my Dad became a broker when I was 13-years old and the rest is "history". From emotional intelligence to macroeconomic, geoeconomic and geopolitical theory, from simply building algorithms to actually trading futures, equities, bonds, opti

• Language: English
• Publisher: The Ticker
• Release date: Dec 11, 2023
• ISBN: 9798868924859

David H. Zimmer

I'm just a young 68-year-old with 55+ years of hands-on experience in all facets of the investment markets; my Dad became a broker when I was 13-years old and the rest is "history". From emotional intelligence to macroeconomic, geoeconomic and geopolitical theory, from simply building algorithms to actually trading futures, equities, bonds, options and more, there's little in this industry I have not done and cannot teach. In this first in a series of five books, I'm interested in broadly and uniquely teaching you everything. I first want you to learn how to understand yourself, your emotions. "What's Between Your Ears", explains how to avoid negative while bolstering positive emotions making investing and trading much simpler and easier to understand.It's a big, big world out there and news travels quickly all day long. I complement emotional intelligence with a chapter on macroeconomic, geoeconomic and geopolitical theory presented exactly as I use it to invest and trade. Direct from the "horse's mouth" experience is always priceless. It moves you down the "learning curve" of investing and trading more quickly. In the following chapters, I discuss equities, bonds, futures, ETFs and options, concluding with "The Tools I Use & How I Use Them"; it's priceless. I take everything I've inserted into that "space between your ears" and put it all together in a working format. It's my true intention to help you become the "best damn investor or trader" you can be; the "right way".In addition I offer a free and "paid" newsletter on Substack, courses on Udemy, one-on-one online sessions and a regular LinkedIn presence. There's little I cannot teach. I believe there's a right way to learn how to invest and trade. I want to make you the "best damn investor or trader" you can possibly be. Remember, learning how to invest and trade is a marathon, not a sprint. Welcome to one of the most important journeys you'll ever take. If you have additional questions, just ask.

Book preview

Copyright © 2023 by David H. Zimmer

All rights reserved.

To my gorgeous Irish Catholic girl I wish

I’d met years ago, her kids and grandkids.

You make my world go around, thanks.

TABLE OF CONTENTS

CHAPTER 1: Trading Psychology

CHAPTER 2: Macroeconomics & Geopolitics

CHAPTER 3: Equities

CHAPTER 4: Bonds

CHAPTER 5: Commodity Futures & Indices

CHAPTER 6: ETFs & Mutual Funds

CHAPTER 7: Options

CHAPTER 8: The Tools I Use & How I Use Them

GLOSSARY

So, do you want to become the best damn investor or trader you can possibly be? Well, you have come to the right place. Let me introduce myself, my name is David Zimmer and I’m The Ticker. At the time of this publication in 2023, I’m a young 68-year-old with 55+ years of hands-on experience in all segments of the investment industry and markets; my Dad became a broker when I was 13; the rest is history.

There’s very little I have not been exposed to in the securities industry. From trading to hedging, investment management to regulatory enforcement, developing products by myself and with teams of others, to running my own broker / dealer, there’s little I have not done. From the E.F. Hutton glory days, to the trading pits at the Chicago Mercantile Exchange, being a market maker and more, I have been involved in just about every facet of the industry; I’ve loved every minute of it. Now it’s time for me to give back to you what I’ve learned and experienced, to teach you how to be the best damn investor or trader you can possibly be, the right way.

Learning how to then actually becoming the best damn investor or trader you can be takes time. The process is a marathon, not a sprint. I will be right there beside you as you transition to greatness. No question is unimportant and none will ever go unanswered. If you are like me, you try to learn something new every day. With that in mind let’s begin and thank you for giving me the opportunity to help you become the best investor or trader you can be.

So what is the right way? Most educators employ a brick-and-mortar approach. At The Ticker I agree to a degree but there’s a few bricks that form my foundation that stand out from others. Maybe it’s from 55+ years of experience or the plethora of advice I’ve received listening to others, but from my perspective, I believe what’s going on between your ears and what’s happening around the world are essential building blocks for success. With that in mind I’ll begin with Emotional Intelligence and follow it up with Macroeconomic & Geopolitical theory.

I’m interested in broadly and uniquely teaching you everything, not just how to read a technical chart or how to use your smart phone to place an order or two. I want you to first learn how to understand yourself, your emotions. Recognizing what’s between your ears, how to avoid negative while bolstering positive emotions makes investing and trading much simpler and easier to understand. It’s the most effective tool I’ll teach you how to use.

Second, it’s a big, big world out there and news travels quickly all day and night long. I’ll complement the emotional intelligence lead in with one on macroeconomic and geopolitical theory presented as I use it. Right from the horse’s mouth experience is absolutely priceless and will move you down the learning curve more quickly.

In following chapters, equities, bonds, futures, ETFs and options are discussed.. In the last chapter, I’ll take what I’ve tried my best to insert into the space between your ears and provide you with the actual tools I use and how I use them. That’s right; I’ll remove all the mysteries, there will be no secrets, no stones left unturned; that’s exactly how you’ll learn, the right way.

This is how I teach. It’s my intention to help you become the best damn investor or trader you can possibly be; again the right way. Now let’s get started.

CHAPTER 1

Trading Psychology

A great place to start the discussion of Emotional Intelligence EI would be to define it. What is Emotional Intelligence and why is it so important when it comes to trading and investing? EI provides you the ability to recognize, understand and manage your own emotions. Taken a step further, once you are capable of doing that for yourself, EI gives you that same ability to recognize, understand and manage someone else’s emotions. Now you’re interested, eh? It doesn’t stop there.

Emotional Intelligence helps you better navigate social interactions enabling you to make more sound professional and personal decisions. This space between your ears is where your intrinsic emotions reside. In this chapter you will learn what they are and how best to handle them. First let’s identify your good and bad emotions.

Understanding yourself, determining exactly what makes you tick often determines the difference between success and failure, especially when investing and trading. Understanding your own personal psychological barriers is priceless. Knowing how to deal with your weaknesses enables you to better understand why others make poor decisions as well. This pattern recognition will enhance your planning ability, whether in social interactions or just putting together an investment or trading plan. So take a little time, get to know yourself and what’s going on between your ears before you start investing and trading; you’ll be glad you did.

Part A: Emotional Intelligence

While there are several different components to EI, the five that follow encompass a majority of what’s most important:

Self-Awareness: Being aware of your emotions and exactly how they affect all facets of your behavior. It’s a great place to start; with yourself. The better you know who you are the better you’ll be able to handle everything else.

Self-Regulation: Being able to control and manage your own emotions. After identifying your strengths and more importantly your weaknesses, determining how best to regulate them is next on the agenda. It often takes time, patience and practice, just like most good things in life.

Motivation: Being driven to achieve your personal and in this specific case, your investment and trading goals. Goals need be set at realistic levels or no matter the actual level of motivation they will seldom be reached. If measured on a continuum, an achievement of your goals enables even higher heights to be reached over time.

Empathy: Being able to understand and respond to the emotions of others is by far the most important emotion anyone can achieve. It ties how you feel with how you express those feelings to others. Empathy is treating others in the exact same manner you want to be treated under identical circumstances.

Social Skills: Being able to build and maintain positive relationships. After you identify your own emotions reflect upon those exhibited by others. Being able to understand your own emotions enables you to observe and interact in a way where you better fit in, how you are accepted by and accept others.

Face it, we are all human and humans seek pleasure however we define it. In being human, you also cannot escape fear. It is fear that manifests itself differently across all of our individual psyches, especially in trading and investing. If you have a fear of losing money you might have difficulties as a trader or investor. Not every trade or investment is going to be a winner. As long as you can handle it, that’s OK. Take the time to identify the good and bad emotions existing between your ears, then deal with them. Let’s get started with the specifics; enjoy the adventure.

Part B: Negative Emotions

People are surprised when I begin with the negative emotions side of the equation but for me it makes the most sense. It’s harder to deal with and eventually change a trait that is detrimental to your success, especially when it involves risking capital. With that in mind let’s attack those demons before identifying the positive emotions most of you undoubtedly possess. The basic negative emotions are:

Boredom

Depression

Doubt

Fear

Anger

Anxiety

Greed

Boredom

Boredom is basically a disinterest or a lack of engagement with your surroundings. In some cases, it’s defined by words like restlessness, apathy or emptiness. Generally, it’s a lack of motivation, a monotony coupled with feelings of frustration or discontent. It’s often the result of a lack of stimulation, extreme repetition or a lack of meaning, a purpose or a challenge. Boredom often causes you to lose connection with others as well as with yourself. In short, boredom is not exactly the emotion you want front and center while investing or trading.

Investing or trading to avoid just being bored is ludicrous; it’s not worth the gamble. If boredom is the only reason you invest or trade do something, anything else. Watch a video, take a walk but in any case, step away from the screen.

Boredom is often associated with an ability to be patient. Investors and traders must be patient especially when initiating a position. Patience should be practiced daily, in every single facet of your life.

When it comes to investing or trading avoid the words feel, guess, hope, pray and at times even think. Rely upon the word know. Remember not having a position is a position and when bored it’s probably the best position to have. FOMO, the fear of missing out" is associated with boredom. There will always be another investment or trading opportunity; step away, be patient and just wait for it to appear.

Depression

Depression is boredom on steroids. In reality, it’s a serious mental health disorder requiring medical attention. Depression is associated with physical fatigue, appetite change, sleep disorders, difficulty concentrating and overall loss of interest. Investing or trading securities while being depressed is not suggested; it is not a cure.

Real treatment includes a combination of therapy and medication, to talk therapy, a form of cognitive behavioral therapy. Treating depression, identifying then changing negative thought patterns and behaviors, takes time. Coupled with yoga, meditation and exercise, antidepressant medications are proven effective. Nonetheless it’s best to step away from the screen until cleared to continue by your physician.

A good friend of my Dad’s, a fellow broker, had a significant problem battling PTSD accompanied with depression. His colleagues thought trading would take his mind off of his problems. My response was are you kidding me? He chose to take a little time off and address his burdens. My Dad monitored his accounts for the next two years while he healed. I visit with him every chance I get; just makes me feel good.

When returning to the office he started slow; one client at a time, one investment or trade per week. The capital put at risk was minimal. Stop losses or when profitable trailing stops were used. It took another year or so but eventually he won the battle. Real story, real circumstance, real outcome with a lesson learned by all; investing or trading is not a cure for depression; time and the attentiveness of friends and family works. Lesson learned, don’t invest or trade while suffering from depression.

Doubt

Doubt suggests a feeling of uncertainty, a lack of conviction about something. If and when doubt takes hold you question the truth, reality, validity of thoughts even ideas or the beliefs of a single statement. Doubt is a very normal human experience. When addressed correctly doubt can be beneficial as it leads to critical thinking with a dose of healthy skepticism. It becomes problematic when it prevents your decision-making process from taking any action whatsoever.

Doubt is a terrible emotional characteristic if allowed to fester. Faith is necessary to accomplish your goals. If you do not have any faith in yourself no one else ever will. In order to be a successful investor or trader faith in your method, strategy, system, plan, risk management and yourself is absolutely essential.

Doubt usually raises its ugly head when you are losing money or not doing as well as you were before. Take time to review your investment or trading plan ensuring you’re abiding by your own rules. Stop second guessing yourself, stay current with events around the world, stick with your beliefs and focus on what’s next. Faith will return; you’ll hone that edge you had before doubt arrived. Understanding your investment and trading psychology keeps you ahead of the curve; doubt will soon disappear.

Fear

Without a doubt, on the negative side of the equation, fear is my personal favorite. It offers everything you need, inherently embedded directly into your soul, to make you the best damn investor or trader you can be. Without fear where would we be?

Fear is an emotional response to a perceived threat or danger. It’s natural and is an adaptive response that protects one from harm. Fear prepares you to take defensive action or just run away, kind of a fight or flight mechanism, from what you perceive as a threat, the important operative being perceive. Let’s examine what fear is.

Textually, fear is broken down into several categories:

Acute Fear: Is a sudden and intense fear usually associated with immediate threats, like being on a wilderness trail and running into a bear.

Chronic Fear: Is a persistent fear, one with long-term, recurrent threats, like being forced into a workplace environment where you’re counting down hours until it’s time to go home.

Phobias: Are excessive, irrational fears of objects, situations or activities from flying to spiders, from dinner with the in-laws to crossing a busy street. It is all in your head just like everything else is.

Post-Traumatic Stress Disorder PTSD: Is a higher level of chronic fear that develops after experiencing or witnessing a traumatic event quite often associated with a war related incident but is becoming more associated with early childhood interactions as well.

When you experience fear the body reacts. Some of these symptoms of fear include:

Rapid Heartbeat

Sweating

Shaking & Trembling

Dizziness & Lightheadedness

Shortness of Breath

Nausea

Increased Muscle Tension

Fear is a two-pronged emotion and exhibits a negative as well as a positive side. In investing and trading, fear arises when you’re on the losing side of the equation from a small loss, a significant drawdown even complete financial ruin. The fear I address most often is FOMO, the fear of missing out, or the fear of exiting too soon’ and missing the big one". If you are hooked on TikTok or another social media site, turn them off; if they were making so much money they would not have time to post.

The Fear of Missing Out is the main cause of fear in the investing and trading world and one I directly address. No one needs to be involved in every move; not having a position is a position. So you missed the last one, relax, there will be plenty more. Exiting too soon is as bad but at least you’re profitable. Remember the adage, you’ll never go broke taking a profit. Practice both of these scenarios and your perception of fear will quickly dissipate. Experiencing and understanding fear can actually be a good thing once you’re able to identify its cause then learn how to deal with it.

Anger

Anger, like fear, is a normal emotion exhibiting a much broader reaction range from milder irritation to a full-blown intense range. It’s an emotional response to perceived threats, injustices or just plain frustration. You might feel your heart racing, tensed up muscles or an increase in your blood pressure. Verbal and behavioral expressions of yelling, throwing things and even physical aggressiveness accompany your anger.

Anger arises from personal experience, social conditioning and various other factors outside of your control. Blaming or resenting others coupled with a feeling of injustice triggers anger like your perception of being disrespected, threatened or mistreated.

Nested in perceived doubts or fears, anger sometimes just confirms the fact that you have lost too much money. Learn from your mistakes; review your plan, change your risk management and reward methodology, your investing or trading philosophy and more. Anger indicates it’s time to step back and reestablish your edge. Never trade in anger; like revenge it does not work, it will only make it worse.

Anxiety

Anxiety is a normal, healthy emotion encompassing the feeling of nervousness, the worry or unease about an uncertain outcome. Anxiety can become overwhelming in some cases even debilitating especially if it occurs frequently. Medically speaking, it manifests itself in many ways similar to fear:

General Anxiety Disorder GAD: Is characterized by excessive and even unrealistic worry about everyday events and activities.

Panic Disorder: Sudden, unexpected panic attacks with physical symptoms like heart palpitations, sweating and trembling.

Social Anxiety Disorder SAD: Characterized by an intense fear of social situations and being judged or evaluated by others.

Specific Phobias: Characterized by intense fear of specific objects, situations or activities.

Post-Traumatic Stress Disorder PTSD: An intense fear, symptoms after experiencing, witnessing a traumatic event.

It takes time to recover from a bad investment or trading decision; that’s only natural. That dose of reality is often followed by a bout of anxiety. It’s unrealistic not to have feelings of anxiety every now and then but there’s a solution. Get back in that saddle and ride that horse again. Do your best to minimize recurring stressors and develop a time-tested, solid-as-a-rock investing or trading plan. When it comes to anxiety, in the investment or trading world, anxiety usually appears when you are losing money and disappears when you’re winning. Simple, eh?

Greed

Ask any billionaire and they’ll tell you that greed is not a negative emotion. Perhaps not to them but to the other 99.99% of us greed manifests itself in ways that destroy your well-being.

Greed is an intense, selfish desire for more wealth, power or possessions that any one person needs. Quite often this excessive desire for additional material wealth or gain drives unethical, illegal behaviors in its pursuit, leading to financial ruin, social isolation even legal problems. It’s accompanied by a lack of empathy, compassion and the complete disregard for the well-being of others. In short, it’s better to spend your time developing healthier personal values. Here’s a couple types of greed:

Financial Greed: A strong desire for money and material possession through hoarding, overspending or taking advantage of others.

Power Greed: A strong desire for power and control often characterized, then obtained by manipulating and exploiting, lacking empathy and compassion.

Possessive Greed: A very strong desire to acquire and keep all possessions while simultaneously being unwilling to share anything with others.

Confidence is a good thing but too much often leads to greed. Lessons to be learned encompass investing or trading only what you are comfortable losing. The economic markets are schizophrenic; no one knows what the next direction is. Risk / reward is an ever-present element that must be controlled. Avoid this emotional roller coaster; it will bring out the worst negative emotions inside of you. Experience is the greatest teacher; learn from your past and remember greed kills. It is best to realize you are human. Invincibility traits are best left for superheroes. Most successful investors and traders are happiest just being human.

Part C: Positive Emotions

Congratulations, you just survived the identification of the negative emotions inherent in everyone and you’re still here, great. No two people are alike but studies illustrate the following emotions are more often embedded in successful investors and traders. Like you’ll want to minimize the effects of negative emotions you’ll want to strengthen the effects of the positive ones. The most common positive emotions are:

Commitment

Introspection

Realistic

Self-Control & Heightened Awareness

Patience

Adaptable

Responsible

Creative Thinking

Self-Confidence

Commitment

The best, simplest way to define commitment, especially in the investing and trading world, lies in motivation; being dedicated, devoted to achieving a goal, a relationship or a belief. It’s the actual act of binding yourself to an established course of action. It is exhibited by your willingness to invest time, energy and whatever other resources are necessary to achieve a particular outcome. There are different commitments out there, but a few are more prevalent than others like:

Professional Commitment: A dedication to one’s work and career, it’s often characterized by a strong work ethic, reliability and a willingness to invest time and energy into your professional development.

Relationship Commitment: A dedication to a romantic, personal relationship, characterized by loyalty, trust and a willingness to invest time and energy into the relationship.

Personal Commitment: A dedication to your goals and values, characterized by self-discipline, perseverance together with a solid willingness to invest time and energy into your personal growth and development.

Hopefully, commitment is high on your list. It is absolutely essential when it comes to the investing and trading arena. Commitment gives you direction, a succinct purpose for your actions. It keeps you focused and motivated to achieve any goal you set. It’ll enable you to build stronger relationship; being committed, as perceived by others, is very highly respected.

When related to investing and trading, commitment is perceived as being dedicated to success on steroids. You’re focused on what is important, avoiding distractions as if you had blinders on. When you invest or trade concentrate only on what you are doing especially when markets are open. Everything else must take a second place. That in a nutshell defines commitment; it will keep you from being committed.

Introspection

In essence, introspection is what you are currently working on when it comes to the examination and identification of your negative and positive emotions. I hope you will make introspection a daily activity. There’s nothing better than taking the time to look inward and examine your own thoughts, feelings and experiences. Doing so is truly a tried-and-true methodology of self-reflection and self-examination. It enables you to gain insights into your own mental and emotional processes. Chances are, you will not always like what you see but keep in mind everyone can be better. While several exist, a few of the keywords that standout when describing introspection are:

Reflection: Reflecting on past experiences and memories

Analysis: Analyzing thoughts and emotions in the present moment

Examination: Examining one’s values, beliefs and motivations

Exploring: Exploring one’s inner self to understand one’s identity

People use journaling, meditation, self-reflection and even therapy to gain a greater awareness and understanding of who they are. Personal growth, improving a trait or dealing with an emotion, understanding what makes you tick is the goal. Identify negative thought patterns, emotions and behaviors and you will improve not just your investing and trading skills, you’ll begin relating to relationships of different kinds in a new light. You want to become a better decision-maker and bolster your well-being, right? It’s well worth the time to dig deep into yourself. Now take the time to do it right now; I’ll wait.

Self-Control & Heightened Awareness

Self-control is the ability to regulate your own thoughts, emotions and behaviors that help enable you to achieve a desired outcome or goal. Being in control of yourself permits you to resist impulses, delay gratification and make conscious, well thought out and deliberate decisions. In other words, it helps you to think more clearly.

Heightened awareness is ‘mindfulness’; paying attention to your thoughts, feelings and sensations in the present moment. You just observe without judging, reactively being part of your current surroundings in a way where you just exist. Take it all in; the better you achieve heightened awareness, the easier you’ll exist in your world.

Self-control and heightened awareness are developed through meditation, yoga and mindfulness training. You’ll become more aware of your own thoughts, emotions and overall sensations that will help you regulate your environment. You’ll better manage stress and improve relationships while building resilience, emotional intelligence and overall well-being. It takes a lot of time and effort but it’s well worth it; give it a try.

Realistic

Being realistic means being objective and unbiased. Being realistic reflects having a clear, accurate understanding of a given situation, problem or goal. Everyone has set expectations. Facts, constraints and challenges affect an outcome. Major differences between what one wants to happen versus what’s likely to happen, expectations define reality.

A good investor or trader adjusts prior expectations and goals to ‘new information and challenges. Making informed decisions, managing expectations and establishing realistic goals prevents disappointment and frustration. Focus on what’s possible" in achieving your objectives and goals. You will reduce stress and improve your overall well-being. Success will undoubtedly follow.

Going to the moon or heading to zero seldom happens. These glory, gloom and doom stories are few and far between; they’re just not realistic. Bears make money and bulls make money; pigs get slaughtered. If your investing and trading philosophy isn’t realistic spend more time in a casino; at least there you can drink for free.

Patience

I’m a position trader; I’m also perhaps one of the most patient persons, in every facet of my life, that you will ever meet; it works in the investing and trading arena. Being patient means having the ability to wait for, even delay gratification. Most people who are patient seldom become frustrated or agitated and they don’t throw in the towel or become angry. Patient people tolerate frustration, delay and uncertainty; they are all aware that patience enhances their performance. It’s better to wait than be wrong.

Patience signifies that whether investing or trading you have the ability to persist in the face of obstacles and setbacks. You become more resilient and persistent if you are patient as well as being more understanding and accepting of others. You will be better able to manage your emotions and act, versus reacting to difficult situations.

Instant gratification is rarely achieved. With respect to investing and trading, do not chase market movements. Defeat the fear of missing out knowing there will always be another opportunity. Not having a position is a position and you’ll never go broke taking a profit.

Adaptable

Being able to navigate in an ever-changing, uncertain environment, being resilient and recovering quickly from setbacks and failure means you are adaptable. That is a good thing. It does not mean being indecisive or too easily swayed. It means you are flexible, adjustable when circumstances change. Being open to all new perspectives, ideas and ways of doing things are critical to all types of investors and traders.

When it comes, more so to trading than investing, being able to adapt seamlessly, on a dime in some instances, makes you a better trader. Understanding the totality of the conditions affecting your current decision-making is necessary. Being aware of the schizophrenic environment, adapting to market reactions to all macroeconomic events, expected or out-of-nowhere, are important qualities for you to possess. You have two ears and one mouth; try to listen twice as much as you speak. That makes you adaptable in most any situation. As Dad always said, better to keep mouth shut and let it be thought a fool than open mouth and remove all doubt.

Responsible

Responsibility means you are accountable for taking your own actions and decisions. Taking ownership of ensuing consequences, good or bad, reflects being responsible. If you are