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Inside the Trader’s Mind: Macro Views, Risk Management, and Strategy – Insights Inspired by Edward Shek and ITPM
- The Institute Trader
- Jul 14
- 6 min read
Introduction
Hello winners! Who’s in the house?
I want to share some insights I’ve picked up from Edward Shek over time and try to convey the same practical message to anyone following the Institute of Trading and Portfolio Management (ITPM), or anyone who takes trading seriously.
This post isn’t about hyping predictions or calling the next big move. It’s about sharing a risk-aware, realistic mindset that can make all the difference between being a gambler and a professional trader.
We’re going to break down some core trading ideas, including:
✅ Why risk management beats bold forecasts
✅ How to handle macro uncertainty without getting paralyzed
✅ Building a trading book with conviction and flexibility
✅ Preparing for earnings season like a pro
If you’re studying with ITPM, thinking about it, or just want to up your game, these insights are for you.
Why Macro Matters (But Only So Much)
One of the biggest takeaways I’ve had from Edward Shek’s teaching is the importance of understanding macro without getting lost in it.
Markets are messy, noisy, and often contradictory:
Inflation might look tame in the data, but tariffs haven’t fully shown up yet.
Jobs numbers headline strong, but where is the growth? Local government and healthcare—not the industrial base.
Valuations are historically high, especially in AI-driven tech.
Tariffs remain the big unknown. If US–China tariffs hit 40–50%, recession risk grows.
AI promises margin expansion but also comes with looming job cuts.
What’s the real message here?
“It’s okay not to have a strong view on the macro.”
That might sound counterintuitive. Isn’t being a trader about making calls?
Actually, it’s about managing risk when you don’t know.
Shek’s approach (which I try to emulate) is to think deeply about the macro picture—acknowledge the uncertainty—and plan for multiple outcomes.
Embracing Uncertainty: Planning for Both Good and Bad
Instead of predicting every twist and turn, the better approach is:
Define your bias.
Recognize when it’s strong versus when it’s weak.
Have a clear plan for what to do if you’re wrong.
For example, consider the big questions on tariffs.
Will they slam the consumer?
Crush corporate margins?
Or will companies adapt quickly?
No one knows with certainty.
So instead of making one all-in bet, you can structure your trading book to account for both possibilities.
✅ Build hedges.
✅ Balance exposures.
✅ Be ready to adjust.
Building a Trading Book with Intent
One thing Shek’s approach really emphasizes is being intentional about your positions.
Not just: “I think this will go up.”
But: “I know why I'm long this sector. And I know what might make me wrong.”
For example, his own trading bias at one point looked like this:
Long hardware – because it's in favor and benefitting from AI-driven investment.
Short software – as a relative hedge if tech sells off.
Overweight industrials – betting on rotation if the economy remains solid.
But here’s the kicker:
“When you have a big bias, you have to know how you’re going to trade it if it goes wrong.”
That means:
Being willing to sell winners to manage risk.
Cutting losers instead of hoping.
Adjusting size and hedges as new data comes in.
Managing Dead Money
One of my favorite takeaways is the focus on avoiding “dead” positions.
A dead position is:
❌ Not moving.
❌ Not serving a hedging purpose
.❌ Tying up capital with no plan.
Instead, Shek’s approach is to constantly “keep the book alive.”
Examples:
✅ Take partial profits on rips.
✅ Hedge sector exposure (e.g., Caterpillar as a hedge against hardware longs).
✅ Cut or repair underperformers.
It’s an active, engaged style.
Risk Planning in Advance
Perhaps the most important insight is pre-planning for losses.
Most traders get wrecked because they wait until the P&L is red to decide what to do.
Instead, model the worst-case scenario before it happens:
How much will you lose if it all goes against you?
Will you cut, repair, hedge?
Are you okay with that loss?
If the answer is no—adjust now, not later.
The Earnings Season Playbook
Edward Shek also lays out a clear, practical approach to earnings season.
Key ideas:
✅ Have an actionable watchlist.
Not just tickers, but researched names you're ready to trade immediately if they hit your price or react to earnings.
✅ Prepare in advance.
Don’t YOLO big size into earnings without understanding the risk/reward.
✅ Use options to manage risk.
If you want exposure to a big upside move, consider out-of-the-money calls instead of big directional size.
✅ Plan position management ahead of earnings.
Two days before results, ask:
How much will I make if I'm right?
How much will I lose if I'm wrong?
Is that risk/reward acceptable?
Building an Actionable Watchlist
This is something ITPM emphasizes hard, and Edward Shek hammers home to ITPM students repeatably.
Your watchlist should be:
Researched. Know the company, the catalysts, the risks.
Actionable. You're ready to trade it today if needed.
Updated. Rotate out stale ideas.
It’s your ammo for when opportunity hits.
✅ Don’t have 50 random tickers.
✅ Don’t freeze when it’s time to trade.
✅ Keep your “sub bench” ready to go.
Trading Psychology: Staying in Motion
Another key lesson is about mindset.
Markets change constantly. You can’t control them—but you can control your plan and actions.
✅ Avoid paralysis.
✅ Don’t hope losers will come back.
✅ Don’t obsess over daily P&L swings.
Plan your risk. Keep your book moving. Adjust as needed.
Edward Shek and ITPM: The Pro Mindset
These insights I’ve picked up from Edward Shek’s teaching at ITPM aren’t about magic stock picks or fool proof predictions.
They’re about thinking like a professional risk manager.
✅ Know your bias.
✅ Know your risk.
✅ Be willing to adapt.
✅ Keep your positions meaningful.
✅ Have a process for earnings.
✅ Stay in motion even when it’s tough.
That’s the core message I wanted to pass on to anyone learning through ITPM or trading seriously on their own.
Wrapping It Up
Trading isn’t about always being right—it’s about managing risk, keeping your book alive, and adapting as the market changes.
These insights I’ve picked up from Edward Shek’s teaching at ITPM have helped me approach trading with more clarity and discipline. I hope sharing them helps you do the same.
Whether you're new to trading or looking to level up, remember:
✅ Plan for uncertainty
✅ Know your risk.
✅ Keep learning.
FAQs
What is ITPM?
The Institute of Trading and Portfolio Management (ITPM) is a trading education firm that helps retail traders learn professional-level trading skills.
Who is Edward Shek?
Edward Shek is a senior mentor at ITPM, known for his candid, no-nonsense approach to trading strategy and risk management.
Do I need a macro view to trade well?
You don’t need to predict macro perfectly. You need to understand it and plan for different scenarios so you can manage risk.
How can I manage risk better?
Model your losses in advance.
Cut dead positions.
Use hedges.
Size your trades appropriately.
How do I get better at trading earnings?
Build a researched watchlist.
Decide on your risk/reward before earnings.
Use options for defined risk.
Be disciplined about size and exits.
Disclaimer:
The information contained in this article is provided for general informational and educational purposes only and does not constitute financial, investment, or other professional advice. The content reflects the personal opinions of the author based on publicly available information at the time of writing and should not be relied upon as the basis for any investment decisions. Earnings reviews may contain forward-looking statements that are inherently uncertain and subject to change.
Readers are strongly encouraged to conduct their own research and due diligence, and to consult with a qualified financial advisor or licensed professional before making any investment or trading decisions. The author and publisher make no representations or warranties, express or implied, as to the accuracy, completeness, or reliability of the information provided and accept no liability for any loss or damage arising directly or indirectly from the use of or reliance on the information herein.
