Maybe I had been staying in Singapore for too long, I tend to work or live by rules. Here is something for you to think about.
When crossing a road with moderate traffic, would you rather press the ‘cross’ button of traffic light and wait for the green light before crossing? or you will take your own steps as long as you feel it is safe without even looking at the traffic light?
I often see people ran across the road just to save his 0.1 minute, and people like me, dumb enough to just wait for the green signal before crossing.
Try to link this to your trading. What would you do? why?
Food for thought , from Gavin.
Not waiting is like this…
If you crossed enough streets, like as many as the trades you made, and the trucks were invisable, you would be dead in no time.
If you wait, your risk / reward is greatly improved since the onlyu time you would get “run over” would be when a driver screws up and wipes you out.
I can see the similarity.
Excellent. While I can’t totally avoid any accident which caused by other people’s mistake, I don’t wanna fail because of my own mistake. 😀
Not waiting is like this…
If you crossed enough streets, like as many as the trades you made, and the trucks were invisable, you would be dead in no time.
If you wait, your risk / reward is greatly improved since the onlyu time you would get “run over” would be when a driver screws up and wipes you out.
I can see the similarity.
Excellent. While I can’t totally avoid any accident which caused by other people’s mistake, I don’t wanna fail because of my own mistake. 😀
Turns out that, mathematically at least, the distinction may not really matter that much to your bottom line. Consider this last route in the credit markets, and how this hammered nearly every leveraged account trading in stocks, financial derivatives and other structured securities. People think they are their own worst enemies, and for most of us that’s probably true most of the time, but on a certain level it doesn’t really matter.
Pity the fool who, like a good trader, waited for his first real walk signal — only to get run over by a bus with no breaks. When he gets out of the recovery room, he still has to eat through a straw and shit into a plastic bag attached to his colon with a very uncomfortable tube, but he has some strength to sit in front of the screens — albeit with great difficulty. He waits, patiently. Watching signals go by until finally he gets his walking shoes. What are the odds? He steps out into the cross walk and BAM! Only it wasn’t a bus. It was his face hitting the pavement after he trips over the curb.
The market had changed — and his method no longer worked. He didn’t forget anything he was taught. Rather, the empirical facts of life changed on him. He waited for the walk signal — while the hoards crossed before and after him, oblivious to the rules. Most of them got squashed, too, but some survived to cross the street again and again.
Our trader gives up — just unlucky, he guesses. it seems inexplicable to him how some of the yahoos around him have survived and even prospered. In the end, we can only hope that we will be some of those yahoos. And since we didn’t get squashed, we might suppose that the rules we follow may just be the right ones. But Ryan Jones and Nassim Taleb remind us that trading calamities are completely unpredictable, no matter what our expectancy, consistency and confidence coefficients tell us. There is no proven strategy and “probable” may not cut it for most of us.
So I’m left wondering…I still trade, but still…how much do I really believe in my own numbers? And do I really want to wait for the walk signal, when I would get virtually the same odds crossing the street when I saw a path through the traffic?
Turns out that, mathematically at least, the distinction may not really matter that much to your bottom line. Consider this last route in the credit markets, and how this hammered nearly every leveraged account trading in stocks, financial derivatives and other structured securities. People think they are their own worst enemies, and for most of us that’s probably true most of the time, but on a certain level it doesn’t really matter.
Pity the fool who, like a good trader, waited for his first real walk signal — only to get run over by a bus with no breaks. When he gets out of the recovery room, he still has to eat through a straw and shit into a plastic bag attached to his colon with a very uncomfortable tube, but he has some strength to sit in front of the screens — albeit with great difficulty. He waits, patiently. Watching signals go by until finally he gets his walking shoes. What are the odds? He steps out into the cross walk and BAM! Only it wasn’t a bus. It was his face hitting the pavement after he trips over the curb.
The market had changed — and his method no longer worked. He didn’t forget anything he was taught. Rather, the empirical facts of life changed on him. He waited for the walk signal — while the hoards crossed before and after him, oblivious to the rules. Most of them got squashed, too, but some survived to cross the street again and again.
Our trader gives up — just unlucky, he guesses. it seems inexplicable to him how some of the yahoos around him have survived and even prospered. In the end, we can only hope that we will be some of those yahoos. And since we didn’t get squashed, we might suppose that the rules we follow may just be the right ones. But Ryan Jones and Nassim Taleb remind us that trading calamities are completely unpredictable, no matter what our expectancy, consistency and confidence coefficients tell us. There is no proven strategy and “probable” may not cut it for most of us.
So I’m left wondering…I still trade, but still…how much do I really believe in my own numbers? And do I really want to wait for the walk signal, when I would get virtually the same odds crossing the street when I saw a path through the traffic?