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Quote of the Day

On Sunday we had the middle meeting of our Mentor Program and one of the topics that always creeps up is the desire for complexity within trading. There is a belief that the more complex your system the better it will be In part this is due to the illusion of control that such approaches engender. We feel that if we have much greater input into the system then the system somehow will exert a degree of control or rationality over the market. This is analogous to why people pick their lottery numbers rather than letting them be generated randomly. The odds of winning do not change with either method but the first creates the illusion of control.

As chance would have it I came across the following quote which touches on the notion of simplicity.

“Simplicity is the last step in art and the beginning of nature.”

– Bruce Lee.




Insisting on perfect safety is for people who don’t have the balls to live in the real world.
Mary Shafer -NASA Dryden Flight Research Center, Edwards, CA SR-71 Flying Qualities Lead Engineer

I stumbled across this quote and thought it was the most perfect description of what is required for trading. If you dont have the nerve to accept that trading is an imperfect, dirty and chaotic endevour then it is not for you. If you want the full context of this quote you can find it here. It sounds as if Shafer had a fascinating career as an aerospace engineer during NASA’s heyday.

PS: If you dont know what an extraordinary piece of engineering an SR-71 is go here

Quote Of The Day

Came across this and thought it apt for current times.

Everything we hear is an opinion, not a fact.

Everything we see is a perspective, not the truth.

Marcus Aurelius


“Every action is measured by the depth of the sentiment from which it proceeds.”

Ralph Waldo Emerson

“I like… fat… tails and I cannot lie, You vol sellers can’t deny…”

I like… fat… tails and I cannot lie
You vol sellers can’t deny
When a hot trend breaks with a well-timed stop
and a great big black swan pop you get
Paid… P&L year gets made
‘Cause you noticed that trade was packed
Buncha mean reversion suckers got jacked

Oh baby I wanna get lumpy
Long gamma for when it gets bumpy
Central banks tried to haze me,
But those carry trades just don’t faze me!

More here from The Mercenary Trader

And for those who cant remember the 90’s



Playboy: If life is so purposeless, do you feel its worth living?

Stanley Kubrick: Yes, for those who manage somehow to cope with our mortality. The very meaninglessness of life forces a man to create his own meaning. Children, of course, begin life with an untarnished sense of wonder, a capacity to experience total joy at something as simple as the greenness of a leaf; but as they grow older, the awareness of death and decay begins to impinge on their consciousness and subtly erode their joie de vivre (a keen enjoyment of living), their idealism – and their assumption of immortality.

As a child matures, he sees death and pain everywhere about him, and begins to lose faith in the ultimate goodness of man. But if he’s reasonably strong – and lucky – he can emerge from this twilight of the soul into a rebirth of life’s élan (enthusiastic and assured vigour and liveliness).

Both because of and in spite of his awareness of the meaninglessness of life, he can forge a fresh sense of purpose and affirmation. He may not recapture the same pure sense of wonder he was born with, but he can shape something far more enduring and sustaining.

The most terrifying fact about the universe is not that it is hostile but that it is indifferent; but if we can come to terms with this indifference and accept the challenges of life within the boundaries of death – however mutable man may be able to make them – our existence as a species can have genuine meaning and fulfilment. However vast the darkness, we must supply our own light.

Stupid Headline Of The Day

I know I should not be amazed at the limited grasp of market reality that afflicts both financial journalists and fund managers but this one is a corker.

Five-year bull run continues

“Given a five-year bull run it is impossible to argue stocks look cheap, but the market is not necessarily too high,” MLC Investment Management senior investment consultant Brian Parker said.

What market are you looking at sport? The All Ordinaries has gone sideways for since the GFC and has only shown any sort of trend since July2012 and even that has occurred in fits and starts. It is any wonder that 99% of all fund managers under perform the major benchmark indices when they cannot even identify what a  trend is.

To give you some idea of what a five year bull market actually looks like here is the All performance compared to that of the S&P500

Screen Shot 2014-03-07 at 5.48.54 pm

General Advice Warning

The Trading Game Pty Ltd (ACN: 099 576 253) is an AFSL holder (Licence no: 468163). This information is correct at the time of publishing and may not be reproduced without formal permission. It is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any of the information you should consider its appropriateness, having regard to your own objectives, financial situation and needs.