quotes

4-Hour Body Principles in Trading

I was reading The 4-Hour Body by Tim Ferriss and found two quotes that are highly applicable to trading:

On psychology:

Does that mean [the workout routine] won’t work for some people? No, it just means that it will fail for most people. We want to avoid all methods with a high failure rate, even if you believe you are in the diligent minority. In the beginning everyone who starts a program believes they’re in this minority.

Take adherence seriously: will you actually stick with this change until you hit your goal?

If not, find another method, even it it’s less effective and less efficient.

On listening to others:

Everyone you meet (every male, at least) will have a strong opinion about how you should train and eat. for the next two to four weeks, cultivate selective ignorance and refuse to have bike-shed discussions with others. Friends, foes, colleagues, and well-intentioned folks of all stripes will offer distracting and counterproductive additions and alternatives.

Nod, thank them kindly, and step away to do what you’ve planned. Nothing more and nothing different.

Innovation

If you’re starting out, don’t worry about being innovative.  Find a methodology and trade it with extreme discipline.  For the first couple years, innovate by reducing your errors.  Only add when there is nothing left to take away.

– Dynamic Hedge from 10 Tip From the Trenches

Patience

Every investment strategy goes through periods where it works poorly. That’s life. If you have a strategy that always works well, that means:

  • You haven’t run it long enough.
  • You’re not running enough money.
  • You’re not taking enough risk.

Survive through your bad times, and prosper during the times where your intelligent strategy is paying off. Patience is a virtue in investing for the most part.

– from the post “If you want to be Well-off in Life” by David Merkel from The Aleph Blog

MR Swing System Development

Our system  design starts  with the  core principles  outlined  in the introduction: (1) we exploit different characteristics of markets by using a market‐regime‐switching method to take advantage of short‐term mean‐reversion in the bear regime, and deploy swing trading in the bull regime.  Next, we will employ (2)  non  symmetrical  trading  algorithms  for  entries,  exits  and  the  regime  specific  trading  algorithms. Every system component must be based on (3) volatility adaptive metrics so that it can handle changes in volatility over a long time span.  Finally, we recognize that no regime switching model will be able to  eliminate  all  false  signals  and  each  core  system  component  must  exhibit  (4)  robustness  to  regime whipsaws.

– from MR Swing