Tag: Trading Education

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Kevin Slavin: How Algorithms Shape Our World

A great talk on algos and how they are shaping the financial markets in many ways surprising to most people.

The talk was done back in July 2011. Notice that the algo driven behaviour in financial markets has evolved even more surreal over the past few years.

Normal people assume things. Most people assume that they cannot compete against the bots. That’s true. Competing against the bots in their domain, speed, is a very stupid thing to do. But there are other ways to beat them just like any financial markets ever existed since thousands of years ago.

The bots are the crowd now. They are the stupid ones.

The micro structure of the most popular financial markets are getting more and more predictable as these algorithms in aggregation reinforcing their rule-driven, mechanical decision makings. Boldly speaking, I find this environment easier to trade than ever. Just accept the game as it is and look at it objectively. You will find recurring patterns everywhere that are exploitable.

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Malcolm Gladwell: Why Do Some Succeed Where Others Fail? What Makes High-Achievers Different?

This video is a talk / Q&A back in 2009 on his book Outliers. This video is 50 minute long.

There are 2 things in the video worth special mentioning here:

First, the 10,000 hours rule is approximately 10 years for many people in the research results he has look into. Trading, an intensive mental exercise, can range from about 4 hours to 10 hours a day depending on the instrument you choose to trade. If you are really focused in learning to trade properly, it will still take at least 5 years (i.e. 10 hours a day) to get you to a point you are very good at trading.

The point is that you have to be patient and persistent in your quest to become a good trader. You need a plan where you will put in at least several years that you know you may not be profitable at all. There is really no shortcut.

Second, a recurring theme in the video is privileged advantage which can affect your chance of success in your pursuit of a career in trading significantly. When you are young, you may not be in a position to choose trading as a career. When you have already established a career in another field you may not be in a position to jump ship and give it 5 years to achieve consistent performance in trading.

For those who are not lucky enough to have support from their family or a cushion of capital large enough to sustain the long road to trading successfully, my advice is to look at alternative trading. Trading is not a single path skill. There are many markets to choose to choose from that require very low initial capital. There are also many trading styles that allows you to trade while you are making your ends meet.

If you plan your trading carefully, you will be able to overcome the initial disadvantage eventually.

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