the sharks are circling…
when even Chris Matthews loses the thrill up his leg you know that you’re in trouble if you’re a Democrat
incompetence across the board on every major project, healthcare is a disaster, the president is out of touch, even the media is starting to ask the questions that should of been asking five years ago. Democrats are scrambling to build a firewall around Hillary in the presence about find out how lonely it is at the top
English: Chris Matthews at the 2010 Time 100. (Photo credit: Wikipedia)
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IRS managerial incompetence: as if
IRS malfeasance: what a farce, to claim this is simple negligence and that “mistakes were made, nothing to see here, move along”.
if it really were incompetence, then you would expect for a number of errors of this type to be committed that crossed all sorts of political boundaries, but because ONLY conservative groups were systematically investigated and delayed then it is clearly evidence of a different sort of agenda.
This isn’t simple negligence, this isn’t even gross negligence; this is willful misconduct and is the consequence of too much power centralized in Washington.
This is nothing other than simple power politics, using the instruments of bruite bureaucracy to reward your friends and punish your enemies, and all the civil liberties people who ought found their voices to rage against the Patriot Act are typically silent when its not their ox being gored
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FC Kansas City wins their first league game, top of the table vs Seattle Reign, 2-0
G
English: Lauren Cheney of the (WPS) Womens Professional Soccer Club, Boston Breakers. (Photo credit: Wikipedia)
reat win by FC Kansas City vs Seattle Reign last night; FCKC plays an attractive possession -style game and take their chances with quick counterattacking strikes using their speedy striker. Lauren Cheney showed why she is world class in the midfield, bringing calm and order to the game whenever she got the ball on her foot. Strong and confident with the ball, she plays connecting passes with superb touch. Scott was great in the holding midfield role, winning possession and stopping the Reign counterattacks countless times. The outside wingers and backs are very active and provide support with confidence and speed. The center backs are strong, fast reliable in possession and get the attack moving on both sides of the field. This is a great team for young soccer players to watch to see an excellent team-concept being worked under game conditions. The Blues play at a very high level, with skill, and not the usual American athletic long-ball style.
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Weekend reflection process
a depiction of Sun Wukong wielding his staff (Photo credit: Wikipedia)
RJ: the asker of great questions, asked:
Hi Ken,
Do you have anything written on a weekend review process for a trading journal and trade chart markups?
Double loop learning requires review of work but I don’t have a well-defined process for weekend reviews.
I searched the chatroom and your essays but either didn’t use the right search terms or just didn’t find anything written.
Could you recommend some reading or anything else so I can develop an effective weekend process?
Thank you.
RJ
I replied: Try this on: this is what i find myself doing, over and over until someday I get it right:
0. Center ourselves on who we are and feel gratitude for the gift of life and consciousness to reflect on the wonder that is our Self and the world around us
1. Accept who we are and our desire to improve
2. Review what we aim to know, to do, to be (review goals and objectives)
3. Review the facts about what was done, including detailed performance stats as part of our ongoing study
4. Observe the slope of the trendlines and the volatility of our performance (all our trades and all our actions and all our feelings)
5. Review the forms and checklists to ensure discipline was performed; what did we overlook, where did we take shortcuts, and why?
6. Look for moments arising from the facts that seem to be important, trusting in our intuitions to nominate reflections
7. Follow the trails of reflection, connected to facts
8. Identify the A HA! moments
9. Conduct the 4 part learning journal exercise (A Ha moment, Reflection, Commitment to action, Results)
10. Commit our spirit and self to the next cycle of the wheel of improvement which continues to turn
this is what happens when i start writing after reading from the book of tales of Sun Wukong (The Monkey King)
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Models and “maps” as guides to thinking
In the OD network on LinkedIn a question was asked “What models have you found to be effective?”
my thoughts were:
Models are maps.
I once used a map to help navigate an unfamiliar territory.
At different times the map was alternately more and less helpful.
It’s good to know the uses and limits of maps.
It’s interesting to be a map-maker.
It’s good to know how good is the map is
It’s good to learn to judge the opinions of others about maps
I trust the maps of trustworthy scouts
Don’t forget to look where you going while you consult the map
You might want to look around first before you consult the map
You might want to look around AND consult the map before you start walking
If being tracked by wolves, you better not consult the map for too long
You either have to go to unfamiliar places or wait for the world to bring you what you need
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Approaching trading as a High Reliability Organization (HRO)
Logo of the United States National Wildfire Coordinating Group. (Photo credit: Wikipedia)
We know from scholarly and popular literature that 90% of new businesses fail in the first five years as an additional 90% fill in the next five years and yet there are groups of organizations that are remarkably successful while operating the most difficult of circumstances when you would expect failure to be the norm. These organizations which thrive in high risk, high uncertainty environments in which failure is catastrophic are collectively known as high reliability organizations (HRO). Scholars have taken a number of different approaches to the subject of HR role in the literature. They have approached it from the disciplines as diverse as: neuropsychology, civil engineering, organizational psychology, sociology, naval aviation and nuclear propulsion.
My own research on decision-making under conditions of uncertainty led me to the scholarly literature on high reliability organizations(HRO) through the approach of social psychology where the two most influential writers are Weick and Sutcliffe from the University of Michigan. They had identified five qualities of HR role that lead to exceptional outperformance and the development of organizational resiliency. Resiliency is an important topic for traders because it describes strategies and resources that help the trader endure through emotionally challenging and training times. Because traders operate under high stress and uncertain conditions all the time, it occurred to me that perhaps the principles of HRO might have some pay off for traders. I was happy to find the important connections that can be of benefit to traders in developing robust trading plans and emotional resilience.
Weick and Sutcliffe identify five qualities of HRO’s which distinguish them from traditional organizations which traders might seek to develop in their own trading plans:
1) Preoccupation with failure: To avoid failure we must look for it and be sensitive to early signs of failure; not to lay blame but to ensure the plan does not further unravel
2) Reluctance to simplify: Labels and clichés can stop one from looking further into the events; consider the evidence for your beliefs carefully and don’t oversimplify.
3) Sensitivity to operations: Systems by nature are dynamic and nonlinear; it can be hard to know how the different pieces fit together and how quickly things may change.
4) Commitment to resilience: you must be able to perform during periods of high stress. This means you have to be able to absorb strain,, recover from difficult situations, and then learn and grow from previous episodes.
5) Deference to expertise: This means respecting the evidence of the results and having confidence in the quality of your justified conclusions. These are more important than platitudes and conventional wisdom.
Firefighters are an example of an HRO in practice that traders can learn a lot from. The National Wildfire Coordinating Group (NWCG) has developed a set of 10 Standard Fire Orders, which are a logically organized set of rules that have been keeping firefighters alive and successful in their mission since 1957. They are to be implemented systematically and applied to all fire situations. They also have identified 18 watch out situations that represent known conditions of especially high risk. These apply equally well to traders as I tried to show below.
Professional Trader Behavior (adapted from the NWCG: http://www.nifc.gov/safety/safety_10ord_18sit.html)
1. Keep informed on market conditions and forecasts.
2. Know what your market and target are doing at all times.
3. Base all actions on current and expected behavior of the market and target.
Market Safety
4. Identify escape routes and safety zones and make them known.
5. Post lookouts when there is possible danger.
6. Be alert. Keep calm. Think clearly. Act decisively.
Organizational Control
7. Maintain prompt communications with your brokers, partners in the market.
8. Give clear instructions and insure they are understood.
9. Maintain control of your trades, orders and decisions at all times.
If 1-9 are considered, then…
10. Trade the market aggressively, having provided for safety first.
The 10 Standard Orders are firm. We don’t break them; we don’t bend them. All traders have the right to a safe environment is.
The 18 Watch Out Situations
1. The market and your target not scouted and sized up.
2. You haven’t planned for or rehearsed this situation.
3. Safety zones and escape routes (protective stops) not identified.
4. Unfamiliar with market and sector factors influencing price behavior
5. Uninformed on strategy, tactics, and hazards.
6. Instructions and assignments not clear.
7. No communication link between traders, brokers and partners
8. Entering trades without predetermined exit points
9. Trading without stops.
10. Chasing a runaway breakout
11. Not being aware of critical states
12. Unaware of broader market condition.
13. Unaware of potential market turning points
14. Price range begins to expand in short term time frame.
15. Change in broad market volatility.
16. Ignoring signals of changing market conditions.
17. Difficult to judge where to play safety stop.
18. Feelings of physical, mental or emotional fatigue.
Note that these are just my own quick interpretations; yours might vary. The exercise in translating from firefighter perspective to that of a trader is definitely worth doing on your own as well. Give it a try!
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Online courseware
am eating my own cooking by starting 2 online courses as a student: the Sante Fe Institute’s MOOC on Complexity nad the MIT course on Creative Learning. I am in Lesson 1 of complexity and having a blast. Its well done and highly recommended already
