top of page

Complex Systems and Predictability

  • "The SP500 dropped 30 points because of X or Y". Sometimes, things are indeed that clear - COVID, 2008 Housing market collapse, etc. However, more frequently than not, it isn't. We then attempt to apply a simple and neat assumption to explain what's happening.

  • The problem is, complex systems don't care about our convenience in comprehending what's happening.

  • The stock market is an incredibly complex system - much more than what most people comprehend.

  • This leads to the main section of this week's UTM (Under the Microscope) - do NOT fall for simple narratives explaining complex systems. They're generally wrong.

  • There's nothing wrong with following the markets and identifying connected systems and creating observations over time. The issue comes when we start to believe our own predictive capabilities and rely heavily on them in our edge creation process.

  • Create observations. Severely doubt most of them.

8 views0 comments

Recent Posts

See All

Path to Options Proficiency

For the new traders, whatever you do, do NOT allow the disenfranchised internet trolls dissuade you from learning and asking questions. The goal of this post is to encourage new traders to stay the pa

Options Trading for Wealth Development

Like most, I started trading to create wealth and change the trajectory of my life. I started in 2007 with options and learned a really important lesson - consistency is far more important than huge r

You're ALONE

For the first 3 years of my trading, I kept no logs, had no written plan, and did what most do. I thought I was careful, consistent and wouldn't need to write things out because unlike the millions of

Post: Blog2_Post
bottom of page