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.

6 views0 comments

Recent Posts

See All

Tl:Dr - Day trading isn't the way. Stressing about circumnavigating PDT also, isn't the way. I know it's unpopular and I also recognize I also wouldn't have wanted to hear that when first starting of

The markets are incredibly complex, there are near infinite inputs, with some being generally important but circumstances can arise that make seemingly trivial forces incredibly important. https://www

When is optimal to exit a trade? As you hopefully can guess “optimal” is extremely subjective. There’s are TONS of colloquial “best practices” thrown around - X% profit in Y% of time. Traders (myself

Post: Blog2_Post
bottom of page