Apr

27

 The more accommodating to other drivers I am, the easier it is to get through traffic and avoid potential crashes. Meaning, in those 100 brief moments of interaction between drivers that occur on any city drive, even in a city like Chicago that lacks any notion of community spirit, more than 50% will attempt to return the favor if you yield first are courteous. So you get a positive expected value, perhaps do to the psychological pull of the reciprocity principle.

I am wondering if there is application to this in our trades. One thing I like to do is start with passive orders that are pre-placed, then if/once those fill and the other guy has had his way, I "take my turn" and go active. And it seems many times there is a line of cars that follow along behind me taking their turn as if they were waiting for me to make a move. That observation would need to be tested, as it is based only on my ad-hoc observations. Perhaps this reciprocity or "taking turns" analogy can be extended to broader market action in some way.

anonymous writes: 

A substantial personage in whose employ I was for a few years used something like this,

Using T note futures as an example, he would offer, say, 2000 lots at say 19/32, 'allowing' the market to buy from him (letting them have their way). Once filled he sold 10000-15000 at the market–overwhelming them–taking his turn, as it were!

Ha!

Ed Stewart writes:

That is exactly what I am referring too, only my experience is not at that size or in that market. My (ad-hoc) observation is it is a useful tactic precisely when it seems most foolish by "normal" logic that does not take into account how it alters other trader behavior (similar to the driver analogy)–creating a shift in tone or sentiment for the rest of ones "drive home". 

Anatoly Veltman writes:

Ed, not sure if anyone finds ANY link to markets further in time of this discussion - but I have a comment re: your initial premise.

I've driven over a quarter million miles, mostly 30-foot vehicles, without an accident. I happen to be a holiday driver (i.e. not driving daily where I live in NY, and not having owned a single car since my distant student years). Unfortunately for myself, I'm yet to own GPS or even use one for the first time - this btw may tie into FB raw that list just went thru. I never opened a FB account to date, either. I think we venerable listers may be too lazy to adopt the basic society's milestones - and no wonder the latest 24y.o. billionaire is way ahead..

What I did found on my dozens drives coast-to-coast and the hundred drives of the entire length of the I-95 was appalling to me, but apparently a norm to what you're participating in daily. Passing thru any urban thru-fare, I see cars obediently lined up for minutes (and possibly adding up to hours), invariably leaving the right lane completely empty and entirely legal to drive on (this is the regular lane on the left of the prohibited shoulder lane). If I once did NOT make use of that legal right lane, giving me substantial edge in traffic, I'd quit long-distance driving summarily. But as it is, it gives me tremendous pleasure to skip hundreds of area regulars in minutes, and leave their daily congestion in rear-view mirror


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