Mar

21

 I've been doing a lot of back country skiing and ski mountaineering these past few years. Each day the avalanche forecasters put out an advisory with colors: green for low, yellow for moderate, red for high. This is kind of like the DS calendar in a way. But when you get into the field there are several different areas of focus for decision making a route finding. There are the big mountains, their aspect and shape. Typically we climb up a ridge because nothing can fall down on you as you are at the high point of the local terrain. But within the bigger picture there is what mountaineers call micro terrain. Even on a safe day, a small cliff can kill you or cause severe injury. People fall into tree wells and die. We always look for the safe route up and down. Always look for an exit strategy, a 'zone of safety'. We nibble into big terrain bit by bit, never committing all the way. We test, both the big picture, and the little using techniques such as avalanche pits to test snow, ski pole pokes, ski cuts. Always gathering information during the day, ready to pull back if the micro terrain does not look good. We are always ready to, and often do, turn around.

I've been pondering this for years in markets. Even in a bull market, a micro down draft can cause havoc with a trade. Within an up day, there are down legs. These, both in markets, and in skiing are some of the hardest to see, understand and get a handle on and can be the difference between a great day and some severe problems.

The main key is to survive. Make every trip a round trip. Returning home is not optional.


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2 Comments so far

  1. Nikolas on March 21, 2018 6:43 pm

    Wondering what is most important. Magnitude or color?

    Example, week: 3 blue very low magnitude for bunds / 2 yellow with big magnitude for bunds falling. Do we have prophecies in this case for next week?

    Also Im working under the premise that the best scenario for a bull is a previous week with 5 blue days. Reverse to the mean short term equities price effect and thermodynamics principle supporting bull with bunds rally.

    The story remembered Schumacher f1 champ.. sad end

  2. Andre on March 21, 2018 7:59 pm

    Nice parallel! It’s a delicate balance the microstructure vs larger structure easy to get over focused on either to the detriment of the other. Have found testing half hourly tendencies of up days vs down days to give some help albeit small and not at all regular to predict much besides a tendency that some half hours are more bullish than others and vice versa. kind of run on there but you get what i mean

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