The concept of dynamic potential in chess is used to describe the potential energy contained within positions and explains much of the area in which classical chess theory (concerning space, weak pawns, material etc) tends to get it wrong. As with the Bosphorous, the underlying currents can often be going in the opposite direction to what is apparently on the surface. So when one player appears to be on the attack, in reality the floor can be crumbling beneath him. Or a player who is being pressed might be ready to exploit the weak squares that his bridge-burning opponent is leaving behind.

I believe that such energy flows are even more evident in markets than in chess, e.g. money that is withdrawn and on the sidelines increases dynamic potential. Of course the big question is how to measure this potential, and with chess it tends to be more art than science. Strangely enough the two players that stand out in my mind as being most adept at this are Leonid Stein and Tigran Petrosian. But despite the apparent dissimilarity in their styles, both are masters of the exchange sacrifice (i.e., rook for bishop or knight).

There are some known phenomena in markets, in which dynamic potential noticeably increases, such as Victor and Laurel’s healthful day (i.e., when everything is down). It would also seem to be interesting to consider loud events which might attract new money or evict some of the old, such as the ‘new high in the Dow’ or ‘two bucks to the pound’. At such times a market might well get out of sync with the usual wheels and pulleys that bring it back into line.


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