Jan

16

Wisdom From Airforce Training Manuals, from Anatoly Veltman

January 16, 2012 |

5 Comments so far

1. Andre Wallin on January 4, 2012 12:19 pm

   since i started trading i have thought that if the trade is so obvious why doens’t it go there immediately…and thus insecurity regarding entering every trade. I think Galton’s explanation of certain persons’ ability to visualize can offer a newer trader some insight into why there is an edge when it doesn’t go there immediately. i don’t think algos can visualize as well as certain humans can.

2. Tom on January 10, 2012 3:51 pm

   Market implications?

   ‘If the enemy is in range, so are you.’ -Infantry Journal-
   When a ‘trend’ is obvious, there are few people left to join it, and there is probably more profit in going the other way.

   ‘It is generally inadvisable to eject directly over the area you just bombed.’ -US.Air Force Manual -
   If you need to get out of a big position quickly, don’t let the dealer read you and preferably execute where they don’t know your exposure. You can net it off later.

   ‘Whoever said the pen is mightier than the sword, obviously never encountered automatic weapons.’ - General MacArthur -
   Don’t think you can compete against the smartest minds using the best technology with a little trend line, moving average, and textbook cliche.

   ‘You, you, and you … Panic. The rest of you, come with me.’ - Infantry Sgt.-
   Do not do what everyone else is fond of doing. Let them do it far away from you and profit from their mistakes.

   ‘Tracers work both ways.’ -Army Ordnance Manual-
   This relates to prudent safeguards when putting on size, especially not leaving stops with brokers. Having a hard stop gets you out, but also gets you seen.

   ‘Five second fuses last about three seconds.’ - Infantry Journal -
   Never try for the first or last eighth which are the two most expensive ticks in trading. (paraphrased)

   ‘Any ship can be a minesweeper. Once.’ - Naval Ops Manual -
   Importance of position sizing. Not placing any career defining / ending trades in volatile conditions.

   ‘Never tell the Platoon Sergeant you have nothing to do.’ -Unknown Infantry Recruit-and if hed asks who knows how to drive a Cadilac…….keep your mouth shut !
   Traders who always need action and do not understand that the odds do not always favour their participation will end up being given something unpleasant to do - tending to bad trades.

   ‘If you see a bomb technician running, try to keep up to him.’ - Infantry Journal-
   When flight to quality / risk off, buy bonds.

   ‘Yea, Though I Fly Through the Valley of the Shadow of Death, I Shall Fear No Evil. For I am at 50,000 Feet and Climbing.’ - Sign over SR71 Wing Ops-
   Once you intimately understand yourself, your abilities, and trust in your risk management there is nothing to fear from trading.

   ‘You’ve never been lost until you’ve been lost at Mach 3.’ -Paul F. Crickmore (SR71 test pilot)-
   Have a plan for every eventuality and follow it. If something unexpected happens, get flat. If you have made a fat finger, don’t think about the loss or the exposure just get flat. If you’re on the wrong side of a flash crash, get flat now not 60 points lower.

   Perhaps lessons for the trader rather than lessons about the market. The rest don’t seem to “fit” for me or I lack the creativity, so not going to force. Got the old brain doing something different though, thanks….

3. Anonymous on January 14, 2012 1:57 pm

   good job Tom

4. vic on January 14, 2012 7:09 pm

   let us post tom’s extensions at the top of the spec page in admiration and in his honor. vic

5. Lon L on January 17, 2012 3:44 pm

   My own attempt..

   ‘If the enemy is in range, so are you.’ -Infantry Journal-
   If you are in a trade, so is someone else who is on the other side of it.

   ‘It is generally inadvisable to eject directly over the area you just bombed.’ -US.Air Force Manual -
   It is generally inadvisable to re-enter a trade, if you were just immediately taken out of it

   ‘Whoever said the pen is mightier than the sword, obviously never encountered automatic weapons.’ - General MacArthur -
   Whoever said the pen is mightier than the sword, obviously never encountered HFT’s

   ‘You, you, and you … Panic. The rest of you, come with me.’ - Infantry Sgt.-
   you, you and you…SELL. the rest of you, start buying.

   ‘Tracers work both ways.’ -Army Ordnance Manual-
   chart patterns work both ways

   ‘Five second fuses last about three seconds.’ - Infantry Journal -
   3% stops, get triggered 5% lower.

   The three most useless things in aviation are:Fuel in the bowser; Runway behind you; and Air above you. -Basic Flight Training Manual-
   the three most useless things in trading are: CNBC,hot tips and the position you closed yesterday thats finally moving out today.

   ‘Any ship can be a minesweeper. Once.’ - Naval Ops Manual -
   Remember Jesse Livermores ending.

   ‘Never tell the Platoon Sergeant you have nothing to do.’ -Unknown Infantry Recruit-and if hed asks who knows how to drive a Cadilac…….keep your mouth shut !
   Never tell anyone about your current winners.

   ‘If you see a bomb technician running, try to keep up to him.’ - Infantry Journal-
   When famous super-permabulls turn bearish, its time to sell.

   ‘Yea, Though I Fly Through the Valley of the Shadow of Death, I Shall Fear No Evil. For I am at 50,000 Feet and Climbing.’ - Sign over SR71 Wing Ops-
   Yea, Though I Fly Through the Valley of the Shadow of Death, I Shall Fear No Evil. For I am up 17% for the year and Climbing.

   ‘You’ve never been lost until you’ve been lost at Mach 3.’ -Paul F. Crickmore (SR71 test pilot)-
   you’ve never been lost until your 10x leverage positon disolves overnight on some soveriegn this or that

   ‘The only time you have too much fuel is when you’re on fire.’ -Unknown Author-
   The only time you have too much cash is when they are ripping ‘em higher

   ‘Without ammunition, the Air Force is just an expensive flying club.’ -Unknown Author
   Without cash, traders are just electronic solatiare players.

   ‘If you hear me yell; “Eject, Eject, Eject!”, the last two will be echos.’ If you stop to ask “Why?”, you’ll be talking to yourself, because by then you’ll be the pilot.’ -Pre-flight Briefing from a Canadian
   F104 Pilot-
   If you hear me scream SELL, SELL,SELL the last two will be echos’. If you stop to ask why, you’ll be alone and I will be at the bar.

   ‘What is the similarity between air traffic controllers and pilots? If a pilot screws up, the pilot dies; butIf ATC screws up, …. the pilot dies.’ -Sign over Control Tower Door-
   What is the similarity between traders and financial commentators? If a trader screws up, the trader dies. If a financial commentator screws up, the trader dies.

   ‘Never trade luck for skill.’ -Author Unknown-
   NEVER EVER TRADE LUCK FOR SKILL EVER.

   The three most common expressions (or famous last words)in military aviation are:’Did you feel that?'’What’s that noise?’and’Oh S…!’ -Authors Unknown-
   The three most common expressions for traders are “Hmmm.that’s odd..”Uh-oh” and ‘Oh F…!!”

   ‘Airspeed, altitude and brains. Two are always needed to successfully complete the flight.’ -Basic Flight Training Manual-
   Price, time and brains. Two are always needed to successfully complete a stock campaign

   ‘Flying the airplane is more important than radioing your plightto a person on the ground incapable of understandingor doing anything about it.’ -Emergency Checklist-
   Managing your massively imploding position is far more important than calling your wife to explain your soon-to-be change of work status as she is probably incapable of understandingor doing anything about it

   ‘The Piper Cub is the safest airplane in the world; it can just barely kill you.’ - Attributed to Max Stanley (Northrop test pilot)-
   DOW 30 stocks are the safest stocks in the world; they can just barely kill you.

   ‘There is no reason to fly through a thunderstorm in peacetime.’ -Sign over Squadron Ops Desk at Davis-Montham AFB, AZ-
   There is no reason to be aggresively long stocks when they are going sideways.