Radiation
TARAKANOV
Comrade soldiers.
The Soviet people have had enough of this accident. They want us to clean it up, and we are entrusting you with this serious task.
Because of the nature of the working area, you will each have no more than ninety seconds to solve this problem.
If you follow instructions and perform your work correctly, you will be fine. There's nothing terrible up there. But safety is our first priority.
You will enter Reactor Building 3.
Climb the stairs, but do not immediately proceed to the roof. When you get to the top, wait inside behind the entrance to the roof and catch your breath. You will need it for what comes next.
This is the working area. We have to clear the graphite.
Some of it is in blocks weighing approximately 40 to 50 kilograms each. It must all be thrown over the side here.
Take care not to stumble. There is a hole in the roof. Take care not to fall.
If any part of your skin is exposed, exit the work area at once.
Do you understand your mission as I have described it?SOLDIERS (UNISON)
Yes, Comrade General!
TARAKANOV
These are the most important ninety seconds of your lives. Commit your task to memory. Then do your job.
I write this article to share with you what is the most important thing I learned about markets this year, and I feel that the strong metaphor of the danger of radioactivity to the human body if a great fit, and a great anchor for the memory, as it is rooted in fear.
Whatever your strategy to make money in the market is, you should minimize your exposure in time to risk.
Imagine the markets as a very radioactive site, full of scattered gold/money to collect.
The longer you wander around the more you can collect - if you are right - but also the more you are exposed to RISK.
Risk, however quantifiable and measurable, is still a danger, as we operate in a field of probability. The risk of the trade going back against you, the risk of unforeseen news or events, or fat-tail events - the so called black swan - all lurk around the corner and permeate the markets like a radioactive cloud, and the more you are out there in the open, that is, in a directional position, the more you are exposed to it, to risk.
Different people utilize different approaches and different timeframes to trade the markets, some people utilize techniques that rely on footprints, some people use the aggregate “tape” of trades (aggr.trade), other people use indicators such as TSize and indicators based on Open Interest, or even simple candlestick charts, but the strategies in most cases are all centered around a core idea:
Stay out most of the time, wait for signs of market partecipants in a direction to exhaust their energy, then join quickly when it starts going the other direction, and get out fast before you overstay your welcome.
For example, here is insilico explaining how to knife catch after a liquidation event:
Here the +EV trade is not to try and guess where the move will bottom, or trying to join momentum too late and risking to short the bottom of the move, but instead to wait - flat! - and react to the liquidation event happening, then long the “mechanical” bounce back up and get out when done.
Minimum exposure, maximum gain, in and out.
(The reason why this works is outside the scope of this article)
The same strategy could be done with footprint charts and bid/ask profiles, and waiting for redacted players to “short in the hole” then play the reverse:
I am not here to teach you how to trade today, but to try and impress upon you this important message:
whatever you do, the best way to make money is to minimize your exposure to risk to the absolute minimum necessary, and play only the most “obvious” plays, the ones you can react to, not try to anticipate. We are not in the business of predicting the future, we are in the business of operating on probability fields, and so we bet our money on the plays with higher chance of playing out in our favor.