The Difficulties of Prediction and a Trading Koan

“I possess a quality unquantifiable by its very nature.”
“And what exactly is that, Peter?”
Peter Riviera & Molly, Neuromancer

Prediction is a funny thing.  You’ll encounter lots of traders who swear up and down that what they do is not predicting the market.  This, of course, is nonsense.  When you take a position in the market you’re predicting that price will move in the direction of your position and thus you’ll be able to exit your position at a profit. It’s as simple as that.  Prediction is the heart of trading   So why do many traders, even some successful ones, deny they engage in prediction at all? Continue reading

Cool Tool

I thought people might be interested to know that Wolfram Alpha has several useful financial/economic calculators for  bonds, options, interest rates, time value & historical money etc on their website.  While lots of websites have calculators, it’s nice to have that functionality combined withe Alpha’s very good general math support.

Just a cool little something I stumbled into.  I’ve got another big post in the works that should go up today or tomorrow.