Tuesday PM Notes - Simplifying the Game

While watching tonight's Bruins - Canadiens game, Andy Brickley (the color commentator) mentioned that one of the reasons Montreal is playing well is that "they've simplified their game". What he meant was that they pass up ice quickly, head to the net, and shoot toward the goal from any angle. Simply put, they react ... quickly.

After watching the first period, it's clear that the Habs (Canadiens for non-hockey enthusiasts) are clearly on their game. They know where each teammate will be before they get there, and pass to the open space to where the teammate will be ... not where he currently is. And while it seems they do so without thinking, I imagine the years of practice and repetition have programmed their minds and actions in such a way where it just seems they're not thinking. The Habs are clearly in the proverbial zone.

Thinking back to today's trade, it was a similar game of simplicity, reaction, and reflexes. Simplicity based on repetition of a very simple pattern. Reaction based on years of burning the probable pattern following a trend day into one's brain and anticipating where the market is likely to be a few seconds or minutes later -- versus where it currently is. Those that have been following the blog likely know the pattern well. No thinking. Or perhaps better said ... no over-thinking. Just reacting.

I also noticed several times where the market did its best to shake ES traders from their conviction with a third cruel 1-min stop-triggering surge before the expected reversal took hold (see attached chart ... click to enlarge). That's where the years of pattern burning came in handy. All in all, I tended to hang in there fairly well today with few scratches or stops.

Sure it's always about probability, as the market sometimes trends hard two days in a row right out of the gates. It's rare, but it happens ... just like pocket Kings can get trumped by pocket Aces.

Yet like poker, probability over a long period of time is what it's all about.

Back to the hockey game ... and yes, I'm a Bruins' fan.