Apr

13

Hidden Sword, from Jim Sogi

April 13, 2007 |

Hidden Sword is a chick flick masquerading as a samurai movie. There was one good scene where the samurai went to his teacher Toda before the big showdown to the death with his friend who was ordered to kill him.

The teacher told him, "Whenever a man draws his sword, he becomes emotional and tempers go up." The teacher taught the samurai to duck and dodge, and draw the attacker. "Withdraw in body, but the spirit still advances." In that way the opponent is drawn in to attack. As the fighter withdraws, the opponent attacks and his temper goes up as there is no engagement. However the samurai waits for the opponent to have a moment of emotion or temper and rushes in reaching. At that moment, the samurai turns quickly and attacks under the opponent's sword and kills him.

In our market operations, despite quantitative signals, strategy is useful. When the opponent in the market is engaged, tempers go up. When looking for an entry, it is sometimes good to withdraw orders, but not the spirit. The opponent's temper is aroused and when there is a rushing in, that is a good time for an attack. By the same token it is good to recognize this as the market retreats from the order. Care must be used when tempers are aroused and there is danger from rushing in. There are many variations of this move in judo and aikido.

Today's market was notable for the linearity of the move after the early reversal. There have been hints in posts about automated systems. Globex is a backdrop to any system and the linearity of its function seems unnatural and nonrandom and a buffer or framework to the participants.


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