Oct

22

It's bush fire season in Australia. Maybe there are some market lessons on the table as well.

"NSW Fires: If you live in the bush, build for the bush"

"Individuals who choose to live in the bush as a lifestyle or economic decision might learn from Europeans threatened by Viking raids. They responded by retreating to compact, walled, defensive townships surrounded by open killing zones. Similar principles apply against bushfires — concentrate dwellings behind a short defensive perimeter, build houses that survive fire, and avoid, at all costs, dispersed housing that is vulnerable and costly to defend"

My market lessons are as follows:

Concentrate dwellings behind a short defensive perimeter = tight stop

Build houses that survive fire = trading account with solid management and plan

And avoid, at all costs, dispersed housing that is vulnerable and costly to defend = wide stops, in a high volatility environment that has not been back tested and uncorrelated to your main trading strategy. 


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