“Playing probabilities is probably a good thing, you go into Vegas and you want to start betting at the craps table, and you kind of play the odds. If you play odds, that can help be your guide.”
- Los Angeles Angel GM Billy Eppler
I knew I’d eventually come across something in all the reading I do that we could bring back to trading. The quote was in an article on the proliferation in baseball to use bullpens earlier. A few points were that the starting pitcher’s odds of success after going thru the other teams’ line up two times were diminished while the ability to match a bullpen pitcher’s strength to an upcoming opposing hitter’s weakness were greater.
And like the setups we use every day in our trading room…or the price levels I put on the nightly newsletter…those let us play probabilities; they let the odds be our guide.
But just like a manager’s use of his bullpen won’t end up working every time, so is it with our setups and levels. But by reminding ourselves that the odds for success are with us it can help us to pull the trigger.
“One of the things I identified was that I wasn’t always as positive as I should be. From that point on, I started being more positive by filling my mind with positive things and now that’s one of the things I want to pass on to the young guys: that if they fill their minds with positive things and think good thing are going to happen, they are shooting down those mental barriers that sometimes we create”
- Chicago White Sox first baseman Jose Abreu
Abreu is one of 3 players in major league history to begin his career with four or more consecutive seasons of 25-plus homeruns and 100 RBI’s. That’s a pretty impressive stat – but yet he points out that he made an assessment of himself after the 2016 season and realized he needed to change his attitude.
That illustrates a couple of things to us traders. Here’s a guy who has had great success- but he felt a more positive outlook would help him. We’ve talked in these blogs about a “positive mindset” – and here is more proof of how important it is.
Most traders reading this will attest that there is an over-riding negative voice in our head:
“Don’t take this trade. It’s not going to work” (when the probability that it will is sufficiently high)
“Take a profit NOW! Grab those 2 ticks!!!” (when the probability of the trade paying 4,5 times that is very high)
Aren’t those mental barriers that we create?
Time to get back to the Sunday morning routine…thanks for reading.