Trading and Improvisation

Traders and investors can learn a lot from comedy improv and jazz music.

Those fields are like trading, in that you are putting yourself into a chaotic and fluid environment where you have to key off ever-changing data.

Comedians have to react to their fellow improv members, while the jazz musician has to play off the others in the jam session. Traders, of course, have to react to the actions of other market participants - as reflected in price changes.

Improvisation is not simply reacting from the gut or the wild idea that pops into your head. Good improv is where you pull out a pattern from your past experiences and adapt it to the present conditions.

For traders, this involves having a few patterns or bread-and-butter indicators that form a basic trading system. Your system should not be over-fitted so that it tries to have rules for every possible market condition.

Instead, it needs to be simple, solid, and robust - so you can use it as a framework to make real-time trading decisions.