I’m reading Annie Duke’s latest book “Quit: The Power of Knowing When to Walk Away.” Though I’m only about halfway through it I can already confidently recommend this book to traders.

The book isn’t addressed to traders, though it frequently references our profession in its anecdotes and many of the stories are very relatable.

And it certainly has me thinking about better ways to decide to quit a trade, quit a strategy, or quit a product.

I frequently go down rabbit holes, experimenting with models to extract consistent, repeatable, acceptably risk-adjusted returns via index options. I’ve written about my near-constant obsession with this project numerous times. It continues.

As a trader, it’s always good to be working on some kind of “side hustle.” In our cases, this is more likely to look like building a new strategy, fine-tuning a scanning method, or constructing a money management scheme that can propel us into becoming more profitable traders.

The nature of experimenting in the markets is to lose money in the service of learning what definitely doesn’t work, so that we can continue stripping away until we get to the very essence of what does work.

But when do we quit? [Read more…]