I thought I’d record a few thoughts and conclusions I had after reading “Thinking in Bets” – Annie Duke. A lot of interesting concepts on how to think or frame situations when it comes to decision making. The ideas seem to straddle the area between Game Theory and Psychology. The idea of ‘thinking in bets’ resonates with me and this book was a very easy audio listen.
Certainty is an illusion.
There is no certainty in trading, in crypto, in life. Each trade is a bet on an uncertain future. The outcome of every decision is uncertain The outcome of every action is uncertain, and likewise, the outcome of every inaction is also uncertain.
The outcome of every action & inaction is uncertain.
By ‘thinking in bets’, it is possible to differentiate between luck and the quality of our decisions. It means, not automatically assigning bad outcomes to ‘bad luck’. Bad outcomes can (and should) be used to update our models/world view.
A great outcome does not always follow a correct decision.
We are never 100% wrong or right. By aiming to anticipate the full range of possible outcomes of a decision, we can aim to be more right than wrong.
Beliefs are more easily obtained than questioned/challenged.
What are You? Are you your body? Are you your ideas? Challenging your ideas can feel like challenging your existence, it needn’t and shouldn’t – especially in trading.
“In the moment” decisions are much more likely to be irrational than planned-out decisions.
Planning is a part of the journey, and can often be the ”most fun’ part of the journey. Plan well and everything there-after can be automated.
Changing a ship’s course by only 1 degree can change the final destination significantly.
‘Insignificant’ changes/developments today lead to significant rewards in the future.
Wishing everyone the best in their journey