Legendary member
This response to a post in JftB is in this same forum as the original, but I've stuck it in its own thread. I'm not sure it will end up as 'Trading Psychology', but we're going to get off to a good start in that general direction.

jimbo57 said:
Aah Bushido - "The Way of the Warrior (or Samaurai)" depending which translation you wnt to take.

Wrap it up in Japanese and make it sound profound.
My intent in suggesting Bushido "encompassed it all" was in response to a valid, but narrower IMO, mention of Aikido.

While each cover both the mental and physiological aspects of training and development in a more holistic sense than many forms, Bushido is much wider in aspect.

Bushido provides guidelines for conduct, morals and social behaviour as well as the sense of personal responsibility, personal honour, self-reliance and service to others.

But, the main purpose of this response is to examine the following....

jimbo57 said:
Sounds like "Just in Time Inventories"...great idea in an inverted market, economic suicide (insert your preferred Japanese word) in a carry!
This fascinated me Jimbo - I don't understand your position. In financial trading terms an inverted market is where the short-term contract has a higher value than the further months. A carry market is the opposite? This doesn't seem to fit at all comfortably into the same sentence as JIT. Obviously I'm missing a nuance or two - or maybe a whole slab of education!

In a physical commodity and product industry, JIT makes incredibly good sense UNLESS the physical world equivalent of an inverted market existed. Quite the reverse to your example.

If you maintained an inventory of widgets and your supplier ships a pallet every 24 hours and that perfectly balances your inventory holding costs, production capability and scheduling requirements, the occurrence of an 'inverted market' in the physical world of widgets would not make JIT 'a great idea'. In that circumstance, you would have been better off holding a higher inventory. And this situation is very much a part of formal JIT theory and practise - not an anomaly or divergence from it.

Indeed, in the real world, that is precisely what manufacturers do. They look ahead in the market their suppliers provide and increase their inventories of products that are destined for a price increase. It's a fairly simple calculation to match the increased cost of holding excess inventory with reduction in overall product supply costs. They end up flat basically.

Of course, it's in the suppliers' interests too to let their customers know of planned increases in price so they can unload surplus inventory and hit their own sales targets!

Hey! I wonder if there's a parallel in the financial markets??? :LOL:

jimbo57 said:
The world moves on- the markets move on- we can all learn from history, but if we wait for it to replicate itself, we will be part of it. We should however always respect it!
Learning from the past makes a lot of sense, as does respecting it.

If the 'wait for it to replicate itself' was applied to market action, I'd agree to a large extent - depending upon your definition of replication. Chart patterns work - a lot of the time. Indicators work - some of the time. Market actions and the underlying basis of the collective result of individual traders' actions do lead to very high probability intuitions of future market behaviour based on past market behaviour. I do believe behaviour is replicated.

If the 'wait for it to replicate itself' was applied to Bushido I don't agree at all. Bushido is not an 'event'.

Bushido is a state of mind and is on-going. It's as valid today as it ever was. I'd go further and state that it's the more valuable today - certainly the more needed today - precisely because of its apparent absence.

Thought provoking post Jimbo - thanks.
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