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Antifragile is a term that has been coined by Nassim Taleb in his book, “Antifragile”. Silver chart price It refers to things or people that gain strength or grow from general disorder or chaos.

There are many people who are/or do this: They recover from job losses, death of loved ones and other catastrophic events in their lifetimes, to come out stronger than ever – and don’t even notice it but after the fact.

– “Flash Crashes” of May 10, 2010 and August 24, 2015 when US Stock indexes mysteriously “dumped” very quickly (only to swiftly recover in the same day or days after) and the wipeout of Knight Capital in August 2012, due to a “rogue algorithm” that generated a 440 million Dollar pre-tax loss sending them into bankruptcy.


Some current affairs include: The Mexican Peso Crisis of 2016/2017 and Euro at near parity levels to the US Dollar, being significant contributing factors Donald Trump’s election and the decision of the Federal Reserve to start steadily increasing interest rates.

Damocles was a courtier of King Dionysius II who greatly envied the king’s life of power and luxury. Australian dollar trend 2016 The king offers to let him try out holding the throne, so he can see for himself just how great it is. Stock market futures bloomberg At first Damocles revels in his newfound wealth and finery and relishes having servants administer to his every need. Malaysian ringgit to usd history But then Dionysus places a razor sharp sword — hanging only by a thin horse hair — directly over Damocles’ head.”

Making an analogy to the stock market, this fits like a glove to PASSIVE INVESTORS. Convert aed to usd Because they store all their wealth collectively in massive Mutual or Investment funds/ETFs.

And even though themselves are small as individuals they are not agile enough to survive but mostly to their LACK OF EDUCATION in Investing and Financial Markets. Aud to usd graph So, they are paralyzed in inaction or make a wrong move at the wrong time and -snap!- the sword falls down and kills them.

It’s all fine and dandy, sitting on the couch eating grapes and getting fanned by servants, passively investing, letting the “market tide” raise them and “surfing the wave”. World stock market futures bloomberg Mistakes are rare, because crashes come once in a while.

But the danger of the sword falling down their necks is always ever-present and latent, and even though they are aware of this, they choose to neglect it or worse, live in a constant state of fear and anxiety.

The resilient, or robust, don’t care if circumstances become volatile or disruptive (up to a point). Binary code to english They remain steady in times of both adversity and tranquility.

Taleb likens resiliency to the mythical Phoenix. Euro football scores The Phoenix, if you remember, is an immortal bird that dies by fire and is reborn from its ashes to its initial state. Stock market futures 2014 The Phoenix doesn’t get better or worse from its cyclical death and rebirth. Financial futures market It just stays the same. Call option definition Hence, resilient.

This reminds me specifically of Financial Institutions, Asset Managers, High Frequency traders and the like: They are active participants in markets but not necessarily as active investors but merely being intermediaries of customers who wish to invest and trade in them.

Whatever happens, they always win because they are market makers, they have systems that can buy and sell simultaneously and capture the difference between the bid and ask prices.

They also gain commissions or hidden fees from pushing products to customers that they wouldn’t buy for themselves and from Over the Counter deals that are not priced in a competitive market, for example Global Corporate/Sovereign Bonds, Structured Products etc. Ice futures europe trading hours They set the price and make you pay for it.

And if something goes wrong, they are “Too Big to Fail” and get bailed out by taxpayers, because the risk of them going bust is possibly higher than not rescuing them. Call and put options explained They are suddenly reborn from the ashes.

Taleb likens antifragility to the Hydra from Greek mythology. Dollar pound exchange rate graph The Hydra was a hideous multi-headed lizard monster. Exchange rate usd chf Whenever a hero cut off one of the Hydra’s heads, two would grow back in its place — the Hydra became stronger with adversity.

Our mistakes are small and benign because we “Trade Small, Trade Often”, so no one position in particular can wipe us out, unlike Passive Investors who are overweight stocks or bonds, or Financial Institutions that have rogue elements and exaggerated greed that set them up for self-destruction.

– Heuristics and built-in redundancies: We have pre-planned responses as traders regarding what a position or a portfolio might do- this may include rolling positions, going inverted in the case of strangles, delta hedging, etc. Exchange rate rm to usd And all of these have been properly evaluated with statistical studies and when they should be employed. Text editor for windows 10 Knowing what to do next and staying mechanical increases your odds of success.

– Never take advice from someone who doesn’t have skin in the game: Another quote from Warren Buffett: Wall Street is the only place where people who take the subway to work advise those who ride a limousine.

– Keep your options open: This is almost self-explanatory in the case of trading: Options give us the much needed flexibility to adjust a trade to our needs and this gives us higher probability of profits. Xau usd chart live Also, undefined risk strategies, while scary to many, can give the much needed flexibility to deal with any case scenario and make adjustments if things don’t go as planned. Exchange rate usd nzd They are not however the end-all, be-all of a portfolio. Us future stock market Be careful.

As individual, retail investors we can choose not to be fragile and weak like Damocles or be in an eternal karmic-cycle of death and rebirth of the Phoenix but rather become antifragile like the Hydra – they can cut one head off (lose one trade) but since odds are on our side, the more we trade, the more heads (winning trades) we will grow.

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