- Trading

Written by Michael Bigger. Follow me on Twitter.

Here is what I learned about creativity and trading from Steve Johnson's video "Where Good Ideas Come From."

Where Good Ideas Come From: The Natural History of Innovation (Amazon Link)

Pay attention to your slow hunches.
Increase your connectedness.
Create your own spaces where ideas can mingle.
Invite others to join the discussion.
Promote the collision of hunches.
Look for (listen) and borrow the missing piece.
Share your ideas.
Mash up other people's trading methods with your own system.

Here is an example of how we combined two hunches to build one of our algorithmic trading strategies: When I first sat down to create our trading system, I thought I wanted to exploit single-stock fluctuations. I was not sure how to go about it. I was stuck. I was listening, though—listening to my trading beliefs, other successful traders, and hedge fund customers. One afternoon, I was spending time with Alex Perelberg, an accomplished trader and a colleague, when I stumbled onto the insight that completed my puzzle. I listened to what Alex had to say about how he trades, and it hit me between the eyes. With this insight in hand, I started building our system, and it worked beautifully.

Anything else you learned from this video?

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