Automated Trading And Lenny Dykstra
I have always been a Lenny Dykstra fan.
I was a Lenny Dykstra fan and I didn’t really like the Mets. (I liked him more when he played for the Phillies.)
He was just an old school player, right? Cut from the same pinstripe as a Babe Ruth or a Ty Cobb.
When I found out that Lenny was an investor and trader, I became even more of a fan and enjoyed some of the articles that he wrote for the Street.com. Lenny, it seems, wasn’t just a guy who could cipher batting averages or ERAs, he had a grasp of more esoteric investing, like deep-in-the-money option plays.
Needless to say, I found no joy when I heard that Lenny went bankrupt. What went wrong?
In a word, Lenny was human. And he also had some inner demons, like plenty of other traders and investors out there. He also became involved in some pretty crazy business deals.
Reading some of his articles, he sounded like he was preaching to potential converts, rather than accurately analyzing financial situations. This zeal can lead traders to taking risky exposures in positions that have long odds of succeeding. If you’re a “deep-in-the-money guy,” you’ll take a deep-in-the-money position, no matter what. It’s just like the batter who always goes after the risky low and away pitch and knocks it out of the park. Until pitchers get wise.
It wasn’t a human pitcher who got wise to Dykstra’s tendencies; it was the market that pulled a change-up and stopped throwing pitches Dykstra liked. But he kept swinging.
Situations like Dykstra’s makes Automated Trading more appealing. It takes out the human element–the overzealous streak, the pride, and risk for risk sake–from trading.
Maybe traders won’t rely totally on Automated Trading. They enjoy the game. That’s okay. They can continue to trade. But, even for hardcore traders, using Automated Trading systems can help “hedge” their human side.
It might be that all Lenny needed was a Automated Trading designated hitter.
Related posts:
- How To Know If Automated Trading Is For You
- Why Automated Trading And Manual Trading Are Compatible
- Automated Trading and Artificial Intelligence
- Automated Trading and Futures
- Automated Trading and Options
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is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
