Individual Brilliance And Trading Pairs 23rd July 2017.
It was the weekend and I was doing some of my most favourite things- analysing and listening to music. I find analysis flows ever so smoothly while some nice music is on! This time I was watching a video (in between analysis) and this was a Montreux Jazz Festival and on screen were two absolute legends of Blues- Gary Moore and BB King. They were doing an act together that was so superb, so sublime and so much in sync that it transports you into a different realm all together! There is something so magical in seeing two consummate artistes play together that the music takes on a different sound! Think of great combinations in any music. Kishore Kumar with RD Burman or SD Burman. Rafi with Naushad. Zakir Hussain on table with….well almost anybody! Shivamani with Rahman. Shakti with John Mclaughlin. Ian Gillan with Deep Purple. The list is so big that I could go on and on! The beauty of all these pairs was the great coordination that they managed to achieve even when they were playing live. In fact their jamming sessions were among the best. I was recently witness to a jam session of Indian jazz fusion with Shivamani, Mandolin Rajesh, Stephen Devassi and Selva Ganesh. What a treat!
Now, musical genius is an individual achievement and for two great artistes to come together and actually enhance the other’s performance makes the produce not a sum of two but a multiple of two! And the most beautiful thing about such combinations is the fantastic fun that artistes themselves have while they are at it. Have you noticed that they are always smiling and enjoying not only their own work but also of their colleagues? It is a wonder to behold and adds to your own enjoyment.
Trading pairs is excellence is also an individual achievement. Is it possible that two good traders coming together can produce a much more enhanced result? Ideally they should, right? But truth is otherwise, I would think.
Many times people want to trade in pairs or groups. While this may appear to be a doable idea theoretically, in practice, however, it is not. One of the main reasons is that while there may be agreement on entry, there is, often, quite a disagreement when it comes to stops and exits. Everyone is unique in their expectations of returns and perceptions and tolerance for risks. Thus, group trading is often a tricky endeavour. This also becomes a problem when active market players seek out advisors to trade for them. Again, in theory, it appears very doable. The advisor apparently is doing a good job and hence why not make it work for you, goes the reasoning. But the real deal is the kind of temperament match that the two people- the client and the advisor- share that will decide how successful this venture shall be.
Musicians, when they come together, are uniting to produce something for the enjoyment of their audience. Their own joy lies in creating that atmosphere, that joy among their listeners and fans. Traders on the other hand exist purely to enhance their own joy and could not really be bothered about what is in there for others. Maybe that is a bigger reason why traders are unable to operate in pairs or groups? When an endeavour is too individualistically oriented, there is no common rule ground being followed. Musicians playing together have to necessarily to adhere to the scale or notes or raga or taal. Within that restriction they may show their individual brilliance but they never move out of that boundary. If they did, it would become cacophony and not melody. Traders cutting and following their own path may not be seeking to keep together as the individuality quotient may be too large here to ever produce harmony for trading pairs
Even in sport combinations produce good results. Batting pairs (especially openers) bowling twins (both fast bowlers and spinners), doubles partners (so many legendary ones), forwards in Football etc. etc. Again, here there is a common goal that is beyond the individual goals. The brilliance therefore comes within the context of the overall goal of the team.
So perhaps therein lies the secret. The way to get traders to pool in their talents is to create something larger where their individual interests are transcended. The various trade desks that exist still work on the basis of individual performances. Maybe it is time to think of something larger so that two traders working together make 22 rather than add up to just 4.