Our friend, the now Dr. Elise Payzan LeNestour is finishing her research project and she has a startling result - we can be amazingly "rational" in an uncertain environment... with one caveat - we have to be on the lookout for uncertainty ALL of the time! ... i.e. AWARENESS.

Now the problem with this is that the rhythm of market personality changes, changes... i.e. in her game, you knew you had X amount of time and that changes were going to happen often. The markets are similar - but different. So while you can get good at reacting to change (if you work at awareness) that also conflicts with the idea that you need a baseline strategy and can't be constantly changing it because "it is different this time". With that approach, as you know, you won't know which way is up!

Now of course, behavioral research says that on the whole we do not make that particular mistake. We most often assume that tomorrow is like yesterday - or we just aren't standing ready for change.

This makes the trick one of getting comfortable with total uncertainty while being on the lookout simultaneously for change and for things to stay the same. This is no small feat!

It is another reason to manage first to Psych Cap - i.e. avoid making any risk decisions if you are tired. If you are aggravated or in the grips of a strong feeling, ask yourself how you will feel in the future if you do X ... this last one, is a real "tip and trick" ... because if you can put yourself in the place of your FUTURE feelings... (while guarding for the fear of regret mind you) ... you will be on the road to the "holy grail" of consistently better risk and reward assessments... the fuel of trading profits.

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