Complex Systems with Patrick McKenzie (patio11) How the Smart Money teaches trading with Ricki Heicklen
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Jul 11, 2024 Ricki Heicklen, a former US equities trader at Jane Street Capital, shares her innovative teaching methods for trading. She discusses the unique challenges of learning trading, emphasizing the importance of understanding adverse selection and market dynamics. Ricki advocates for practical examples to demystify trading mechanics, while also addressing the critical role of liquidity and its impact on costs. She delves into cybersecurity in trading and the need for a security mindset, highlighting how information risks can affect traders' success.
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Adverse Selection
- Consider adverse selection: when trading, the trade might be worse than initially anticipated.
- The willingness of someone to trade with you should make you adjust your model.
Classroom Trading Game
- Ricki Heicklen uses a classroom trading game with a contract based on siblings.
- Students trade on this contract, learning order books and private information's impact.
Reacting to New Information
- When new information arrives, clear stale orders, even if unsure of their status.
- Then, act on the new information's direction in the market.
