Accuracy Paradox

Monkster
3 min readNov 15, 2021

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I was talking to my high scoring studious niece some time back, trying to explain the difference between scoring at school vs solving difficult problems. She has been obsessed with scoring just like I was, which is a good way to impress your teachers and parents (most of them if not all) but a recipe for disaster for your mental peace and of little value to your long term learning or even career. It may teach you to be compliant and ace every situation you are in, but at some point this model breaks, also, the positives of this model come at a considerable cost which is your actual learning and general chill in life.

The way I explained her the on value of scoring was that, a usual school test is a series of problems with average difficulty and beyond a point it is testing your ability to be precise and accurate over a long period, and over a large number of mundane problems. At least that is the case for her, given she can probably solve everything but will lose some marks owing to silly mistakes. While it may be good to find out why the silly mistakes are happening and fix the root cause if there is some value in fixing it. If it is fatigue of 3 hours, getting bored of the similar kind of problems, see if it is of much value to fix it. It will have some value in cracking exams all through, but more important in many exams that matter will be the ability to get through more difficult problems than a large number of average ones and winning on accuracy at the cost of depth may not necessarily be a good trade off.

A completely tangential conversation with friends happened, where I got badly trolled for a position took (or rather didn’t take) on a particular stock that did well (as opposed to my stand of it being overpriced). My ego is defending it in my own head that it was operator play and may be it was, but that is not the point. The point is, this inaccuracy cost me 1 lost opportunity, and there are probably 100 (literally not figuratively) more such opportunities, that I have available which I can still make money off. So, all in all, it is a completely ignorable episode in my trading journey, but the level of discussion around this in my small and amateurish trading circle was overwhelming. Given how we are trained during our education, we are trained to be right every time, we deal with certainties more than probabilities.

In trading, this mindset is very detrimental, if every missed opportunity, or a bad trade sets you off emotionally, you will not make money and most likely die early as a result of trading. An accuracy of little over 50% is more than enough to generate infinite wealth and hence aiming for that 99% which we did in our school days is actually an anti-pattern rather than a feature

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Monkster
Monkster

Written by Monkster

Leading a non linear and a non ideal life. I think my quest is to find and internalize the nothingness and meaninglessness of life while having a rocking life

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