You can't change the weather

I just came across this line in a good novel I'm reading, "Brooklyn Follies" by Paul Auster. And it struck me as a worthwhile axiom for forex trading as well as lots of other things in life. The best a trader can hope for is not to take the "weather" in the markets personally, and instead adapt tactics and strategy to the current conditions. Carry an umbrella. Avoid puddles. Try not to get splashed by passing cars. Don't get greedy. Use your leverage wisely. Don't trade when it's really weird and nasty out there. That kind of thing.

This quote also got me curious about weather forecasting and how it might compare with market forecasting. They have more in common than you might think:

"Components of a modern weather forecasting system include:

• Data collection
• Data assimilation
• Numerical weather prediction
• Model output post-processing
• Forecast presentation to end-user"

"During the data assimilation process, information gained from the observations is used in conjunction with a numerical model's most recent forecast for the time that observations were made (since this contains information from previous observations) to produce the meteorological analysis. This is the best estimate of the current state of the atmosphere."

All this is from the Wikipedia article on weather forecasting. Worth a read if you find the weather remotely interesting and want to compare/contrast how its forecasters try to predict the future with all the tools and techniques used by traders. I suspect the meteorologists get it right a lot more often than market analysts.

(OK, maybe you personally can change the weather and just aren't telling anyone. In which case, I'll just hope you stay in a good mood.)

**name that Simpsons episode**