Superforecasting (Philip E. Tetlock, Dan Gardner)

Trader's Library #57 · Risk, chance and decisions. How to forecast better: in percentages, with humility and keeping score.

Author: Philip E. Tetlock, Dan Gardner · Original: Superforecasting · Year: 2015 · Usefulness for traders: ★★★★☆

What it's about

The results of a research project in which ordinary people predicted geopolitical events better than intelligence analysts. The authors describe the traits of “superforecasters”: probabilistic thinking, frequent updating, humility and breaking problems into parts. Gardner also wrote “How Big Things Get Done” (with Bent Flyvbjerg).

What it gives a trader

For a trader it's a manual for building scenarios: in percentages, with clear conditions, updated with new data and with your accuracy tracked. That's exactly how to approach pre-session scenarios.

Lessons for traders

• think in probabilities, not in “definitely” and “never”
• update your forecast in small steps as new data comes in
• keep score of your forecasts: calibration requires a record (overconfidence, Atlas of biases #11)

What to watch out for

The main author and researcher is Philip Tetlock; Gardner is the co-author. “How Big Things Get Done” isn't about markets.

Discussion

The discussion takes place in Hetman Capital Club (in Polish). Join the discussion in the Club →

Navigation

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Educational content, not investment advice. The book description is my own summary and assessment, not quotations. Edition details were checked in catalogues and bookshops, and where there was doubt I said so plainly.