Moscow Rules - Good for traders

 

With all the current tensions surrounding Ukraine and Russia, it is clear the Cold War is back. Perhaps it never ended. That older period reminds me of the rules that CIA operatives employed when stationed in Moscow. Their tradecraft was known as the "Moscow Rules" and is the staple of many spy movies. 

Here are the Moscow Rules from a CIA operative who lived in that most dangerous city during the Cold War: 

• Assume nothing.
• Never go against your gut.
• Everyone is potentially under opposition control.
• Don't look back; you are never completely alone.
• Go with the flow, blend in.
• Vary your pattern and stay within your cover.
• Lull them into a sense of complacency.
• Don't harass the opposition.
• Pick the time and place for action.
• Keep your options open.

If you look at the rules closely, you could say that they would be appropriate to follow if you are a trader. You can still have a quant strategy but follow the Moscow rules with your trading and business behavior. Nothing wrong with having good relations with competitors and the street, but always remember that everyone is looking for an edge.

There is no question that brokers, competitors, and quants all want your information to pattern your behavior and front-run your activities. Your flow data is important. Wy do you think firms pay for it? Looking for patterns with big and or smart traders is critical if you are on the other side of the market, and you don't want to be picked-off or steam-rolled. 

The Moscow Rules are just another variation of the great book Only the Paranoid Survive by Andy Grove of Intel. That book was published in 1994, yet it is still fresh. Andy Grove focuses on the day that big changes arrive. Moscow Rules focuses on the tactics to be ready for the daily challenges in a competitive market.