Jeff Bezos' 70% Rule For Trading

I was listening to a recent interview with Jeff Bezos on Lex Fridman’s podcast.

And I got a bit inspired to do some more digging on Jeff.

Apart from being genuinely curious about the guy, I’m always on the lookout for tactics and ideas that can be taken from other endeavours and used in trading.

“What can I learn from Jeff that can be applied to trading?”

I found this…

Jeff’s 70% decision rule.

He believes that having 70% of the information is enough to make decisions.

And by waiting for 90% or more makes you slow and can cause you to miss opportunities.

Hmm, alright so how does that relate to trading?

Well of course there are a lot of differences between pulling the trigger on a trade vs pivoting a billion-dollar business from books to Alexa’s… But there are some similarities too.

As traders, the more information we get to support the decision, usually the worse the actual decision.

What do I mean?

If we wait for a bounce to happen before getting long, there’s a good chance price is going to pull back once more.

Whereas if we commit early, then we can profit from being one of the first to commit.

70% of the information might be

1. A strong area of support
2. A rotational type market condition
3. A time of day when rotational and trend changes are expected

We don’t always need to see it bounce or rally.

Nor do we need to wait for correlated markets to signal a buy.

Sometimes committing when we have the major filters checked is the right trade. Waiting for more signals to confirm the trade can mean we are too late.

Not always of course, but definitely something to consider.

70% is enough.