Patrick McKenzie (patio11) is joined again by Ricki Heicklen to discuss the evolution of her trading education business, Arbor, one year after their first conversation. They dive deep into the pedagogy of trading, exploring how simulated markets teach concepts like adverse selection, team dynamics, and risk management through hands-on experience. Ricki shares war stories from the bootcamp trenches—infinite loop bugs that mirror Knight Capital's disaster, WiFi outages that create unexpected trading opportunities, and that the most successful trading teams often focus on internal team communication even more than trade execution or technical acumen.
See the full transcript:
https://www.complexsystemspodcast.com/think-like-a-trader-ricki-heicklen/
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[Patrick notes: Complex Systems now produces occasional video episodes.You can access them directly on YouTube: https://www.youtube.com/@patio11podcast. My kids inform me that I’m supposed to tell you to like and subscribe.]
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Links:
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Timestamps:
(00:00) Intro
(00:46) Ricki's journey from trading to teaching
(01:25) The birth of Arbor and first bootcamps
(03:32) Developing a trader's mindset
(05:53) Understanding heuristics in trading
(08:21) Adverse selection in everyday life
(15:40) Insights from teaching trading bootcamps
(21:07) Pedagogical approach: learning by doing
(32:00) Handling mistakes and learning opportunities
(36:17) Unplanned bugs and real-world lessons
(39:47) Learning from Knight Capital's bug
(40:24) Understanding exchange-side bugs
(43:10) Risk limits and strategy separation
(44:41) Importance of UI in trading bots
(46:53) The Madagascar button
(48:20) The big red button in manufacturing
(49:45) Simulated trading and information aggregation
(50:29) Sibling trading game explained
(53:24) Modeling and hidden information
(01:01:15) Trading behavior and market updates
(01:04:38) Real-world applications and lessons
(01:13:58) Surprises and market opportunities
(01:16:24) Pedagogical approaches in trading education
(01:17:08) Market dynamics and counterparty behavior
(01:17:53) Retail vs. institutional order flow
(01:19:23) Simplifying trading concepts for beginners
(01:21:27) Introducing market characters and their roles
(01:31:31) Team dynamics and communication in trading
(01:39:13) The importance of redundancy in trading systems
(01:47:52) Future of trading education and online classes
(01:53:47) Wrap
