The Tao of Trading the Markets - Episode 1 - Seven Steps for the Novice Trader
I’m inaugurating my new trading series with this post. I will explain how trading can be done using the ancient philosophy of Taoism.
We already have the Tao of Physics, a great book by Fritjof Capra (which I recommend) and the Tao of Programming which is also a great read.
image from taoofsurvival.com
A journey of a thousand miles must begin with a single step
Lao Tzu
So, what is the first thing to know when trading?
Step 1
Trading is an Art
Everything is uncertain, nothing is guaranteed!
There is no indicator, set of indicators, strategy or algorithm that will work 100% of the times.
If you found the Perfect Method, please stop reading and come back later when you'll discover it has failed too.
Step 2
Don’t try to predict the market, just become the market
The idea that you and the market are separate entities is just an illusion: in trading the market, you are just fighting against yourself.
When you become the market, everything gets clear and simple: you want what the market wants and you’re in peace.
Market can’t be predicted, it’s like a erratic cat hanging around, you can’t tell where he will be in a few minutes.
Step 3
The main goal is to stay alive
A trader is like a warrior, fighting hundreds battles every day; his main purpose is to remain alive every time.
Becoming honored and famous for his battles must not be his purpose.
(When the trader loses all his capital, he dies.)
Step 4
You can win a battle without a strategy, but you can’t win the War
If you don’t have a strong, consistent strategy for your trades, you may be successful sometimes, but in the long run you will not prevail.
You need a valid strategy BEFORE your start your trading.
When you become disciplined and start strictly following your strategy, your trading will improve,
Step 5
The Yin and Yang of Trading
Profits and losses are the Yin and Yang, the counterposed aspects of trading.
There are no profits without losses, so you need to accept losses if you want profits.
When you lose, you’re building your experience to lose less frequently in the future.
Step 6
Focus on Loss, not Profit
It’s easy to win when you’re lucky enough to catch the right wave.
But it’s hard to limit losses when the market goes against you.
Your strategy will be focused on accepting small losses as normal, but avoiding the big ones.
Step 7
Experience has a cost
To become an experienced trader, you need to pay experience with money AND time.
Try paying with time, more than with money.
Or, if you have few time but lots of money, pay it with money.
Hope this is interesting to you, please leave your feedback, resteem and follow me @andrew0
Ciao Andrea! Abbiamo fatto un piccolo gruppo di Italiani su FB , se ci sei e ti va ci farebbe piacere avere i tuoi preziosi contributi...
Grazie mille, ma a dire il vero non uso Fb (altrimenti perchè dovrei stare su Steemit?) - in ogni caso mi trovate su steemit.chat con nome utente andrew0 :)
Nice points, there was a guy doing a breakdown of the sun tzu, I'm guessing most of the principles can be rearranged to fit the market :) The book of changes is a interesting read I've heard :)
I'm off to check the Tao of programming, since there is more stability and I guess I need to get income from somewhere since trading time doesn't give you more of it :|
Cheers mate, following, also since I got here fro the Post Promotion chat, I'm inviting you to my blog, currently the trend is Steemit and some improvements on the Interface side of things.
The past posts are on my life views and philosophy, but the nice parts are too few and in the beginning. For now I'm focusing on clearing my head from all the flaagg drama here, then I might get back to my Tao of life posts :), Play Train and Trade maybe :) nice daily routine, at least it sound like it :)
If you trade, play music or just live your life, many philosophical principles apply.
This happens even if you are materialist or nihilist, which are still philosophical approaches to reality.
About the Tao Te Ching, I think is a huge work, but we need to understand what it really means.
The book of changes, or the I-Ching, is an ancient book used for divination but it has many interesting things, including the first version of binary code, before computers.
I will write more posts like this one, I'm so happy this stuff created some interest and managed to get some feedback :)
Following too
Cheers and SteemOn!
I am a new trader myself, about 2 months now, and I recognize what you are talking about.
When I first started I thought it was mostly luck, but the more I learn the more I discover that their is also skill involved.
For sure you have to be a warrior and have a strong heart lol!
I started with a fixed amount of money and refused to add any more to my account. I decided that this money is already gone, and so what I have to play/battle with, is all I will ever play with. If I lose everything then I will just have to accept I am a failed trader and move on to other things.
But at least I will have learned something from the experience. And hey, it is so exciting.
So far I am down 8% So I am still surviving.
I love this post.
Thank you so much for your feedback, Arthur!
Trading is a difficult art and requires many skills, it's simple but not easy.
It's great to start with a fixed amount of money and never add more (on the contrary, it's very wise to remove the earned money from the trading account to protect it from future losses).
Also knowing that the money in the trading account is already gone is a wise attitude: many people invest too much money thinking they will be able to take it back easily.
The great thing about trading is that always teaches you something about life and about yourself and your weaknesses.
Very happy you liked the post, stay tuned for more posts on the same topic :)
I dont think there are many on Steemit Andrew who write about this, not that I have seen anyway.
There are a few who write about Crytpo but not about trading in particular.
Been waiting for someone to find this niche.
Really look forward to seeing you post more on this subject.
So glad I followed you now 😃
I tried to write some other post, months ago, about trading, but didn't find any interest from the community, so I quit for a while.
Maybe using a more philosophical approach to the topic can make it more interesting, so I will keep writing about that for sure!
PS I am a novice trader too (and currently losing a little bit too), don't think to be better than others, I just try to give some suggestions and be useful, in a very humble way :)