Over the next few days I noticed from block to block, neighborhood to neighborhood the same scene unfolding like some apocalyptic paragraph in a science fiction novel as spider webs clung from the most awkward and daring spaces. I found myself entranced watching the mechanical precision of the spider dance, occasionally adrift and flowing from the improvisational wind or furiously interconnecting strands. As I continued to be marveled I suddenly remarked to myself, “There's a trading lesson here.”
Until this time I had been focused upon looking for resolution of trading issues through trading literature but I instantly understood after taking a moment to simply observe what is actually happening around me that not all trading problems have trading related solutions. If I sought to improve I should not expect to find answers from trading books alone but branch out into other forms of literature as well and reacquaint myself with some of the protagonist gathering dust on the shelves in proportion to the cob webs in my mind; and that I should also incorporate in my discovery process the simple query to experiences from this point forward and ask myself if there is a trading lesson here.
Over a couple of days I jotted down some notes in a journal to follow up on and the following concepts began to formalize.
1) Know Your Cadence
The spiders did not magically appear, they were simply more obvious as Summer edged into Autumn and the older females, now plump with eggs stood out as many wove their final webs before dropping off into the Fall leaves to lay the next generation before their life cycle ended. This crystalized the concept of market cycles and learning which are more conducive to my style of trading than others and to focus upon my rhythm and when it is in step with the market.
This information was not new to me, but my clarity and understanding of this improved because from observation of a natural phenomena I was able to articulate a concept in my terms and from a perspective that is in tune with my way of approaching understanding and knowledge.
2) Do One Thing Well
Spiders are specialist and their expertise is weaving. Their web is critical to their survival and prosperity. Once the web is constructed the spider is dead center and nearly motionless except the occasional twitch of the forelegs- probing for information.
This crystalized the point that one set up is enough to survive in the market and prosper. When one understands their set up innately then it simple becomes a matter of sitting and waiting and probing for information and when the set up triggers like a twitching fly, it's merely a matter of execution.
3) Resiliency
Everything can be aligned: in harmony with one's cadence in the market, a defined set up with an edge, execution of an entry signal with accepted risk parameters, but things will not always work out as expected. This began to hit home when I saw one web was crowded by a much large web in front and pondered the repercussions of the larger web netting all the insects first. Adjacent was a web that was half destroyed and the energy being spent to patch the damage made me think about my comfort zone and how much of my account size I should risk on a position.
As witnessed, simply achieving an innate level of proficiency and expertise does not mean there are not hazards that can occur at any moment such as one's entry signal may be a larger traders exit moving price to stop level immediately, or slippage may skew the risk/reward, or an overnight news related event knocks price down 15% before you can blink. No matter how skilled, not everything works.
All three of these concepts were known to me at the time, but not internalized. There was a gap between my knowledge and acceptance of what it meant. I had yet to develop the thinking process required for success and lacked the ability to filter and process information constructively from the traders point of view. This takes experiences over time to hone, but that doesn't mean the learning curve can't be expedited.
One insight I gathered from this exercise is the realization that it is important to define things in a manner that makes sense to me and one way in which I've been able to do this is through allegory. Another exercise is looking for creative ways to filter trading thoughts and ideas through another medium and seeing what I can find relation to, such as changing words in a paragraph of literature. Learning to trade involves processing a substantial amount of information and it becomes difficult at times to understand what should stick and one tool I now use to sieve information that I find valuable is to remove it from a trading context entirely, particularly if it is a concept I am frustrated with as this consumes time and energy that is better used elsewhere.
Well written.
ReplyDeleteIt is interesting to know that we can learn a lot from nature. In fact, my mentor suggested to me that we can learn a lot from the ants, the bees, and a pile of sands about the markets. They all can be seen as Complex Adaptive System (CAS).
Learning from nature is an underused practice. I spent two years living in the Sierras and became aware of a sense of time that no clock or calendar could represent. I learned to discern seasons and time of day by which insects, birds, reptiles, flowers etc. were active or dormant. This rhythm exists in markets too.
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