The most powerful trading lesson I received
Shown below is a trader's tweet on performance.
Please read the trader's comments and ask yourself, is the trader acting based on expecting what that market should do?
The collective intelligence of millions of traders, including traders trading sufficient size to move markets and market makers who make the price, determines moment-to-moment pricing in financial markets.
Individuals having a view on what the market will do are essentially saying they are equal to the collective intelligence described above. That's pure insanity.
So how should you approach trading then?
My most powerful trading lesson came from Ashtanga Yoga practitioner Peter Sanson while relating to a posture he has completed successfully daily for over thirty years.
Whether practising the primary, intermediate or any of the four advanced series of Ashtanga, all begin with "Sun Salutations", the first of which involves reaching to the sky followed by folding forward from the hips while keeping your legs straight until reaching your limit, and ultimately reaching the ground.
It's important to note that with regular practice, reaching the ground is achieved reasonably quickly. So if you could reach the ground last week, surely you'll continue to reach the ground this week and so on?
Peter explained that regardless of the literally thousands of times he has previously successfully "touched his toes", he is guided only by moment-to-moment feedback from his body as to how far he can bend forward. His mastery of Ashtanga is his complete absence of expecting in advance to what degree he will complete each posture within his practice.
How do you apply this to trading?
When a trader is listening to everything the market is saying, in every moment, this completely consumes mental capacity, leaving no mental space for developing a personal view of what the market will do. Anytime a view re-surfaces (refer to lifelong practice below), it is simply your self providing feedback you are not entirely occupied by listening to the market and engrossed in your trading process.
Few traders come to markets already wired to view every future moment as unknown. Therefore many practice yoga (Paul Tudor Jones practices Ashtanga), meditation or similar to shift their approach from thinking they can influence the result (my big brain knows this trade will do xyz) to surrender to a process. Because this goes against what is ingrained deeply throughout the entire western lifestyle, it's a lifelong practice.
This picture hangs in my office as a reminder to stick to the process
Note:
I trade just one market, yet this completely consumes my attention because, via eight monitors, I constantly monitor market pace, market themes, time and sales, DOM, context, footprint charts, long/short inventory ratios, all while determining the dominance of outside versus inside participation, tactics of other players and so on.
see the full list of skills used to fully comprehend what the market is communicating
Update: A follow up post including live trading footage narrating what the market is communicating is available here