Dao of Trading

[martyschwartz]

Karma is talking about more subtle cause and effect that are so far apart in time (lifetimes) and space that you can't connect the dots so it confuses more than teaches. For example: people thought they got rewarded for doing bad things.

Interestingly William Eckhardt also mentioned how the market teaches "bad" trading by confusing the traders into doing what's comfortable.

 

[Swang]

Karma always teaches, be you conscious of it or not, many of the more important lessons are planted like seeds and germinate in the subconscious, karma is elegant, karma is perfect action.... and karma can hardly be held responsible for the confusion of the flawed vehicle

 

[Simon Gordon]

My disbelief in Karma stopped me from becoming a Buddhist.

I do not believe in God and thus I am not a Christian.

Buddhism has many beautiful teachings but Karma halted my deeper path.

I like the Tao as it does not ask you to believe in something - it just is.

Simple, and it does not contradict logic, as religion in my opinion forces you to - to make the leap of faith and thus suspend logic.

As I have aged, I am drawn more towards Empiricism that is mixed with a bit of Nietzsche and a good dollop of Epicurus.

I am a melange!!

I think the Tao and Epicurus are a marriage made in heaven, with good old Nietzsche extolling me to be the best I can - too strive - too succeed - too conquer. BRAVO

I am a trader I will win - I am not a loser. My unconscious is solid and growing. It is me!!!!

 

[Simon Gordon]

All things will come to the man who is at one with the Dao. For they can feel and find in him peace, tranquility and enlightenment. People know the taste and smell of good food and the sound of music. But knowing a description of the Dao is beyond comprehension. It seems without flavour or sound. For it cannot be seen or heard and yet it is the very source of everything.

Lau Tzu

 

[martyschwartz]

Simon, whether you like karma or not... it is not gonna change whether there is karma or not. I think nowadays they use "karma" as a loose term for cause and effect. It is cause and effect but it is more subtle than what we see in the conventional sense... People strive for easy explaination that others can relate to. I doubt anyone can see how karma works other than the Buddhas and Bodhisattvas. If we see "karma" then it is probably not karma. So I don't think you dislike karma because most of us can't even see it (They usually span lifetimes). On the contrary, what you dislike might be the conventional easy explanation of what karma is.

 

[Simon Gordon]

Marty - I did not dislike Karma, I just do not believe in it.

 

[martyschwartz]

Marty - I did not dislike Karma, I just do not believe in it.

Sorry, I might be talking about myself. The good thing is like you said... it's a grand buffet. Let's eat!

 

[Swang]

I think the Tao and Epicurus are a marriage made in heaven, with good old Nietzsche extolling me to be the best I can - too strive - too succeed - too conquer. BRAVO

He went insane... and he didn't even trade

 

[Simon Gordon]

He went insane and he was never a trader but :

'The superman is one: whose self mastery yields an abundance of power to create; who exercises the master privilege of the free spirit - living experimentally; who bids farewell to the reverences of youth and who stands apart from the views and values of the the herd; who reverences enemies as allies; who knows how to forget and recuperate from the blows of life; who shakes off with a single shrug the vermin that eat deeply into others; whose overflowing plenitude and gratitude cleanse both body and spirit of all guilt and all ressentiment; who percieves that "body" and "spirit" are two names for a single mystery; who calls humankind to return to its true home, the Earth; whose every muscle quivers with a proud consciousness of truly free will and a sovereign individuality that "no longer flows out into a God"; who realizes that creative individuality is indeed the Earth's goal and humanity's hope; who, without metaphysical consolations, affirms life not only in its joy but in all its horror and who, thereby, conquers nihilism".

He can teach traders a great deal!

 

[Swang]

The superman is another symbol for the true self, every philosophy contains this archetype, psychology calls it the self, even christianity has confused the higher self with their holy guardian angel, one of the best books on this subject is the wisdom of the overself by dr paul brunton

 

[Simon Gordon]

PAYPOINT

How can the Tao assist me as I digest this trade?

I started researching the stock on Wednesday and bought some within the NMS (10,000) on Thursday.

On Friday I decided to go in and buy above NMS but as I went in, other buyers where circling and I was offered a price of 2.31 when it was 2.18. I was thrown off balance by this wide disparity - as in my mind I had a figure of 2.20 - and I told my broker I would phone him back in 15 minutes. He called me 10 minutes later to say the price was going up - it stopped at 2.36. Then as the day went on buys for over 1m came on the screen, on a stock that had been dormant for weeks.

I was happy I had made some profit but dazed by what had happened.

Over the weekend I continued to ruminate and decided it was still good value, so on Monday I went in for more but I could not get all I wanted and paid 2.38 for what I could get. I tried again, today, but again there was a short supply of stock. The price moved to 2.44 and I bought some more within the NMS and then it went to 2.51.

Today, I feel angry and a failure because I was not decisive enough and I let the price drift away and thus let juicy profits escape my bottom line. I feel sour towards myself.

I think I was affected by a recent trade where I bought in quickly, then after deeper research and a call to a fund manager in NY I sold the shares; it went onto half, in due course.

So this time I thought I will be a bit slower and triple check my facts and thus not rush.

If I had bought on Thursday I would now be well pleased with myself.

If I had been decisive I should have taken 2.31.

Maybe I should have been a continuous buyer at NMS and built my holding that way when I realised the stock was in short supply. I had never come across this situation before. Now I am wiser.

How can the Tao teach me to handle this?

Marty - have you got a suitable paragraph?

As to PayPoint I think:

2.18 - good value.

2.50 - reasonable value.

2.75 - fair value.

3.00 - popular value.

 

[Simon Gordon]

In hindsight I was dealing through my broker and not direct with the dealing desk. Thus I was not plugged directly into the market and white noise was interfering with my decision making process. I think I would have executed better if I talked directly with the dealing desk. It would have been more immediate.

Fortunately I have recently found a pension provider who gives access to a dealing desk and at a more cost effective rate.

This has taught me I have to move to this new provider.

A stockbroker gets in the way of the flow.

 

[Simon Gordon]

From the book Bull by Maggie Mahar:

The problem is that much of the information that investors want - and think they need - is just that, "information," not knowledge. Knowledge comes only through time. It dawns on us gradually, as we digest bits of information, reflect on them, and rearrange them, revising and refining our interpretation.

The critical process of analyzing that stream of imperfect information, sorting out what is relevant, checking the accuracy of the facts, and then synthesizing the bits of data into a meaningful context is labor intensive.

 

[martyschwartz]

Hi Simon,

We are doing very different things so I can't think of what to say. But here is what happened to me today. My system missed two trades that I would have put on if I trade by discretion. One of them is almost marginal so I don't care too much about. The other one looks like a great trade. I have a choice to tweak my parameter so that I can catch the trade. But then my longer term performance may suffer since the new parameter seems to perform worse than my original over time. Or how about trading the new and old parameters as two different systems (almost like scaling in)? That does not make sense either since on average it would be worse than just trading my old parameter alone over the long run. So my final decision is to let go of the idea of catching all the trades. It might sound stupid and too rigid but I want to stick with my plan which is in place before the trade. Once I am in a trade, I lost clarity. I should probably spend the time researching the "next" system idea instead of fixing something not broken. So the only thing we can do is "plan ahead" and hindsight can be confusing sometimes.

 

[chump]

Simon,
Can't tell you how the Dao would help you , but here is what I do... I just don't use the word "should" with hindsight (poison pill restricted to must be rocket scientists)... rather I use the word WOULD with foresight based on experience...subtle ,but all important difference ..one attempts to be objective ..the other is personally subjective...

 

[chump]

Simon,
Can't tell you how the Dao would help you , but here is what I do... I just don't use the word "should" with hindsight (poison pill restricted to must be rocket scientists)... rather I use the word WOULD with foresight based on experience...subtle ,but all important difference ..one attempts to be objective ..the other is personally subjective (LOL my old English teacher would have fund with that one)...

 

[Simon Gordon]

Clump - you are right. At the moment I am processing my emotions, after a few more days I will be more objective and be able to accept this trade as a learning process, which will add more profit to my bottom line.

From Zen in the Markets:

...remember that you are in a contest with yourself and not the market.

...the market is our teacher, and it pays to listen.

In the businesss of the market, the here and now is all that there is. The future is now, the past is forgotten, and we focus on the present moment.

The perfect master is the market itself. The market speaks to us in one language - price.

Some people are smart enough to know they don't have it and stay away from the market. Others play the market and find out the hard way what's required. If they have the fortitude and willingness to learn from their mistakes, they might make it. Luck can carry you only so far. Eventually the market weeds out those who rely on luck to survive.

 

[Simon Gordon]

From Way of the Warrior Trader:

It has been my experience that, although grief is a natural reaction to loss, the intensity and duration of that grief are directly dependent upon the perceptions and mental discipline of the experiencer. Even if someone has "accepted all possible losses before entering battle," he will still most likely experience some degree of grief over a loss. And that's not necessarily bad. But there is a big difference between short-term grief and long-term grief. And one of the major problems I have observed among many traders is their tendency to transform what could have (and should have) been short-term grief into a much more intensive and debilitating long-term grief.

It has been often said that hindsight is always 20/20. While this is certainly true, it can be either helpful or destructive, depending on how you use it. The Samurai never looked back, thinking to himself, Maybe I could have tried this offensive technique or that defensive technique. He understood that the present moment was the only one he could control and that the future was all he could ever hope to shape. The past was done and gone, and whatever he did do was what he simply did - no questions asked and no second considerations given.


I suppose that the beauty of the market is the trader gets many chances, as to a Samurai who had only one chance in combat - or face death. The Samurai; the supreme professional risk taker.

 

[peernot]

Well if The Bamble is on top of the gamble
And cook wing dings in the swing of things
Then Marty goes on to be a smarty
Let us all grow old and laugh out hearty


Jack and Jill went up the hill etc. etc. etc.

 

[Simon Gordon]

After feedback from my brother on the stockbroker interference, I think I am using that as an excuse.

I failed to execute because of my own limitations as a trader.

Now I am wiser and if confronted with a similar trade, I think I will act more decisively.