Ancient Wisdom / Modern Markets

[dc]O[/dc]ne of the interesting things about writing a large book is the amount of stuff that ends up not going in said book. The Art and Science of Technical Analysis is primarily about trading, the process of trading, and reading the patterns left by buying and selling pressure in the market. One of the issues I struggled with was how, and how much, to address the psychological aspects of trading. On one hand, I wanted to focus on more or less pure market analysis; on the other hand, no trader stands any chance of applying that knowledge profitably without iron discipline and a firm mastery of the psychological elements of trading.

In the end, much of the early material I wrote on psychology and the process of trader development did not make the final cut. The good news is that I will explore much of this territory in this blog–I have insights from my experience as a professional musician, a teacher of musicians, and also my experiences mentoring and teaching traders that are very relevant. I also have a perspective that is radically different from most other educators’. Though it is certainly a reflection of my personality and my philosophy, I do not find an emphasis on competition or aggressiveness to be productive. For me, it far more valuable to understand how to read the flow of the market and then to orient myself with that flow. Furthermore, I wonder if some of the current thinking on trader development (i.e. emphasis on elite performance principles) is somewhat misguided. I have come to believe that the process of becoming a trader has parallels in Joseph Campbell’s Hero’s Story and even in Carl Jung’s application of alchemical symbolism to psychology. I will explore these concepts in the future, but the unifying concept is transformation. Becoming a trader is about the transformation of many of our abilities and traits into the skill set of a successful trader. I have come to believe that many traders who fail do so because they do not understand the nature, the scope, or the challenges of transformative journey. It is not about learning to be a trader–we grow to be traders

I have also been influenced by my background in martial arts when I was growing up, and by my formal study of Eastern religious texts later in my college years. In the process of planning and outlining the book, I collected a set of quotes from some of these ancient texts that I intended to use as departure points for sections of the book. In the end, I decided to not do this for a number of reasons. For one, it wasn’t completely coherent with the tone of the rest of the work, but, on another level, I feel the constant use of these texts in business books and seminars trivializes them in some sense. Today, let me share three of the quotes I decided not to use. I won’t elaborate on these, but I encourage you to spend some time thinking about them and how they might apply to your trading.

If you open yourself to insight,
you are at one with insight
and you can use it completely.
If you open yourself to loss,
you are at one with loss
and you can accept it completely. Daodejing-23

Do you have the patience to wait
till your mud settles and the water is clear?
Can you remain unmoving
till the right action arises by itself? Daodejing -15

The quality of decision is like the well-timed swoop of a falcon.  The Art of War



Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.

This Post Has 2 Comments

  1. Mark

    Adam, you are really different to most of the trading crowd. I love to hear more from your concept of “transformation into a trader”. I think it takes a lot of practice and patience and full acceptance of oneself. That was one reason for me having started trading. I have thought it might be a way to discern more of myself and maybe grow more towards the core aspects of my inner. Selfish reason – for sure.
    Btw. I read a blog post written about your transformation into a musician when you belonged to SMB. I think you are not affiliated with them anymore? Did you need more time for writing your book?

    Agreed: “I feel the constant use of these texts in business books and seminars trivializes them in some sense” . But the quotes in this post are well chosen.


    1. Adam

      There’s a quote (attributed to Adam Smith, but one never knows with quotes lol) that, paraphrased, says something like , “if you don’t know who you are, the market is an expensive place to find out.” That’s true for a lot of people, but I do think a lot of good (and challenging) self-discovery happens in the process of learning to trade.

      Glad you enjoyed the post.

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