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Perception vs reality: Lessons from Hudson Session 5

We are a little behind on these write-ups, but I want to share an outline and playback from Hudson Session 5, which was held on 24 June 2023.

The Hudson Sessions are a series of in-depth talks, each on a chapter of my first book, The Art & Science of Technical Analysis. The goal of these sessions is to really go into the details of each chapter, but also to update you on how my thinking has changed and evolved in the decade since I wrote the book.

I also share some of the interesting things I’ve read and explored recently, and this particular session opened with some thoughts about perception. I spent some time looking at Donald Hoffman’s assertion that there is a zero percent probability that what you see is a veridical representation of reality—that we don’t see everything that exists, and that what we see is not real.

This is challenging stuff, but it’s a good place to start thinking about our own perception of the market.

  • After a look at some optical illusions, we turned to the content of the chapter, which is on the complexities of the interactions between trending action and ranging action.
  • I spent quite a bit of time considering climax areas, which are often called “bubbles” on higher timeframes. We looked at how to capture opportunity around these areas, and how to avoid some of the most common trading errors.
  • I spent hours on hundreds of examples (all drawn from data after the book was published) looking at the nuances of how markets range and trend and transition between the two.
  • We covered some new trending patterns I did not put in the book, breakouts, ends-of-trends, and much more.

We wrapped up with a quick review of the first part of the book, and how traders can collapse any pattern in the market into a handful of functional trade setups—this sets the stage for an understanding of market action that goes far beyond the usual patterns most traders focus on.

You can catch the replay here. I hope you can join us for the next of these sessions!


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.