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be afraid of random, inconsistent results without realizing that your
random, inconsistent approach is creating exactly what you are afraid
of.
However, if you believe that an edge is simply a higher probability of
one thing happening over another, and there's a random distribution
between wins and losses for any given set of variables that define an
edge, there is no reason to gather "other" evidence for or against a
trade. To a trader operating out of these two beliefs, gathering
"other" evidence makes no sense. Gathering "other" evidence makes about
as much sense as trying to determine whether the next flip of a coin
will be heads after the last flip came up tails. Regardless of what
evidence you find to support heads coming up, there is still a 50%
chance that the next flip will come up tails. By the same token,
regardless of how much evidence you gather to support acting or not
acting on a trade, it still only takes one trader somewhere in the world
to negate the validity of any, if not all, of your evidence. The point
is "why bother?" If the market is offering you a legitimate edge,
determine the risk and take the trade.
5. EVERY MOMENT IN THE MARKET IS UNIIQUE.
“Unique" means not like anything else that exists or has ever existed.
As much as we may understand the concept of uniqueness, our minds don't
deal with it very well on a practical level. Our minds are hardwired to
automatically associate (without conscious awareness) anything in the
exterior environment that is similar to anything that is already inside
of us in the form of a memory, belief, or attitude. This creates an
inherent contradiction between the way we naturally think about the
world and the way the world exists. No two moments in the external
environment will ever exactly duplicate themselves. To do so, every atom
and every molecule would have to be in the exact same position they were
in some previous moment. Yet, based on the way our minds are designed
to process information, we will experience the "now moment" in the
environment as being exactly the same as some previous moment as it
exists inside our minds.
If each moment is like no other, then there's nothing at the level of
your rational experience that can tell you for sure that you "know" what
will happen next. So, why bother trying to know? When you try to know,
you are, in essence, trying to be right. I am not implying that you
can't predict what the market will do next and be right, because you
most certainly can. It's in the trying that you run into all the
problems. If you believe that you correctly predicted the market once,
you will naturally try to do it again. As a result, your mind will
automatically start scanning the market for the same pattern,
circumstance, or situation that existed the last time you correctly
predicted its movement. When you find it, your state of mind will make
it seem as if everything is exactly as it was the last time. The
problem is that, from the market's perspective, it is not the same. As
a result, you are setting yourself up for disappointment.
What separates the best traders from all the rest is that they have
trained their minds to believe in the uniqueness of each moment
(although this training usually takes the form of losing several
fortunes before they "really" believe in the concept of uniqueness).
This belief acts as a counteracting force, neutralizing the automatic
associative mechanism. When you truly believe that each moment is
unique, then by definition there isn't anything in your mind for the
associating mechanism to link that moment to. This belief acts as an
internal force causing you to dissociate the "now" moment in the market
from any previous moment filed away in your mental environment. The
stronger your belief in the uniqueness of each moment, the lower your
potential to associate. The lower your potential to associate, the more
open your mind will be to perceive what the market is offering you from
its perspective.
***
When you completely accept the psychological realities of the market,
you will correspondingly accept the risks of trading. When you accept
the risks of trading, you eliminate the potential to define market
information in painful ways. When you stop defining and interpreting
market information in painful ways, there is nothing for your mind to
avoid, nothing to protect against. When there is nothing to protect
against, you will have access to all that you know about the nature of
market movement. Nothing will get blocked, which means you will
perceive all the possibilities you have learned about (objectively), and
since your mind is open to a true exchange of energy, you will quite
naturally start discovering other possibilities (edges) that you
formerly couldn't perceive.
For your mind to be open to a true exchange of energy, you can't be in a
state of knowing or believing that you already know what's going to
happen next. When you are at peace with not knowing what's going to
happen next, you can interact with the market from a prospective where
you will making yourself available to let the market tell you, from its
perspective, what is likely to happen next. At that point, you will be
in the best state of mind to spontaneously enter "the zone," where you
are tapped into the "now moment opportunity flow."
From: Mark Douglas (2000): “Trading in the Zone: Master the Market with
Confidence, Discipline and a Winning Attitude." New York Institute of
Finance: New York, 216 pages; (pp 130-35).
Beginner’s Mind
People say that practicing Zen is difficult, but there is a
misunderstanding as to why. It is not difficult because it is hard to
sit in the cross-legged position, or to attain enlightenment. It is
difficult because it is hard to keep our mind pure and our practice pure
in the fundamental sense. The Zen school developed in many ways after
it was established in China, but at the same time, it became more and
more impure. But I do
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