Taoism and Trading

If you’ve been trading for a period of time, you may be familiar with 2 phrases:  Never fight the market and the trend is your friend.

I believe that these are wise words indeed, In fact to go further.  It might sound strange at first, but I believe that my system goes with the flow of the market.  Like the ancient Chinese Taoism.  The Tao signifies the energy all around us.  And the teachings are always to flow with the Tao.  Like a surfer that uses the gravity of water to flow with its energy or a sailer that uses the energy of the wind to power the boat.  Similarly, in trading it is senseless to flow against the market, the only way to win is to find a way to flow with the price movement.

I had not thought about this before, but, flowing with the market and always having a trade in place if the energy behind the price moves up makes sense to me.

Incidentally Tao is pronounced “Dow”.  Obviously the Dow Jones was named after Charles Dow, so no connection, but a funny coincidence all the same.

It’s good to dwell on this ancient Chinese philosophy, for everything in our life, from driving in traffic, playing sports, sailing, or trading, flow with the wind, go with the current, just keep a steady hand on the wheel and an eye on the sails, don’t push don’t sweat and strain, keep your blood pressure down, move with the traffic, trade in the direction of the trend.  Remind yourself that you are the eye of the storm and keep your head when all others around you are losing theirs.

May today be a profitable day…for all of us.

John