Sometimes the best thing we can do when we are in a rut, is just stop trying to move forward and just get out of the rut.
I have been feeling this way with my trading lately. Heavy, boring, overall break even and most of all, utterly uninspired and pointless. So in short, I have been in a rut.
I think the rut isn’t the system or any other detail, I think the rut is trading itself. The way I have been approaching trading is my rut. I can get so deep into thinking about it that all of a sudden I find myself walled in and unable to function any where else in life because “I need to get this right and make it happen and if it doesn’t then I have failed”. That, my friends, is a terrible place to live.
So I am getting out …
I have been on this journey of mastery of trading. The model has been Jiro in “Jiro Dreams of Sushi”. Perfection, process, patience, practice. But what if we took all of those characteristics and applied them to the wrong goal? What if I tried really hard to practice and process out something that was not ever meant to be a strict science. What if there are things in life that are meant to be played on the level of probabilities, and not certainties? Could I stand that!? Could I subject myself to a process that I actually couldn’t control but is left to chance? Where the Jiro type process is actually picking the most probable situation instead of trying to create the right answer?
PROBABILITIES vs. CERTAINTIES
When I think of practices that can and should be processed out, I think of things like the martial arts, making sushi, accounting principles and so on. Those are things that really can have a process, a set of rules that can be followed every single time that will produce the same result if set into motion. These are certainties. These are science, math, law. These are things that could be considered structures of society. Cornerstones of “how things should work”. People make great careers and change the world using these constants. Businesses function every day and the world grinds its gears around certainties.
But there is another force in operation every day, the force of probability.
I have been exposed to the idea of probability for a long time as we all are but it never really sank in. Coin flips, card games, and my favorite movie of all time (not all time but some of time), Moneyball. These all exemplify the idea of probability. Defined as “the extent to which something is probable; the likelihood of something happening or being the case” Probability is so often cast by the way side by people who need control as gambling and foolishness. I can say that because I was one. Control is a mechanism by which one protects themselves from getting hurt, from losing money or any other number of important things in our lives. If I can control it, it can’t hurt me. That is a certainty. But this isn’t math or science. It’s trading, and it’s life. Some of the greatest feats of art and experimentation in the world have come from a fortuitous culmination of time, resources, and determination. These are ideas, risks. Chances taken with all being won or lost based on whether the idea works or not. One of my favorite ideas that you all have heard me talk about before is “transfer of risk”.
THE RISK OF THE PROBABLE CANNOT BE TAKEN ON BY FALSE PRECISION
So to bring the conversation back to being a trader, I am coming to believe trading is simply a game of the probable. I am a lowly retail trader that will always be at the whim and will of a market that is truly engulfing in nature. This realization begs and beckons me to live my trading life out of the probable and not the absolute, the fortuitous and not the certain. If I truly want to embrace this as a way of life, I have to do that the same way as other members of this cast of truly unique characters who put it all on the line for a chance at something great.
I must develop a system, not a system of absolutes, but a system of the probable. And that is what I am going to set out to do in life, and in trading.