The Way of the Trader is a path towards inner peace. It is a path fraught with peril at every turn since far sharper than an enemy's blade is the way of the mind. With fear at every corner, round every turn the trader not only has to combat the unknown but far worse come to terms with the greater unknown of the fearful self. In turning to one of the greatest pieces of Taoist literature; a 2000 year old treatise named 'The Art of War' by the philosopher Sun Tzu; we hope to unravel some of the fears that preoccupy the mind and hinder the growth of the self on the path towards inner peace and so doing endeavor to imbibe some of the rules and precepts that made 'The Art of War' one of the most widely referred to manuals in the history of military education.
The following translations and text discourse are the English translations of the original Mandarin by the author Thomas Clearly published by Shambhala Dragoon editions. Trading commentaries and interpretation are provided by Pieter Bergli.
∞ ∞ ∞ ∞ ∞ ∞ ∞ ∞
Book 1
Description - The importance of strategy in military conflict and the explanation of 5 parameters that become the guiding principles of assessment for such conflict; being - the Way, the Weather, the Terrain, the Military Leadership and the Discipline.
Charachters: Master Sun, Students: Jia Lin, Zhang Yu, Li Quan, Du Yu, Cao Cao,
Du Mu, Chen Hao, Ho Yanxi, Mei Yaochen, Wang Xi
Opening statement:
Master Sun
Military action is important to the nation - it is the ground of death and life, the path of survival and destruction, so it is imperative to examine it.
Interpretation - The markets are the ground of death and life; we can live or we can die and how we fare very much depends upon how we learn the nature of the markets and develop a set of analytical skills to help us forge superior tools to engage in battle on that battle ground.
Du Mu
The survival or destruction of a country and the life or death of its people may depend on military action, so it is necessary to examine it carefully.
Jia Lin
The ground means the location, the place of pitched battle - gain the advantage and you live, lose the advantage and you die. Therefore military action is called the ground of death and life.
Interpretation - A trader engages in a form of fighting akin to military action. For every short the trader will battle against the long, for every long the trader will battle against the short. The place of the pitched battle is the trading range that the trader may enter. This trading range can assume the shape of the 50 day moving average of price where the pitched battle rages between the longs and the shorts. Gain the momentum and profit form life; lose the momentum and the life of the trade dies. Traders use a variety of moving averages for the short, medium and long term interpretation of price action of pitched battle. The short term 7 days is too small a span to gauge the pitched battle and the 200 days is too exhaustive to assess the territory of the conflict. Therefore the trader looks to the medium term as a balance between the short and the long time spans of conflict and assesses the position of the pitched battle therein to enter either as a long or a short in the market battle.
Charting services Omega Research.
Moving averages: Red = 7, Blue = 50, Grey = 20,
USDX contract chart Sep 2015 ICE Futures
to be continued.
Please also read a philosophical companion:
The Way of the Trader Master Lao Chpt 2 by Pieter Bergli:
Chpt 1 - http://forexeducationperspective.blogspot.com/p/blog-page_51.html
Chpt 2 - http://forexeducationperspective.blogspot.com/p/the-way-of-trader-master-lao-chpt-2.html
Thank you
