I want to begin by acknowledging that I may not be fully qualified to write about the Tao. It’s a beautiful concept that is almost beyond words, and I don’t think I could ever do it justice. However, I have noticed that my trading and life in general have improved since I started implementing some of the Tao’s lessons. While I’m far from perfect and do not consider myself wise, I would like to share my experience with the Tao.
Several years ago, I read the Tao for the first time and thought, “This is powerful stuff. I’m going to have to revisit it.” However, at the time, I was focused on reading as many books as possible, and I didn’t fully appreciate the depth of the Tao’s meaning. Each sentence carries immense weight and should be pondered over for a long time.
Ironically, it was reading “The Tao of Pooh” by Ben Hoff that helped me truly understand the Tao. After that, I reread the Tao more slowly and methodically. I have since reread “The Tao of Pooh” five times, and I find that living simply, honestly, and in the present moment brings me the most contentment in life. When I am living like a Taoist Pooh Bear, I feel in harmony with life and fully present in the moment.
Okay, so where does this fit in with trading? The Tao is about flow and balance. I like to think of the Tao as surfing – surfing the waves of life, trading, or any other endeavor you are pursuing. In this metaphor, you wouldn’t want to fight the wave if it’s going up. You wouldn’t want to try to force the wave to be anything different than how it is if it were going down either. What would come of this? You’d struggle, waste time and energy, and eventually wipe out. However, if you are on the board and simply feeling out the waves, then you are in for a smooth ride. Sounds like the ideal trader, doesn’t it? A calm, experienced trader totally going with the flow and in the zone.
You wouldn’t want to fight the markets and impose your will and desires on them by dip buying as they’re tanking. The markets are telling you in this moment that it’s clearly bearish right now, so you can have your theories and trade ideas but forcing them at your own risk and peril. The markets are busting through major supports over and over…yet you try to force your will against them. Or you’re a short seller, constantly shorting into higher highs as euphoria reigns supreme for the greedy bulls. Now, even a broken clock is right twice a day, but is going against this obvious trend really a good use of our energy? That’s up to you to decide, I suppose.
My point is, when applying the Tao to a trader’s life, I personally found that getting a pulse for the overall markets and intelligently going with that flow really helped me. I take everything with a grain of salt, I live in reality. I know things can always go lower or higher than expected. However, I always have one foot out the door, ready for the boat to rock me back the other way. Because bull runs are not forever, and deep dark bear dives are not forever either. I choose the flow, I choose not to wrestle and fight with the obvious.
No ego, no force used. The Tao helped me realize that I need to take myself out of the equation. It has nothing to do with me. This world has nothing to do with me, this market has nothing to do with me. I am just so lucky to be here for this moment, to experience and engage with it. It was here before me, and it’ll be here after I leave. Do without doing and going with the natural flow, that is Wu Wei.
I have a word document in my phone that I constantly refer to in order to remind myself. I’d like to share some of the main takeaways from “The Tao of Pooh” if I may. As I list these off, think about how they might apply to your trading. If you haven’t read either the Tao Te Ching or “The Tao of Pooh,” stop reading this and go pick them up!
So here goes:
- The uncarved block is your true nature, pure and unadulterated.
- Cottlestone Pie- know your limitations. Don’t over reach or become something that you are not.
- Wu Wei – as I mentioned before, it is to do without doing. Going with the flow, sincerely being in the zone.
- Bisy Backson – the character Rabbit in a nutshell. To do do do and complete a bunch of tasks or projects just for the sake of doing them. Like a hamster running on a wheel.
- The story of the Stonecutter – is to know your value. Embrace your uniqueness, appreciate your strengths and be at peace with your weakness’.
- Compassion – with caring comes wisdom; empathy for others is paramount for a happy, fulfilling and truly meaningful life.
- The Snowball effect – this can work positively or negatively for you. The key is to make it work in your favor, or else face the consequences. “The more it snows, the more it goes and the more it snows, the more it keeps on going.”
- Empty mind – nothing is something, something is nothing. The clear mind can see what is in front of it, a mind stuffed/distracted with knowledge and wit can’t see what is obvious and right in front of it. To attain true wisdom, remove “things” everyday. The wise, are children who know.
