Here’s a myth you see almost everywhere online: Successful trading is simple.
The truth is, it’s not. That’s just a marketing angle.
If trading was simple, anyone can just pick up a book, follow what it says, and become a winning trader.
But that’s not how it works.
Successful Trading Isn’t Simple
Working at McDonalds is simple.
You show up, follow a list of step-by-step instructions, and get paid at the end of the day. There’s a clear link between cause and effect. Follow the instructions and there’s a 100% chance you’ll get paid. Don’t follow instructions, and there’s a 100% chance you won’t.
That’s not how trading works.
Trading Isn’t Complicated Either
Another common misconception is that trading is complicated.
Sending a rocket to space is complicated. Building a factory production line is complicated.
Both require a set of steps that, once performed, leads to an almost certain outcome.
The series of steps may be long, and some skill may be required, but outside of human error there’s little doubt as to the outcome of following those steps.
This is not how trading works, either.
In Truth, Trading Is Complex
The difference between something being ‘complicated’ vs ‘complex’, is that in the latter case, the sum of its parts is greater than the whole.
When you send a (complicated) rocket to the moon, it will either reach its destination, or blow up along the way. There’s a zero percent chance it will transform into a giant robot and attack the nearest city. The outcome is binary.
The food chain, on the other hand, is a complex network of relationships out of which unpredictable outcomes can emerge. Introduce a new species of frog into an existing natural environment and you might wipe out 70% of the animals in it. There are subtle nuances that, if not fully understood, can quickly lead to dramatic outcomes.
Nature, like the financial market, is neither simple nor complicated. It’s a complex system with a constantly shifting equilibrium.
Successful Trading Is Elegant
The fact of the matter is that human brains are not naturally wired to think about complex issues.
We think about simple things, like what we want for lunch, or perhaps something more complicated, like how to fix that broken down air conditioner. With some rudimentary Googling skills, you can get an answer pretty quickly.
When it comes to complex topics, such as getting children to succeed in school, however, we struggle.
There are too many moving parts, changing in real time, for there to be any easy answers.
By understanding just this, you are ahead of the countless wannabe traders who are still busy looking for that “winning system”.
They’re looking for an answer to a complicated situation without realizing that the market is actually a complex entity.