(SAN FRANCISCO) Have you ever wondered why crowds run frantically in an emergency situation or crisis? Why not duck behind a building or find safe shelter rather than scramble? Perhaps running to create distance from the danger was, in the final analysis, the best choice, however it is clear that most of the herd didn’t make that conscious choice; they just ran. Perhaps you’ve been in a similar situation where the behavior of the crowd was both fascinating and horrifying. 9/11 is a recent, thus highly documented example of people fleeing from a horrific attack as events unfolded.
In the battle between the fight or flight instincts, flight usually wins. Otherwise caring, docile people will trample the elderly and shove children out of the way, stampede, to save themselves. Some experts suggest that we have about 72 hours of loss of grid (power, water, law enforcement, etc.) before society begins to melt down and anarchy ensues. Sometimes called the “72 hours to animal”.
In a crisis or under severe adversity, the rush to animal is often instantaneous. Not the best conditions for logic and civilized behavior, yet even educated citizens of all faiths seem to react the same. We often see both the worst and the most heroic of human behavior under these conditions. The miraculous bravery and dedication comes from the few who are trained.
If there is a positive or educational aspect of our recent explorations into torture, it is that any human being can be broken. Our ability to endure extreme levels of pain or cruelty has a limit. Even elite soldiers will eventually comply to end the torture or due to mental breakdown. Information obtained is often deemed or proven unreliable. Our survival instinct will always kick in.
Fear and greed (in this case fear) are the greatest human motivators.
As with most creatures in nature, we avoid danger instinctually and many of our actions (even some aspects of our personalities) are subconscious acts of survival. Additionally, there is power in numbers. Most people follow the leader (as in job vs. entrepreneur) and stay with the pack. The plan, the responsibility and heavy lifting is shifted to others. A job traditionally offers less risk and more safety, but ultimately less reward.
Witness in nature how herds of animals being hunted tend to run frantically to escape, yet stay in a group for protection. This is the species best attempt to create the highest chance of survival. It is usually the injured or unlucky who stray from the pack that become the meal. Survival of the fittest.
Schools of fish provide fascinating movements, which seem random, yet they somehow cling together in a cohesive group and move in concert, especially while under attack. In the case of bait fish, this action works to the advantage of the predator. Big game fish and mammals are able to gorge on these mass schools and satisfy their enormous appetites. Fish or animals would arguably have a better chance if they dispersed in a million different directions. Large predators would never survive eating one fish at a time.
Law abiding citizens as well as those without proper training tend to follow directions and feel safety in the confines of the metaphorical box. Even if only perceived, there is a confidence that comes from that perception. In business, it should be no surprise that most prefer the safety of the corporate work-force career vs. the risk of self-employment. There is safety in working for a company where risk has been absorbed.
How we act in adversity and calm are rarely the same without training. The assumption that charting/research and trading are two sides of the same coin is a similar mistake. Trading is an entirely different animal and must be approached as such. As in any training, practice and execution are different ways of testing the same theories under different conditions.
As Mike Tyson once said. “Everyone has a plan until they get hit”, A jarring blow will most assuredly trigger a fight or flight response.
A few notes on winning:
In my years of martial arts training, I taught the concept that most people will train and get just enough skills to get themselves killed. Although it sounds like a negative approach, it achieved positive results. Either you learn to avoid the fight, which is a great skill, or you train for life, never stop, and in the words of the great Bruce Lee
Sun Tzu once said, “If I fight, I win”. In the Art of War, this means fight only when you know you will win.
Students of many styles, even at black belt level lack the training and experience for real conflict. In the west, black belt is the goal. In the east, it’s the beginning. For the intermediate to expert martial artist who has only trained under low stress, predictable conditions, fighting skills will likely fail when stress is introduced.
A soldier learns to perform under great stress and in the worst of conditions. The soldier that freezes in combat is useless and dangerous. History has proven that even the best preparation often falls short in severe combat. Luckily, we are not training for combat.
Sufficient training and “ease” or the “ability to breathe, think and act” under pressure separates the winner from the loser. Success can be achieved in trading the markets, even in these volatile times and under stressful conditions.
In order to apply the same measures required for consistent security, you study human behavior under certain conditions, the predictive nature of the herd and the actions that will most likely occur under those conditions. In order to insure levels of security, a plan for all contingences must exist. In essence, the markets are nothing more than human behavior quantified.
As in nature, most attacks are pre-calculated to trick the target. The suitable prey is lured into a favorable position for the attack and often surprised. The understanding and preparation for these predictable actions is the basis for all trading. In trading there isn’t anyone over the hill firing a weapon at you, or a tiger in the grass stalking you, but there is someone on the other side of the trade with a plan to take your money.
To win in trading you must either create or find favorable (high probability) conditions and take advantage (act) as they unfold. As in adversity (battle field adjustments), the latter is the most important in trading.
Another quote from Sun Tzu; The Art of War:
“Know your enemy (the market) and know yourself (plan & train)
and you will be successful in every battle”
The Dragon Analytics course predefines and identifies patterns in price action, called the 9 moves of the Dragon. What they represent and how to anticipate and trade momentum through these patterns is a key aspect of the DA course. The 9 strategies are effective on all time frames, suitable for long term, swing and day trading.
Understanding and application of the 9 moves of the Dragon is effective in achieving risk management goals and consistent profits. In this way, equipped trading allows the pro to extract income from the market through technique and analysis. Stress management and trading techniques are also a part of the DA curriculum.
The only way to consistently achieve success in trading is to do what the pros do. The pros know how to trick traders; its that simple. Market Intelligence strategist Joe Baker of JB Analytics asks and answers the question daily in his live trading room (part of the MBF Trader & DA training courses); “Who’s gonna pay you and why?”
Most tv information and platform indicators are referred to as “after the fact” or trailing indicators. In other words, who got paid and why? This is why most media is so brilliant; they tell you what happened after it happened; useless information for the trader or investor. Even breaking news is often a hodgepodge of speculation, confusion and attempts to guess what’s happening.
On a chart, this look left, trade left idea is useless as we cannot trade in the past. In the JB Analytics portion of the training, the “look Left, trade right” technique is taught and is extremely effective.
Get the trading plan, train under stress to gain insightful, real-time experience and train with the pro’s to win the game consistently. Finally, on the subject of geopolitical events and analysis, the MI Thinktank mission statement and motto:
“Never let a good crisis go to waste”
- Winston Churchill