Change is progress, stagnation is death. That is the truest truth, especially in capitalism and thus also in trading. Grow or die. But then the real question is, why do so many people want to go backward? Everything was better before, we will make this and that great again, bla bla bla, yada yada yada. And why are so many people afraid of change when change is the only thing that ever brought humanity forward?
In Germany, we have this saying:”The farmer doesn’t eat what he doesn’t know”…that exactly describes the herd mentality. People are afraid of change because it involves an unknown factor. What will happen if we do that? What will happen if do this? I want to go back to my mommy. Where is my mommy? That is exactly what is happening in politics and in the world right now.
And also in trading. People are scared of algorithms. Will chart trading still work? Will human traders even be able to trade in a few years from now, or will the market be completely cluttered and torn apart by billions of transactions each second in the great algo war?
Questions, questions, questions, all I see are questions, but no actions! Adapt or die. Most people worry, and that worry paralyzes them. Instead of reading, learning, improving, changing, they close their eyes and keep running until they fall off the cliff. And then they blame everyone and everything, but not themselves.
If you are so worried about algos, why don’t you look at Python? Read up on it. Cloudquant, Quantopian. The tools are there, the information is there, for free. Get educated and then make an informed decision instead of worrying and crying like a baby. This is really paradoxical to me, because when I am worried about something, then I do everything I can to dissolve those worries. But most people just bury their head in the sand. Crazy.
There Is Always Something That Has To Be Done Better
The Status Quo was never satisfying to me because there is always something to improve. When I was working for a big corporation, the managers there sometimes said to me “no, we don’t like your suggestions, we have always done it this way and we will keep doing it this way”. Well, that is the most stupid thing I have ever heard in my life.
Just because something has been around for a long time, that doesn’t mean there isn’t a better alternative. The opposite is the truth – the longer something is around, the more likely it will become obsolete. This is also true for people that don’t change. They become an artifact of the past, ready to be exchanged with a new, hungry and curious person.
You always need to question the Status Quo, in everything you do. After all, the greats in the history of mankind were always the disruptive ones. From Socrates to Cesar to Elon Musk to Steve Jobs to Muhammad Ali. They were all very unique. Why? Because they looked at the Status Quo and said “wait a moment. This is not right. This can be done better, and this as well”, and so on.
And yes, this is very true for trading, as well. You should always question the Status Quo of your trading strategy, but you have to do it with a system – that is, a trading journal. And by this I mean you should not worry or doubt your system, but you should always ask yourself whether what you are doing still makes sense in relation to the current market conditions. Review, study, learn, improve, progress.
The markets are ever changing, the world is ever changing, and the worst thing you can do is to look away and ignore it. Or even worse, go backward and vote for conservative politicians or opt to stick with your trading strategy only because it worked for the last 5 years and now it stopped. This will only bring you disaster.
And the beauty about this is that it is an organic process. Once you get used to the process of reviewing, seeing things in perspective, and adapting, it will be the most normal thing for you to do, like breathing.
Death (Change) Is The Big Equalizer
Big companies like Yahoo refused to change, or they didn’t see that the world around them was changing and they ultimately perished. Even McDonalds had to change after 50 years of growth because their business model suddenly stopped working as it used to. Car companies, delivery businesses, bookstores, restaurants, the list goes on and on. Everything eventually becomes outdated.
That is especially true for leaders. When you are catching up, you are hungry. You have the drive. You want to be number one, the best. But once you have actually become the leader, you become complacent, arrogant, rigid, unflexible. Someone else will eventually take your place. Empires come and go. It’s a natural cycle, life and death.
In trading, it is the same. Everyone thinks “once I have a strategy, I am set for life and I can trade it for the rest of my life” – no, that’s not how it works. Even traders of classical chart patterns, which have now been around for almost 100 years, had to make adjustments to how they trade these patterns in order to thrive and survive.
Whenever someone says “we don’t need this, we didn’t need it before”, be very, very careful. They have already become dead weight. Distance yourself. Progress is the only way to prosperity.
We as a human species have only come so far because we are the most adaptable species on this planet. I reinvent myself every day. I become 1% better every day. And that is the secret of my success, the magic sauce.
Changes Equal Chances
So before you send me an email next time asking “how long has your strategy been working, how long do you think it will work, what about algos, what about changing liquidity?” and so on, simply take a look at yourself: you are seeing all of this, how the conditions change, which is good, but you see it as a threat, which is bad.
See it as a chance instead. When the world changes, there will always be winners and losers. When old and established structures are broken, this creates opportunity. Be happy about that, because no change, no opportunity, especially for newcomers.
Some of the best musicians out there are the ones that have no classic musical education, why? Because their thinking is not deadlocked by 500-years old theories. They simply do what feels right. I even think that the internet is both a blessing and a curse. A blessing because now you can get all the information about trading strategies for free and learn in a short amount of time what took others years to comprehend. And it’s also a curse because you are taken away the chance to make up your own mind, to see charts and trading with the eyes of a toddler, so to speak.
Of course, my favorite arch enemy, the education system, does not teach you how to criticize the Status Quo, because they don’t need and don’t want people like that. They want to keep the Status Quo, so they can keep their power, their money, their way of life at the cost of others.
So you will have to teach yourself how to do that. Critical thinking is a skill. Looking at something and instantly seeing the flaws and what can be improved, that is one of the most valuable skills in life. How can we train that? Well, you know my answer. Read books you don’t understand, talk to people that are smarter than you, and train your brain muscle. Asking for directions? Start with the teachings and writings of Ayn Rand, for example. You are welcome.
Embrace change, fuck the Status Quo. It sucks.