Wednesday, March 24, 2010

The spirit of the practice

The ancient martial arts practitioner used various "sayings" from his sensei as
a starting place to learn technique. Training followed,in the form of katas, to have the person become automatic, in any type of stress situation. Each saying was adopted,
and practiced until the full spirit was fully demonstrated in performance. You might notice in the these 1000 year old sayings, the spirit of the Pit.

happo biraki:total awareness on all eight sides
rinkiohen:adaptation to circumstances/
kage ugokashi no heiho:strategy of removing the shadow that hides the intention of the enemy
isshin itto:one mind - one strike of the sword
katsuhayabi: victory here and now
nadegiri: x

I'll let you find the meaning of the last one!

Wednesday, January 13, 2010

Old School Practice

Most of us want to have instant results in trading, and, coming from a hacker background, I'm always trying to figure out how to learn something quicker, faster and better. While doing some research on fun trips, I ran across three European guys who found an old Kung Fu master in rural China. Coming from a long tradition of Kung Fu masters in pressure points, it's interesting to look at his new students training program. Notice that there are only 36 pressure points taught, yet the training program consists of 3 sessions per day, six days week, for 2 years. The old guy was relentless in drilling the three novices until he could wake them up from a deep sleep in the middle of the night, and they could do the move perfectly. Fortunately, with the Practice Software, you can speed up the process, with the same goal of becoming completely automatic when the opportunity presents itself. Even so, it's click-click-click until you're there.

Tuesday, January 12, 2010

Simple rules create complex systems

How do ants search for food? They don't have cell phones, cars and mini-markets near the nest. It's based on SIMPLE RULES. And from those simple rules, seemingly very complex systems appear, like the Market.

Here is how ants work:

  1. Travel randomly in search for food.
  2. Take a piece of food and head straight back to the nest. On the way back to the nest lay down an odor trail.
  3. Notify nest-mates of the discovered food encouraging them to leave the nest. These newly recruited ants will follow the odor trail directly to the food source. In their turn, each ant will reinforce the odor trail until the food is gone.
Now that you know the simple ant rules, drop some bread crumbs and watch the rules in action

Sunday, January 3, 2010


Remember that each one of these methods is a "perspective" that give new information to you. A really useful exercise, is to
set up a stock's chart, then put only one method on the screen, say L&S..

Then, back away from the screen and choose a specific location in the room to look at the screen. Now, think through every thing
about L&S that you learned, to think about where the stock is "today." Once you have that, go back to the screen
and change it to only have Kizeme Blade on the screen.

Now, move to a completely different part of the room and repeat the process. (and for all the other Methods). Each Method will have a different location in the room.

By moving to different locations throughout the room, and using only one Method's perspective, you've "coded" that perspective
into your neurology, with everything you've learned. Now, when you sit back at your PC, you'll integrate all of them, and have full access to all the information and perspectives, so that you can make your trade.

Thursday, December 31, 2009

Practicing Perfectly

When I think of practicing perfectly in a general sense, it's much like a martial arts Kata. Katas were developed so that
you could practice the same move, over and over again, focusing completely on the execution of each move as a unit. It's extremely important to practice each piece perfectly, because they allow you to focus on the random, external enemy when the actual battle begins. In the following video of a Kata against a imaginary enemies, (which is animated), each "cut" has several components (foot work, hand position, eye focus, grip when cutting, etc, etc):

The Kata was developed so that each component could be practiced a million times, so that when the actual battle
begins, the practictioner can be completely focused on the enemy, not the technique, so that ANY of the practiced moves can be used, as the opportunity arrives. Practicing slowly at first, focusing on technique... then, increasing speed Once you are up to "performance speed",
you can do this:

So, first, concentrate on slowly and deliberately on execution of technique, then increase speed, while maintaining proper form.. If you are in a High Performance State when the battle begins, all your skills will be there, when an opportunity presents itself. They'll be no need to "think about it", you'll react instantly with the speed of proper form.

You might design your own "kata" in the Practice Software once you have mastered the individual rules. Set up a series of days, then take all Long trades, start over on the same data and take all short trades, start over again and take all ACTION trades. When you begin, focus on using the proper technique for entry, stop and target. When you go through the exercise again and again, pick up speed, until you have "performance speed." Be sure to practice in a High Performance State. After doing the "kata" several times in perfect form with speed, switch to a new series of data with your new found skills.


In 2005, a psychiatrist at King’s College in London administered IQ tests to three groups: the first did nothing but perform the IQ test, the second was distracted by e-mail and ringing phones, and the third was stoned on marijuana. Not surprisingly, the first group did better than the other two by an average of 10 points. The e-mailers, on the other hands, did worse than the stoners by an average of 6 points .

Of course, what the researchers really proved was the your "internal state" greatly affects your
performance, in this case, an IQ test. In the test, the three "internal states" that were tested were (1)Normal, (2) Distracted, and (3) Stoned. It would be curious to find out the IQ results using a High Performance State, but one thing is clear: people are getting high off email and phone calls. No wonder some people have to constantly check there email, and go crazy when they lose their cell phone.

The High Performance State is
the first prerequisite to trading. Without it, your trading is in the Land of Bias, and bias, as we've learned, is being focused internally on images, sounds and feelings. Being focused to the external Bid and Ask, will allow you to react instantly to the opportunity in front of you, based on what you've practiced. Even a mixed internal state, bouncing between what's external, and what's internal, will decrease performance and reaction time.

Wednesday, December 30, 2009


I've spent some time studying various martial arts... most recently, the Samurai sword. You can imagine-- it's pretty hard to find someone that has really been trained in oldest of martial arts! Originally, there were five schools of Samurai in Japan--- and, to find someone whose teachers came from those original schools is difficult, because the original methods were passed from generation to generation, through centuries of time.

Now, many people might question why I study something as impractical as a sword. It's not like you can carry one around, in case you're jumped by some bandits or something. But, there are several things about the Samurai, that are much like the pit traders. First, the techniques were learned on the field of battle, and passed on to each new warrior. And secondly, these techniques were taught by the new Samurai learning a ritual. Here was the Ritual before every battle:
1- Kata: hours and hours of practicing specific12-13 techniques against imaginary opponents
2- Preparation of the sword for combat: oil, powder, oil, sheathing
3- Actual combat: intense, focused, swift utilization of technique
4- Cleaning the sword after battle, and sheathing

For me, at least, it's not the physical aspect of learning these rituals and techniques, and becoming proficient at them, rather it's the "internal states" that
these hundreds of year old sword methods teach you.

One of these is called nanakorobi yaoki. Translated it means: fall seven times-- rise eight.