The world is almost like repeating itself, many things had happened in the past, and they are happening again, like a cycle. What is a cycle? Cycle is a circle, a continuous loop, a spiral and never-ending. Usually, it could contain at least two sides highlighting the duality nature of the world. Respecting the cycle is respecting the world, and that’s all you need to have a potentially happier life.
This idea is not my own, I have been inspired by many people and many things in life. The world is moving fast, but the essence of life remains unchanged. The cycle is always there like an invisible force, ruling the world, like the law of nature. This isn’t just random thoughts if we look at the history in the back. Many once-great civilisations have lost, many powerful nations have disappeared, and once-dominating companies have become average. In the long term, however, the world is improving, like a spiral moving upwards.
How does this apply to trading or even daily life?
In trading, it helps us to see the market differently as in cycles. There will be always ups and downs, and once a new cycle starts, it is almost impossible to counter-trade the trend. However, to end a cycle while starting a new one requires some sort of events or catalysts. Usually, a market crash or a financial crisis is a good example of the end of the previous cycle and the beginning of a new one. The end and the beginning are always connected, much like the concept of yin and yang.
How I see it is that overwhelming positivity will give birth to negative aspects, like overconfidence may lead to a market crash. That’s also when to consider taking profits and reduce the overall positions to for example 10% instead of 100%, then start trying smaller bets on the short side. This is really the beauty of options trading, little bets but huge rewards on top of a more stable long-term investment. This also goes for the opposite side, when the market is crashing, it is time to start buying, but not all in, just bit by bit for example 5% each time. Remember as long as the price recovers to where it was before the drop, it is already a profit.
Accepting both sides of the market and cycles is quite important because it is also accepting both sides of myself. Like the market, I do have my ups and downs, and my two sides, both good and bad. The cycle is everywhere, just like the time, every 60 seconds, a minute has passed, and time is always moving forward, and it is only one way. Many many cycles have met their end, and that’s probably when something major may happen, either good or bad.
If I can determine my cycle, I can also see things more clearly. When things are going too well, I often want to pause and start thinking about the potential issues, because it should never be smooth. I want to respect the cycle, so I won’t get carried away always and get pulled back by the invisible force. In challenges or hard times, I want to just accept it, and follow the flow until that day the cycle ends, and the good one starts again.
Balance is what I am seeking, I don’t want to break it at any time, but I will because I can never be too balanced, just like the stock is always moving even without any events. I simply want to acknowledge the cycle, and respect it. I want to see both sides of myself, and accept them. That’s all I need…
Just one more week to go, I will start implementing my trading system in C++. I have fixed all compile errors and should be ready to go. C++ is fine even if you are just compiling, this project will most likely fail, but I want to at least have some fun, learn some C++ and understand the IBKR api well enough, every project may bring something new, but I never know until that day comes.