(This is Part 13 of a continuing series. Go back to Pt 12.)
Those who know a little about me know that I used to be a professional futures trader in Chicago, among other things, and that I've followed markets off and on for many years and have even constructed theories about how to predict them.
And I've seen some amazing things. One afternoon, when I was trading in Chicago, I saw a friend of mine destroy himself financially in a single afternoon. Over the last few months, trading carefully, he had built up his account to about $400,000—a significant trading accomplishment.
But on this afternoon, something overcame him. He had determined, by various indicators and considerations, that the stock market simply had to go up strongly that afternoon. And so he took a massively large long position in the S&P futures contract, meaning that he would make a lot of money if the market did indeed go up.
Unfortunately, the market started down. My friend was unfazed. He knew the market "had" to go up. And yet the market continued down. My friend clung to his position, sure that it had to turn around soon and rescue him.
By this time, myself and several other people were urging him to get out of his position, because the market was going the opposite direction and he was beginning to massively hemorrage money. But he told us not to bother him, that he knew what he was doing and we should mind our own business. He was determined.
And the market continued down, farther and farther. And my friend held on, grimly determined that the market had to go his way soon. He was now very anxious, because he knew that he was losing huge amounts of money, and yet he wouldn't get out, because he just knew where the market was "supposed" to go.
And he rode it all the way down. The market wiped him out that afternoon. But it wasn't really the market that did it. The market was just doing whatever it was doing, it was following its path. Rather, it was my friend's resistance to the market that really wiped him out.
In other words, it was not the marekt's job to get in tune with his position. The market was massive and he was just an atom in it. Rather, it was his job to get in tune with the market. And when he insisted instead that he knew better than the market did, first he became very anxious and then he wiped himself out.
That day I learned a valuable lesson, which later on I would phrase to myself this way: The market is always right. No matter what I or anybody else or any theory thinks about where the market should go, it's going to go wherever it goes. And wherever it goes is—by definition—the "right" way for it to go. Wherever it goes is where it "should" have gone. Why? Because that's where it went.
In my time I've seen a number of successful—and unsuccessful—traders. Those traders who were unsuccessful had a trait in common: They would get out of tune with the market, hold on to position while the market was going somewhere else, and then insist that the market was wrong and they were right—that it had to go in the direction they thought it "should" go—and then kept on insisting all the way to wipeout.
In contrast, the successful traders, though they had all sorts of various trading approaches, also shared a common trait: They cut their losses short. When a loss occurred, they would take it quickly, and then reassess so they could get back in tune with how the market was actually being.
In effect, they were saying that the market "knows" more than they do about where it should go. In effect, they were following the perception that "the market is always right."
Much later, I was able to generalize this perception one day to the phrase "reality is always right." The understanding behind this phrase had been building in me for some years, but I never felt that I quite had an adequate phrase to describe it until the generalization from the market came along:
Reality is always right. What does it mean?
Let's first look at what it doesn't mean. It doesn't mean that tragedy is condoned.
Human tragedy can and does happen in various ways from time to time, both personally and collectively. As The Holocaust and countless other events demonstrate so vividlly, all sorts of tragic things can happen to people. None of this is condoned.
Reality is always right does not imply a facile indifference to human misfortune, or a "look the other way" mentality. Neither does it imply any particular course of action, such as a simplistic "do what feels good" or a "go along to get along" philosophy.
On the contrary, when someone perceives that reality is always right, it's quite possible that they could be acutely attuned to human suffering or strenuous efforts to relieve or ameliorate it in some way.
What does it really mean then, this notion that reality is always right?
It simply means that deep down, while we're doing whatever we're doing, we understand that existence is not fundamentally flawed. There's nothing "wrong" with it. It's just that it's so much more dimensional than we are, and knows where it should go far better than our individual "I"s do.
And we understand that existence does have this inherent duality about it, good and bad, up and down, which as far as I can tell is the price of having an existence at all. Perhaps at the deepest level existence is completely perfect, harmonious, divine in nature. Perhaps reality's deepest essence is divinity itself, and that this reality is one—one energy, one essence, one existence that is doing everything.
When we look at the parts we can see tragedy here and there. When we look at the whole—which can be contained in a single flower—we can see only harmony, love, compassion, divine perfection in some way that can't really be seen through the mind but which can be fully understood by the heart.
All existence is necessary. All existence is precious. And all existence is ultimately only the one love in disguise, no matter how contrary it may seem on the surface.
Perhaps we can come from there in doing whatever we do. Then our actions needn't come from any sort of rigid guidelines, but rather from just a deep and simple perception that reality is going where it's going, and we get to "contribute" our little piece. And that divine love here on earth shows up through us, as us, within us, from us. What a mystery! Perhaps that is love's divine and infinite way.
(This is the end of Part 13. Go to Pt 14.)
—jim sloman, 1.11.03 for 3.11.03
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