In describing the scenario, I‟ll share a short passage from Wikipedia, as it discusses Plato‟s
Allegory of the Cave…
“…imagine a cave inhabited by prisoners who have been chained and held immobile
since childhood: not only are their arms and legs held in place, but their heads are also
fixed, compelled to gaze at a wall in front of them. Behind the prisoners is an enormous
fire, and between the fire and the prisoners is a raised walkway, along which people walk
carrying things on their heads “including figures of men and animals made of wood,
stone and other materials”. The prisoners can only watch the shadows cast by the men,
not knowing they are shadows. There are also echoes off the wall from the noise
produced from the walkway.
Is it not reasonable that the prisoners would take the shadows to be real things and the
echoes to be real sounds, not just reflections of reality, since they are all they had ever
seen or heard?”
In other words…
What we perceive as reality is not necessarily so. Often there is a deeper reality which we
have just not seen.
Or…
That, which is perceived to be reality, is actually an illusion.
The same applies to trading.
My belief is that most people do not understand what a market is.
They see a chart and perceive price movement and its resultant technical analysis patterns and
indicator based signals.
And they assume this is reality. It‟s all they know. And it‟s all that‟s taught in the majority of
books, websites and courses.
Unfortunately, these traders are like the prisoners in the allegory of the cave. Chained to their
viewpoint, they falsely believe in their version of reality, which is in fact an illusion. They fail to
perceive the fact that there is a much deeper truth to the markets.
A reality that I believe makes ALL the difference in trading.