Belief Four: The Universe is One
One of the key beliefs of most scientists before Einstein—indeed many still do hold such a belief—is that the universe is composed of large bodies and that there are certain interactions between these bodies. They also believed that any act of measuring something is separate from the individual doing the measuring and this was the model of the universe developed by Sir Isaac Newton. Even today, many scientists still assume that they can look at aspects of the universe, measure it and describe it, without having any influence at all. This assumption even holds for studying other living things or other human beings for that matter. Many scientists seem to feel that they
can measure psychological process while ignoring the effect that their own presence has on the creatures or persons that they are measuring.
In contrast, Einstein completely took apart that long held model of discrete measurer and discrete measurements. He stated:
“A human being is a part of the whole called by us ‘universe’. . . a part limited in time and space. He experiences his thoughts and feelings as separated from the rest—a kind of optical delusion of his consciousness. This delusion is kind of a prison for us, restricting us to our personal desires and to affection for a few persons nearest us.”
Einstein is saying that we’re all a tiny piece of a holographic universe. If you keep one limited perspective of a tiny corner of that universe, then you will have the delusion that it is just one separate piece of the universe. But when you can look deeply enough into it—when you can look at it from enough perspectives—you will see what it really is. The whole is contained in each piece.
Once again try this belief on for yourself. Think about the implications of this statement for any observations you might make about the market. Is there really such a thing as the market or is it just a theoretical construct? What happens when you attempt to observe the market and study the causes of up and down price movement? What do words like Bull Market, Bear Market, Correction, Overbought, etc., mean? Can you even give them meaning or even study them?
Belief Four Implications for the Markets: The Universe is One
This particular belief tends to relate to all of the others. What if the whole is reflected in every piece of the universe? What if you are totally reflected in the market? Can you observe the market without in some way influencing it? Perhaps to the extent that you can be totally neutral with respect to the market — but most people are filled with judgments and emotions. When they view the market, they typically get exactly what they expect to see.
Let’s look at an example of Joe, who has an issue with anger. Joe has a system that enters a trade when the market reaches a 30-day high, however, he also fully expects the market to stop him out. It always does. On one day, the market does make a new high, Joe enters a position and he puts a stop just under yesterday’s low. About an hour later, the market starts to creep down below his entry point. It keeps going down and down and Joe starts to get upset. Sure enough, Joe is stopped out at his initial stop which is also the low tick of the day so far. From that point, however, the market starts moving up. Joe is now furious— he believes the market makers got him
again. The market keeps moving up and soon it’s near the 30-day high again. Now, Joe is really furious. As the market starts moving up to new highs, Joe is beside himself. The market is always picking on him. After the market closes, Joe calculates he would have earned a $3,000 profit had he not been stopped out. Of course, Joe can’t even sleep that night. The next morning the market continues to move up and in the end, Joe calculates he missed out on another $2,000 in profits. Joe resolves to never enter another trade. The market proved him right.
What Joe never realized is that another entry signal fired when the market made a new high for the second time. He had been so angry that he missed a second trade. True, he lost $800 on the first stopped out trade but the second trade would have given him a $5,000 profit. What was in Joe’s mind was perfectly reflected in the market.
Once again, I don’t ask you to accept these beliefs as reality. Just start to notice how useful they might be. And if they are more useful than the beliefs you currently hold, then begin to think about their implications.
Five: “Our thinking creates problems that the same type of thinking will not solve.”
This belief is a direct quote from Einstein. Essentially, Einstein assumed that all human thinking makes certain presuppositions or hidden assumptions. These hidden assumptions are like unconscious beliefs that are just assumed to be true.
For example, Einstein believed that we could not really perceive what was going on in the universe because we were probably overlooking something simply because it was part of us or part of our thinking. For example, a fish in the ocean might not be aware of the ocean because it is so much a part of that ocean.
Einstein made this same assumption about many of the concepts that we use to explain the universe—gravity, time, space, etc. He made the assumption that we were ignoring a critical background element in the equation—light—because light was simply a part of everything we did. Indeed, most of Einstein’s most famous discoveries came from making the assumption (remember, it’s still an assumption) that there was only one major constant in the universe. That constant was the speed of light. When that assumption was made, time, space, and any number of concepts that had always been assumed to be fixed and real, suddenly became relative.
Now begin to think about the implications of this last belief for your reality of the markets. When you think about any belief you have about the markets, what are your presuppositions? You’re probably assuming certain things about time and price, aren’t you? What are those assumptions? And what are the implications if those assumptions are not true?
Belief 5 Implications for the Markets: Our Thinking Creates Problems that the Same Type of Thinking Will Not Solve
When you are thinking about the market, what are you assuming to be true? What influences your thinking, because you are a part of it, that you just assume to be true? Make a list of your beliefs about the market that is the basis of your trading. For example, you might say, “markets trend and I can profit from those trends.” Now take the statement apart and take a look at your assumptions.
“Markets trend.”
This makes the assumption that you know what markets are and what trends are. It makes some assumptions about price and time— that both are important and that both are relatively stable at least in the moment. However, we’ve already discussed how both are relative.
“I can profit from those trends.”
This makes an assumption about yourself. You can profit. But what does profit mean? Make money? How are you assuming that you can make a profit? Who are you? Who are you with respect to the other market players?
This analysis is just beginning to scratch the surface with respect to the presuppositions that you are making. Let’s just look at a few more presuppositions just to illustrate the point. You are assuming that profit means something and has some value. Value compared to what? Is it worthwhile to make some profit? What about the person who might take the other side of the trade? Do they want to make a profit? Perhaps you make a profit in the unit of measure you are thinking in terms of—dollars—but would you make a profit in Euros? Perhaps the dollar is going down dramatically in terms of the Euro and as a result you are really losing money with regards to your
“international” wealth.
These are simply examples of some of the presuppositions in a statement you might reflect on with respect to your trading. What about problems you face with the market? What are your presuppositions? Try listing some of your problems with trading and then list the assumptions that are hidden in your problem statements.
One Final Suggestion
I hope that this exploration of Einstein’s beliefs and their application to the market has stretched your imagination. I would suggest you work on the following process.
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