If we want to be technical I “know” one or two languages; one of those being English(my native language). If we want to get out of the box a bit (which is an effect that I accomplish with all of my posts), I know several Languages.
We all know several languages. My reasoning for this is rather sound also; everything that we participate in. Every single activity, hobby. Etc. is nuanced. There are things that we can do and can’t do’ things that each activity is supposed to hint at(mean).
In all of our respective fields, we know these nuances. I’m not writing this post to simply argue that all things are languages though; I believe that finding the correlation between each activity(or similarity, I should say) will help us get an understanding of various other activities that we want to partake in.
Math and the stock market
I just had to add this in here for the simple fact that these two things are what really gave me the need to write this post. There are nuances to the stock(or really all markets).
Each individual movement on a chart(price movement in general) hints at a fundamental or emotional change in the market itself. The emotional changes(price shocks or noise) happen due to news and other events that may take place in a specific market; the people who profit from these emotional movements are people who have a fairly decent grasp of the language that that specific market speaks; they understand the nuances and can guess(with accuracy) what future price movement should look like based off of their past experience with that market.
The fundamental movements are based on things such as the intrinsic value of a company(too subjective for me) and the intrinsic value of a commodity(something that makes a bit more sense) fluctuating.
As I read in a book titled Long-Term Secrets to Short-Term Trading by Larry Williams there are also seasonal effects on the market prices, influences by other markets, the list really goes on for a bit.
My understanding of this is helping me in my efforts to understand math that I’ve never seen before.
Lately, I’ve been getting into prob and stats; for the simple reason that I believe that it can be beneficial for me in the long run if I want to build sound trading models.
The correlation between the two(the stock market and the math) is that neither the symbols on the charts or the math symbols themselves can just be “remembered”.
They must both be fully understood. The math symbols have a specific meaning and a string of them placed together can be translated into at least a paragraph in English.
It’s interesting. The same can be said for the markets and the movements on a price chart.
One of the fundamental things that I remember taking from one of my mentors Timothy Sykes(the guy who helped me learn that I really dislike day trading stocks) is that it isn’t really the best idea to simply memorize patterns on a price chart.
One must (or at least should) understand the fundamental reasoning behind a price movement.
Understanding the fundamental reasoning behind the price movement requires one to speak that specific language. As mentioned earlier, you should be able to discern what the reasoning means that the price should do(where does it go).
This isn’t just a post about these two things though
I just wanted to mention these things because they are at the forefront of my mind right now. This post really just speaks on the importance of having a deep understanding of whatever you are partaking in.
The understanding that you have can also be translated into something else and can help one really gain an understanding of what it takes to learn something. Understanding that it takes a fundamental change to really move a price chart, helped me understand that I needed to really understand what the symbols in the equations were really telling me, rather than simply memorizing the equations themselves.
It’s been a genuine struggle for me to really grasp either of these things
I’ve just begun to tackle the statistics side of things but, I understand what it will take for me to understand it.
This understanding is one of the things that I want to relay to you; the ease comes when you understand the process of learning something new and what your brain requires for you to do in order to do so.
So, in short, we are all bilingual(or multi-lingual. I don’t know the word for it yet) We all speak various languages and, all that it takes to learn something else is to transfer over the understanding that we have for the previous languages that we’ve learned over to what we’re tackling currently.
If you understand the struggle of understanding the symbols in a math equation and figuring out what they really mean, it’s a piece of cake to transfer over that endurance and understanding even if you are trying to learn something completely unrelated such as Portuguese.