In last week's newsletter we looked at a more enlightened way to use TA – anticipating and exploiting traps within the marketplace. Here's the link if you missed it:
Today, let's look at another example of the concept discussed in this earlier article.
This reminds me of a prior series of articles on the market as a mechanism for self-deception. The series started as follows:
Here's a different way of viewing the markets and the game of trading, which I particularly like – the market is a mechanism for self-deception.
This idea comes in part from the world of military strategy. Deception is a key principle of warfare, as stated by Sun Tzu in one of his most famous quotations:
“All warfare is based on deception. Hence, when able to attack, we must seem unable; when using our forces, we must seem inactive; when we are near, we must make the enemy believe we are far away; when far away, we must make him believe we are near.”
… Sun Tzu
If we can show the enemy something that he wants to see, and that he perceives to be certain, then his decision making processes will become predictable and we can position our forces to successfully inflict defeat.
Can we apply this idea to the markets, and to the game of trading? Absolutely.
Here's the article links if you want to explore this idea further. Viewing the market as a mechanism for self-deception is not "pure" YTC Price Action Trader, but the trapped trader concept is an integral part of the YTC PAT approach: