I want to address the metaphysics and the ontology of stock trading. There is an illusion—the Noble Lie—that many traders fall for. The truth beneath the shadow is strikingly simple: ‘Price is subjective.’ Sounds simple, right?

For the fundamentalists who think price is objective, who believe ‘there is intrinsic value’ that they claim other investors are simply too blind to see—what happens when the market moves against them? They say, ‘The market is being irrational again.’ How cute. If there is an intrinsic value, why can’t investors see it or calculate it? Even if it exists and people need ‘reason’ to see it, why is there no ‘wise mind’ to declare it? Intrinsic value is a lie, a dogma, and the magic that traditional investors cast (perhaps subconsciously) to make the market appear stable and rational. But the market is a supply-and-demand chaos; if no one buys the stock, the price will not move—even if the company has a massive profit!

Then there are the technical analysts and quants who naively think they can predict a chaotic future with graph patterns and data. Laughable. Graph patterns are just another form of magic that the heads of technical schools use to keep the charts stable in their own way. If enough people believe in ‘graph theory,’ the market will follow their magic! That is why many technical schools obsess over specific timeframes and timezones—it removes the ‘noise’ while assembling the believers. They are deploying soldiers onto a battlefield where they are sure they are the majority, just to secure their sacred magic. As for the quants: you cannot fight chaos; you cannot fight infinity! Even if a quant wins a trade, it doesn’t mean their prediction or thesis was right. A throw of the dice will never abolish chance.

For all investors, as you see, the market is a battlefield of narratives, such as ‘intrinsic value’ or ‘graph theory.’ To win, you need risk management and an ability I call the ‘sense of the wind’—the sense of where the narrative is going. You must go with the wind.