From bits to bucks

 "Trading is simple." You hear this statement uttered by both newbies and experienced traders. Of course the two parties have very contrasting reasons for making this statement --the former sees early success and concludes what they are doing is all there is to it, while the latter obfuscates the complexity with a simple, good strategy which they adhere to with unwavering commitment.

What the experienced trader doesn't necessarily do is delve into the complexity and break down their personal journey that led to such a conclusion, nor may they be precisely aware of what makes them successful (after all a wise man simply exudes wisdom, i.e. doesn't deconstruct it). 

So what exactly is it that makes trading simple and yet complex at the same time? The deceptive simplicity of trading lies in the fact that each individual trade involves the binary act of either buying or selling, but don't let that fool you. At the lowest level, an electronic device with a chip inside consists of bits set to a binary state-- 0 or 1. But string together enough of these (as in billions) in the right combination, you suddenly find yourself with a complex electronic system like the brains behind a cell phone. 

It's not too much of a stretch to suggest that trading systems are analogous to chips. Instead of 0s and 1s, we have buys and sells. At the end of the day, you can make a phone call or message someone across the world with the push of a couple of buttons in spite of the untold layers of complexity of the underlying phone. A trading system can also come down to apparently simple execution, but getting that upward sloping PnL curve requires an intelligence beyond random buys and sells. You need to have formed a system that is of course logistically comprised of buys and sells, but does so in a manner that predictably gets you from point A (lower capital) to point B (higher capital). That system may end up being a complex labyrinth of if/else/while conditions, mixed with some more nuanced decision-making (the analog component of the chip). 

Do you stress the hell out if you mis-dial a number on your phone, and worry that you may never be able to reach the person at the other end? No, you re-dial with the correct number, knowing that putting in the right number will predictably correct the issue. The lesson here? The next time you have a loser, don't stress the hell out. Put in the right parameters and get back to work, and your system will take care of the results. If you've got a bug or the battery's low, make a decision on whether to reset or recharge!