Janice Dorn, MD, PhD
Neuropsychological Trading Coach
Janice Dorn, M.D., Ph.D., has been a full-time futures trader since 1994. Doctor Janice holds an M.D. in psychiatry and is board-certified by the American Board of Psychiatry and Neurology in general psychiatry and addiction psychiatry. She holds a Ph.D. in brain anatomy. A graduate of Coach University, she is a pioneer market psychiatrist and financial neurobehaviorist. Doctor Janice has written over 500 articles on the financial markets and coached over 600 traders worldwide. She is the Global Risk Strategist for Ingenieux Wealth Management Group, Sydney, Australia.
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EQUILIBRIUM
Over the past few weeks, I have received a number of emails which indicate to me that many of you are searching for meaning in your lives as a way to make yourselves stronger,more centered and successful as traders. You are struggling with the connection between spirituality and science and trying to find a way to mesh them.
In this regard, I refer you to the work of Phillip Callahan, a philosopher and scientist, who, in 1975, devised the theory of Reverse Bionics. Reverse Bionics is the study of technology as a guide to understanding nature ( as opposed to Bionics, which is the study of nature as a way to understand technology).
Without going into depth at this point, I will try to summarize for you why it is important for traders to apply Reverse Bionics to the markets. By this, I mean to find lessons in science and technology that mirror the nature of the human financial markets.
Since I will not likely be in Book Chat tonight, I would like you to think about one of the best examples of how nature applies to the markets. The Fibonacci ratio ( sometimes referred to as The Golden Mean), which is .618 and it's inverse which is 1.618.
Throughout nature, in flowers, fruits, plants and in art and architecture, you will find the Fibonacci ratio at work. Look for it in the mountains, the forests and you will find it. Look for it in the movement of the markets and you will find it, repeated over and over again.
Why I am talking about this on the day of book chat?
Because the Elliot Wave Theory is correlated strongly to the Fibonacci ratio, and is described on the Elliot Wave International Web Site as follows ( with a little interpretation of my own added to it):
One of Elliott's most significant discoveries is that, because markets unfold in sequences of five and three waves, the number of waves that exist in the patterns of the stock market reflect the Fibonacci sequence of numbers ( 0,1,1,2,3,5,8,13,21,24,etc). This is an additive sequence that nature employs in many processes of growth and decay, expansion and contraction, progression and regression. Because this sequence is governed by the ratio, it appears throughout the time and price structure of the stock market, apparently governing its process.
In simple terms, what the Wave Principle says, then, is that mankind's progress ( which is really your progress as a trader and a human being) does not occur in a straight line. It does not occur randomly and does not occur cyclically. Instead, this progress takes place in the manner of "three steps forward, two steps back." This is the form that is preferred by nature and the form that allows for survival and selective adaptation.
As a corollary, the Wave Principle reveals that periods of setback are, in fact, requisite for social progress. I will even go so far as to say that periods of setbacks are requisite for individual progress as well, since the progress of the individual is harmonious with the progress of society and may not be separated easily from it.
Those of you in the futures trading room will often hear Naturus say that "our ES is seeking equilibrium." Pay attention to what you are seeing in the markets and what you are feeling in yourself.
Just like the markets are always seeking equilibrium and balance, so are we as traders, investors and human beings.
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