Praise for Trading from Your Gut

$SPX (S&P Large Cap Index) INDX
1 A
M J
J
A
S O
N
08
D
F
M
A
M
M J
J
A
F
S
O
08
N
D
Resistance
Resistance
Resistance
FIGURE C.2
S&P 500 weekly chart
I was recently engaged at the time, and somehow the conversa-
tion of the stock market came up with my then future (and now cur-
rent) father-in-law, who was planning on retiring in a few years. I
advised him to get completely out of stocks. It was the first time I
had ever advised anyone on their personal investments outside of a
professional context. I really hate giving people advice because it is
From the Library of Daniel Johnson

---

ptg
almost impossible to predict the markets. If the market had gone up
after that point, I would have put family relations at risk.
This time was different. My intuition was screaming, “Danger!”
So I stepped out of my comfort zone and told him what I thought.
At the Trader’s Expo a few weeks later, I gave the advice I men-
tioned in Chapter 1, “The Power of the Gut,” when I told the inter-
viewer there was a significant chance of a major down movement. I
was thinking of the 1987 silver trade and of Livermore’s advice.
So if you find yourself relying on your logic and analysis in your
trading, I encourage you to consider the possibility that you are
selling yourself short. You could become a better, more complete
trader if you develop your whole mind.
Trading as Art
My wife, Jen, comes from a family of artists. She, as well as her
mother, father, and brothers, paint and play various musical instru-
ments. They are always working on some project. Jen also loves to
go to art museums. We’ve been lucky enough to have visited some of
the top art museums in the world during the last couple of years. I
don’t come from a family of artists, so this has been something new
to me.
One of the more interesting things I’ve noticed as I’ve walked
the halls of the Prado, the Met, the Van Gogh Museum, and others
is the interplay between technique and creativity. The artists I like
the best have innovated by taking a technique to a new level, or they
have taken a technique that others have pioneered and moved in an
166
T
RADING FROM
Y
OUR
G
UT
From the Library of Daniel Johnson

---

ptg
entirely different direction. They have combined technique with
creativity.
At its best, trading, too, can be an art form.
Anyone can learn the techniques and tools of trading if they take
the time to read and practice.
Learning the art of the trade takes a little more effort. It takes a
certain willingness to submit to the unknown, the uncertain future,
and the danger that might confront you. It takes a willingness to let
your intuition drive some of the time. This willingness doesn’t come
easy to most people. It takes practice.
Start small if you must, but put your intuition
to work with actual trades, and you will find
that it complements your intellect.
To develop the art of the trade, you need to practice the act of
relinquishing some of your decision making to your gut intuition.
Only through this practice will you gain enough confidence in your
intuition to let it optimally guide you. So start small if you must, but
put your intuition to work with actual trades, and you will find that it
complements your intellect.
At age 87, after having sculpted La Pieta and David and painted
the Sistine Chapel, Michelangelo scribbled in one of his sketch
books “Ancora imparo,” which means “I am still learning.” The art
of the trade is contained in those two words. Make them yours, and
you, too, will be able to transform trading technique into art.
C
ONCLUSION
• T
HE
A
RT OF THE
T
RADE
167
From the Library of Daniel Johnson

---

ptg
This page intentionally left blank 
From the Library of Daniel Johnson
Downloat at Wow eBook

---

ptg
169
AFTERWORD
On Rome, Fishing, and the
Upside of “Gut”
“Nothing is more difficult, and therefore more
precious, than to be able to decide.”
—Napoléon Bonaparte
From the Library of Daniel Johnson

---

ptg
Rome, more than any other ancient regime, is the model after
which we have built modern civilization. The very idea of a Repub-
lic with elected representatives comes from Rome. Even the name
of one of the houses of the U.S. Congress, the Senate, comes from
Rome. The power and extent of Rome’s influence has never been
surpassed, though some countries—most notably France under
Napoléon and Germany under Hitler—have tried.
At the heart of Rome’s influence and power lies the innovation
in military tactics afforded by its highly disciplined professional
armies, the famed Roman legions. Roman military commanders
were generally efficient and able men who had served with their
troops for many years. The power of Rome was built upon the
strength of these men and their legions.
Warfare, especially against a diverse array of enemies, is filled
with uncertainty. A commander can never predict exactly what his
enemy will do. He cannot predict exactly which of his troops will
come under great pressure and falter, or anticipate every surprise
and ruse the enemy might throw at him.
Yet military commanders need to make decisions under those
circumstances when they cannot be sure what the enemy will do or
exactly which course of action will be best under all potential condi-
tions. They must improvise when surprise tactics ruin their plans.
They must respond when their lines are broken and their men tire.
They must make decisions. 
170
T
RADING FROM
Y
OUR
G
UT
From the Library of Daniel Johnson

---

ptg