Tao Te Ching (Chapter 16)
Empty yourself of everything.
Let the mind become still.
The ten thousand things rise and fall while the Self watches their return.
They grow and flourish and then return to the source.
Returning to the source is stillness, which is the way of nature.
The way of nature is unchanging.
Knowing constancy is insight.
Not knowing constancy leads to disaster.
Knowing constancy, the mind is open.
With an open mind, you will be openhearted.
Being openhearted, you will act royally.
Being royal, you will attain the divine.
Being divine, you will be at one with the Tao.
Being at one with the Tao is eternal.
And though the body dies, the Tao will never pass away.
(By Lao Tsu, translated by Gia-Fu Feng and Jane English)
The line “empty yourself of everything” means to empty yourself of preconceptions. Market preconceptions lead to unwarranted assumptions which can lead to losses. The line “the ten thousand things rise and fall while the Self watches their return” could be applied to market movement. Markets “rise and fall,” expand and contract, and inhale and exhale. A market’s “return to the source” could be viewed on a daily bar level as a multi-bar narrow range consolidation or using a single daily bar, as a coiled spring. The market appears to rest at these places.
A Still Mind
As a market comes to rest allow your mind to come to rest. “Let the mind become still.” When your mind is still, it is able to sense minute changes in market direction. Markets and nature move in rhythms as well as seasons. “The way of nature is unchanging.” The rhythmic and seasonal movement of nature and markets is unchanging.
The only certainty is uncertainty. A mind without preconceptions knows this to be true. A still mind knows this to be true. So embrace the uncertainty with a still and open mind. “With an open mind, you will be openhearted. Being openhearted. . . you will be at one with the Tao.”