"Speculation, Now" Glossary

2015 Glossary contribution from the VLC's new book Speculation, Now. For more information and orders, click here.
Trading Markets
Byron Tucker

A trading market is a price discovery vehicle involving transference of risk or anticipation of profits in an environment with uncertain outcomes. Modern organized markets show a constant flow of opinions on value that are expressed in price and volume. Graphically they are presented as bar charts reflecting high, low, and last trade with volume shown as a histogram. Such markets are ideal speculative vehicles due to their liquidity, broad price dissemination, and ease of access.

Virtually every trader looks at these visual charts and interprets them personally. They are simple lines on a page onto which we project meaning. Working backwards, the graphs transfer our projections onto the thing itself – the stock or bond or future or currency pair we buy or sell. This imputation of meaning and outcome can of course also be done without any chart, but the directness of projection, unadulterated in its purity, is more clearly expressed when we see lines that lead to actions.

As mechanisms for the creation of meaning, these projections are contingent upon the experience and desires we bring to the process of producing them. Thus, our own, very personal lens determines what we see, and it accounts for the fact that different individuals using the same data draw different conclusions regarding the potential outcome of a trade.

Outcomes, too, elicit individual responses – satisfaction or upset, happiness or anger, et cetera, depending on whether the trade is a profit or a loss. Because we continually interpret the world instead of experiencing it directly, we are always confined by what we bring to it with the emotions being the functional parameters of our encounters with the event of market engagement or of encounters with life.

We experience the market as we experience ourselves, in a process of self-mirroring: what we encounter in the market and in the world is ourselves, as the experience of looking and projecting onto markets is akin to how we see, act on, and react to the world at large. A supreme challenge for a speculator is to break this self-referential cycle and discover profound freedom on the other side.

We ignorantly believe what we see and experience exists independently of us. If we invalidate the false object of our belief, we can come to a true and unobscured vision of our experience. In trading markets this means clear-headed decisions in the context of volatility and risk, free of the contingency of our own self-defeating, self-imposed limitations. Speculation then becomes a statistical process of applying skill and knowledge, and turning an emotional gambit into a probabilistic engagement producing profits greater than losses.

Copyright 2015 Vera List Center

This glossary entry is from the publication Speculation, Now, published by Duke University Press in association with the Vera List Center. Edited by Vyjayanthi Venuturupalli Rao, with Prem Krishnamurthy and Carin Kuoni. 60 color illustrations, paper.

Available in bookstores, at online retailers, and directly through Duke University Press at www.dukeupress.edu $29.95

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