Adrian Reid compares climbing Kilimanjaro to trading: just as altitude creates different environmental zones, markets shift and demand different systems. The key is recognizing what conditions you're in, using strategies suited to them, or staying out until they fit.
Hey, it's Adrian here. This is the halfway through day two. And I'm sitting right around 3,300 meters, or 11,000ft, on the approach to the top of Kilimanjaro. And you can see well above the cloud line and back behind me, you can see the whole of Africa is covered in a bed of white, fluffy clouds, which is just amazing. And something I noticed on the way up today, which was really quite cool, was we came through quite a number of different environmental zones. And as we went up the mountain, we passed through rainforest and then some trees, and then the trees gradually disappeared into scrub. And a thought occurred to me because basically, as you go up the mountain, as you rise in altitude, different types of plants and animals can survive. And the trading analogy that occurred to me was that markets change and different types of systems and different types of traders will survive. And so if you tried to climb the whole mountain of the market with a single system, the analogy being if you were a tree you're trying to grow anywhere on the mountain, it's just not going to work because you're only suited to certain market conditions. It's really important to recognize the conditions that you're in to make sure that you can perform at your best and your systems really work. Climbing a mountain is pretty amazing. You can see all sorts of different environments as you climb up. And we know you see different environments in the market. We need systems and trading approaches for all of those different environments if we're to perform at our best. At the very least, what we need to be able to do is identify the environmental conditions that we're in, the market conditions we're in at that moment, and trade appropriately according to that. That way you can survive and profit in those market conditions and stand aside when the market conditions are inappropriate for your system or your approach. Standing aside, Absolutely nothing wrong with that. You can develop one trading system and trade it when the market is appropriate for that system. But if you develop two, three, four different types of systems for different typ environment, you can survive the whole mountain and profit all the way up. And that's the ultimate goal if you want to be consistent and profitable through all market conditions. Just like climbing the mountain, you're going to go through all the different conditions and you want to be prepared for everything all the way up. That's all for now. See you in the next video.
