11. The Game

“Trends come and go. Trend followers do too. Some stay longer than others.”

Ed Seykota1

In the book Absolute Returns, Alexander Ineichen stresses that trading is a “game.” He sees no rules for the game except the constant of change, but more importantly, he reminds us that it is crucial to avoid becoming the “game.” There are three types of players in the game:

• Those who know they are in the game.

• Those who don’t know they are in the game.

• Those who don’t know they are in the game and have become the game.2

Larry Hite described his conversation with a friend who couldn’t understand his absolute adherence to a mechanical trading system. His friend asked, “Larry, how can you trade the way you do? Isn’t it boring?” ...

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