[catgory Commentary,Worm’s Eye View]

I have talked with many individuals over the years that seemed to think that all of the subject words – Data – Information – Knowledge – Intelligence – Wisdom – mean pretty much the same thing. Basically, they seem to presume that if they have one they have the other four as well.

The worm begs to differ! The worm says that all five have their own – and very different -meanings. Each, however, is an individual step in a sequential process.

Relax, we are not going to wax philosophically over small nuances – and we are going to tie it all into trading.

First the process:

Data must be classified and sorted – then it becomes information.

Information must be transmitted and interpreted – then it becomes knowledge.

Knowledge relates the information to the circumstances – hence intelligence.

Intelligence applied appropriately to the situation results in wisdom.

So how does all this relate to trading?

First there is the real time market data feed – software puts the data into a price chart and we have information.

The price chart presents us with a view of price patterns. We now have information about price action over time – knowledge we can use to create a trade.

We know from past experience that specific patterns have a probability of leading to particular future actions – we are now in a position to enter a trade intelligently.

When we have learned to perform all the previous steps successfully and routinely, we have the wisdom to trade.

The fastest way to get from data to trading wisdom is to start with a good trading method and mold it to your own personal trading demeanor.

In all of our years of trading and analysis we have never found a better or more fun way to trade than TBL.

You can learn all about the TBL way of trading by getting our eBook, See the Music of the Market. It is available at a big discount at www.tradingbetweenthelines.com.


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See the Music of the Market

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