New to Taoism?

"The market is a river. You can’t control its flow—but you can learn to navigate its currents with grace."

Ever feel like you’re fighting the markets? Chasing trades, stressing over losses, or second-guessing your decisions? What if I told you an ancient philosophy—one that’s guided warriors, artists, and leaders for 3,000 years—could help you trade with less effort and more clarity? Most traders chase success with brute force: more indicators, more analysis, more stress. But what if the key to profitability isn’t more effort, but better alignment with the market’s natural rhythms?

With The Tao of Forex you will learn how Taoism and the I Ching can transform your trading mindset. No mysticism, no jargon—just practical tools to help you flow with the markets like a pro. Taoism and the I Ching—two 3,000-year-old systems of wisdom that teach balance, adaptability, and effortless action. Here’s how to apply them to trading (no mysticism required).

Taoism—The Trader’s Secret Weapon

First, what even is Taoism? Imagine a philosophy that teaches you to:  

1. Act without forcing (like catching the perfect wave instead of thrashing against the current).  

2. Balance risk and patience (Yin and Yang—more on that here).  

3. Simplify your strategy (because overcomplication kills profits).  

Sound useful? That’s Taoism in a nutshell.

Taoism’s Core Principles

Wu Wei (Effortless Action): "Act without forcing."  

  → Trading Application: Stop chasing setups. Let high-probability trades come to you.  

Yin and Yang (Balance): "Risk and reward, patience and action—are you honoring both?"  

  → Trading Application: Balance aggressive entries (Yang) with strict risk management (Yin).

Simplicity: "The Tao is empty, yet infinitely useful."  

  → Trading Application: Trim your strategy. Fewer indicators = clearer signals.

The I Ching—Your Trading Mirror for Emotional Clarity

Now, the I Ching (Book of Changes) might seem mysterious. But think of it as a several-thousand-year-old trading journal. The I Ching isn’t about fortune-telling—it’s about pattern recognition. The I Ching’s 64 hexagrams reflect universal dynamics involved with change. It’s a tool to check your emotions and see the bigger picture. Using the I Ching with our trading is not about predicting prices, it’s about asking: ‘What’s really going on here?’  

For example:
Hexagram 23 ䷖, named ‘Splitting Apart,’ might remind you: ‘The trend is breaking—stop clinging to your bias.’ 

Hexagram 11 ䷊, named ‘Peace,’ could mean: The market’s calm—don’t invent drama.

Hexagram 51 ䷲, named “Shock,’ might advise you that volatility is coming and you should tighten your stops.

Skepticism Busting

Now, some of you might be thinking: ‘This sounds fluffy.’ Which is fair! But ask yourself: Do you want to react calmly when the market moves against you? Do you want to trust your process instead of chasing every signal?
Perhaps you have the objection: ‘This sounds like astrology for traders.’  Here at The Tao of Forex, Taoism and the I Ching are frameworks for self-awareness, not crystal balls. It’s not a religion or a crystal-ball gimmick—it’s a mindset for navigating uncertainty. And isn’t that what trading is?

Practical Steps that can be used to aid your trading

Pre-Market Check: For every instrument that you trade, on whatever timeframe that you conduct your analysis on (although, here at The Tao of Forex, we recommend the 4-hour chart. Here’s why.), convert the last six candlesticks into a hexagram, then refer to the hexagram index here to gain insights and meditations on the pattern you have charted.

Before trading, ask: "Am I aligned with the market, or forcing my will?"  

Simplify Your Charts: The best traders aren’t the ones with the fanciest indicators—they’re the ones who master their minds.

Breathe deeply to reset emotional bias.  

I Ching Journaling: Supplementing your trading journal with a section about I Ching hexagrams would add another facet of insight to your trading style. (More on this coming soon.)

Post-Trade Reflection: After a loss, convert the candlesticks leading up to your exit into a hexagram, refer to its interpretation here, and reflect on its meaning.

Review losses with the I Ching: ‘What can I learn?’ instead of ‘Why did I get screwed?’

You don’t need to "believe" in Taoism—just test its principles like any strategy.  You don’t need to meditate on a mountain (unless you want to!).