In a world where financial markets move at lightning speed and emotional discipline separates winners from the rest, few traders embody the fusion of strategy, psychology, and self-mastery like Simon Ree. With over three decades of experience—including leadership roles at Goldman Sachs and Citibank—Ree has distilled his wisdom into a powerful philosophy captured in his bestselling book, The Tao of Trading. Drawing inspiration from Bruce Lee’s The Tao of Jeet Kune Do, this interview explores the deep parallels between martial arts and market mastery, the myth of passive investing, and the mental tools that unlock consistent trading success.
The Martial Mindset: Emotional Neutrality in Trading
At the heart of Simon Ree’s approach lies a principle borrowed from martial arts: emotional neutrality under pressure. Just as a novice fighter may react with fear or anger during sparring, new traders often panic when markets turn against them. These emotional reactions lead to impulsive decisions—selling low, chasing losses, or abandoning strategies mid-crisis.
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“Emotional reactions are nearly always suboptimal,” Ree explains. “In trading, just like in combat, your thinking brain must stay in control—not your emotional brain.” Through disciplined practice in Jeet Kune Do and mindfulness techniques, he’s cultivated the ability to observe stress without reacting to it. This state of awareness allows for clearer decision-making when volatility spikes.
Debunking Wall Street Myths: Why 10% Is Not the Ceiling
One of the most pervasive myths in finance is that an annual return of around 10%—roughly matching the long-term average of the S&P 500—is “great” for investors. But as Ree points out, achieving that return requires no skill, only endurance through bear markets and crashes.
“The problem,” he says, “is that most people don’t actually endure. They sell at the bottom out of fear and miss the recovery.”
Professional traders, by contrast, selectively expose themselves to risk. They don’t hold blindly through downturns; they identify high-probability opportunities using trend-following strategies. “Saying ‘you can’t time the market’ is like saying ‘you can’t fly a Boeing 787,’” Ree argues. “It’s only impossible if you haven’t learned how.”
Trend following allows traders to ride momentum—buying assets in uptrends and exiting or shorting those in downtrends. This method aligns with human behavioral patterns: people project past trends into the future, making persistence in price movement statistically likely.
Mastering the Inner Game: Breathwork, Meditation & EFT
Even with a solid trading edge, success hinges on execution—and that depends on mental state. In The Tao of Trading, Ree emphasizes three powerful tools:
- Breathwork: Delivers immediate calm by lowering blood pressure and reducing fight-or-flight responses.
- Meditation: Builds long-term emotional awareness, helping traders recognize stress before it triggers poor decisions.
- EFT (Emotional Freedom Techniques): Combines breathwork’s immediacy with meditation’s cumulative benefits through acupressure tapping.
“Meditation doesn’t give instant results,” Ree admits, “but over time, you become far more aware of your inner state—so you respond appropriately instead of reacting emotionally.”
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These practices help traders access what Ree calls “the best version of you”—calm, focused, and fully present.
Why Trend Following Comes First
New traders often chase the thrill of picking market tops and bottoms. But Ree warns this is a low-probability game driven by ego. “It feels clever,” he says. “But if consistent profits are your goal, avoid it.”
Instead, he advocates learning trend following first. Like sailing with the wind at your back, it follows the path of least resistance. Markets trend more often than they reverse, thanks to human psychology reinforcing existing directions.
“A stock rising is more likely to keep rising than a falling one,” Ree notes. “Trend followers stack the odds in their favor by joining momentum early and riding it.”
Inspirations: Jesse Livermore & Paul Tudor Jones
Ree cites two legendary figures who shaped his philosophy:
- Jesse Livermore, whose insights in Reminiscences of a Stock Operator reveal timeless truths about crowd psychology and market cycles.
- Paul Tudor Jones, whose macro-trend strategies and disciplined risk management continue to influence modern trading.
Both masters understood that markets are reflections of human emotion—fear, greed, hope—and that recognizing these patterns is key to staying ahead.
The Power of the 21 EMA
Among technical indicators, few are as central to Ree’s strategy as the 21-period Exponential Moving Average (EMA). He calls it his go-to tool if limited to just one.
Why? Because prices tend to mean-revert—a concept John C. Bogle called “the iron rule of financial markets.” The 21 EMA acts as a dynamic benchmark for a stock’s average value over a trading month.
“When price strays too far from the 21 EMA,” Ree explains, “expect a pullback. It helps identify both trend direction and overextension.”
This simple yet powerful signal guides entries, exits, and risk assessment across volatile markets.
Why Equity Options? Flexibility Meets Asymmetric Payoff
Though Ree started in futures, he found his niche in equity options—a hybrid instrument combining company fundamentals with derivative leverage.
“Options offer asymmetric payoff: unlimited upside with limited downside,” he says. “No other asset class gives you that.”
They also allow profitability in rising and falling markets through calls and puts. With proper education, options become a versatile toolkit for income generation, hedging, and speculation.
Frequently Asked Questions
Q: Can anyone become a consistently profitable trader?
A: Yes—but only with discipline, a proven strategy, and emotional control. Most fail due to poor psychology, not lack of knowledge.
Q: Is trend following suitable for beginners?
A: Absolutely. It’s one of the most reliable methods for new traders because it aligns with natural market behavior and reduces guesswork.
Q: How important is meditation for trading success?
A: Critical. Regular practice enhances focus, reduces impulsivity, and improves decision-making under pressure.
Q: What’s the biggest mistake retail traders make?
A: Holding positions too long out of hope or pride. Successful traders cut losses quickly and let winners run.
Q: Are technical indicators like the 21 EMA still relevant in algorithmic markets?
A: Yes—because algorithms often follow similar rules based on moving averages and momentum signals used by humans.
Q: Can options trading be safe for beginners?
A: Only if approached with education and risk management. Start small, use defined-risk strategies (like spreads), and avoid naked positions.
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Final Thoughts
Simon Ree’s journey—from futures broker to global trading mentor—reflects a deep integration of skill, mindset, and purpose. His work reminds us that true trading mastery isn’t just about charts or indicators; it’s about cultivating inner resilience, leveraging proven strategies like trend following, and embracing instruments like options that offer strategic flexibility.
Whether you're drawn to the calm of breathwork or the precision of the 21 EMA, Ree’s message is clear: consistency beats heroics. And in the long game of wealth creation, emotional mastery is the ultimate edge.
Keywords: trend following trading, emotional neutrality in trading, 21 EMA strategy, equity options trading, trading psychology techniques, consistent trading profits, market timing myth