In this post, I quote from The Discourses, a collection of lectures by the Stoic philosopher Epictetus, translated by Robin Hard. I use this quote to draw a comparison between committing to a philosophy (Stoicism) and pursuing trading. If that sounds good to you, please read on.
The Book:
Epictetus was a Greek Stoic philosopher who lived in the Roman Empire. He spent the first half of his life as a slave and had a walking disability. After gaining his freedom, he began teaching Stoicism.
The Discourses, translated by Robin Hard, is a collection of his lectures compiled from notes that were taken by one of his students.
The Quote:
Note: In the quote below, you’ll come across the word: pancration. I found that it was a combat sport in the ancient Greek Olympics when looking it up on the internet. You can think of it as MMA, apparently just more brutal. Now, on to the quote.
But to practice philosophy, what does that mean? Isn’t it to prepare oneself to face every eventuality? Don’t you understand, then, that what you’re saying amounts to something like this: ‘If I ever again prepare myself to face every eventuality with equanimity, let things come about as they will’? It is as if someone were to withdraw from from the pancration because he has received some blows! Though in the pancration, it is possible to withdraw from the contest and so escape a beating, but in our case, if we were to abandon philosophy, what good would that do us? What should a philosopher say, then, in the face of each of the hardships of life? ‘It is for this that I’ve been training myself; it is for this that I was practicing.’
Applying Stoic Philosophy to Trading:
If you do your due diligence before you start trading (which you should), you will find that the best course of action is something along the lines of:
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Finding a strategy / trading style that is compatible with your personality and lifestyle.
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Backtesting that strategy thoroughly.
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Implementing the strategy with clear rules (including how you will scale from sim to our ideal risk).
Through your studies and backtesting, you will also learn the realities of the market:
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Losses are a part of the game.
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Winning and losing streaks will happen.
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Sticking to your profit targets is a must.
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Journaling and reviewing your trades are essential.
There is a lot more that you will learn, but the point is this: you will know exactly what to expect and what must be done to be successful. You will accept things as they happen, as they come about.
So, after doing all this preparation, why would you want to abandon or change your strategy after taking a loss or a couple of them? Why would you want to quit trading just because your strategy is not performing, knowing you are taking profits too early and holding onto losers?
Does a boxer quit after being punched in the face, does a basketball player quit after missing a shot? No, because they know it’s a part of the game… it is expected!
Sure, you can quit, but what does that say about you taking on any worthwhile endeavor?
Finally:
If you know what to expect and you have prepared for every eventuality, why cry over a loss or strategy that struggles for a while? In trading anything can happen so train yourself to be ready.
Thanks so much for reading. I wish you all the best with your trading.
Thanks and Regards,
Trading SOS SOS
