Have you gone through the trading cycle of trying and failing? If so, you know that a trader is never ruined by a lack of funds. You can always earn money from other sources to fund an empty trading account.
Destructive emotions are what truly ruin a trader. If you feel frustrated with yourself, you can never trade well. If you are angry at the market, you will not follow its flow. To trade successfully, you need to discard these negative feelings.
This is where the Stoics come in. This Hellenistic philosophy treats destructive emotions as its nemesis. Together with its logical approach, Stoics say things that make great sense for traders.
Here are 10 Stoic quotes that will help you trade better.
#1: Mind over Market
You have power over your mind – not outside events. Realize this, and you will find strength.
– Marcus Aurelius
As a trader, you cannot be a control freak. A key aspect of learning how to trade is to recognize the parts you cannot control.
The best example is the market. You cannot control the market. You cannot control if your broker screws up. If you think deeply, you cannot even control how much you lose in most cases. This is because most stop-loss orders are not guaranteed.
Hence, as a trader, you can only control your mind. Realizing this is a big step forward. This is why you hear the common claim that trading is 90% psychology and 10% strategy.
#2: Pain of Trading Losses
If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment.
– Marcus Aurelius
Feeling distressed because of a losing position or consecutive losses? Remember this quote.
The losses are affecting you as much as you allow them to.
Revoke the pain, now.
#3: The Future Market
Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present.
– Marcus Aurelius
Traders worry constantly about the next price tick. This anxiety is prominent when you are in a trading position, or overly eager to trade.
The minds of anxious traders are filled with “what-ifs”.
What if the market goes up? What if it goes down? Should I exit now? Should I target further?
These hypothetical questions will mess up your trading perspective.
You don’t need to worry about the future. You will simply interpret every incoming price tick with the same trading tools. Stay confident with your trading skills. Stop thinking about the future, and focus on the present market.
#4: Uncertainty in Markets
How ridiculous and how strange to be surprised at anything which happens in life.
– Marcus Aurelius
Anything can happen in the market.
The largest trading blow-ups are always related to the words “…will never happen”.
The most notable example is Long-Term Capital Management’s (LTCM) collapse. This hedge fund excels in convergence trades, which assume price convergence of two assets over time.
The fund had a sound strategy, as long as major market disruptions do not occur. It used huge leverage. It assumed that market disruptions that will affect the convergence relationship will never happen. Well, they did happen.
A more recent case involves Marko Dimitrijevic, a hedge fund manager. He thought that the Swiss National Bank will never let the Franc float freely against the Euro.
In a nutshell, anything can happen. Welcome to the markets.
#5: Opinion-less
You always own the option of having no opinion. There is never any need to get worked up or to trouble your soul about things you can’t control. These things are not asking to be judged by you. Leave them alone.
– Marcus Aurelius
If you think that a trader must always hold an opinion about the market, you are wrong. It’s okay to say that you have no opinion.
In fact, having no opinion frees your mind to consider all opportunities. A less opinionated trader is one that will cut losses without hesitation.
When you find yourself trying too hard to defend your opinion, take a step back. Remember that you cannot control the market. Hence, there is no reason to get worked up over your opinion of the market.
#6: Withdraw from the Market
It is in your power to withdraw yourself whenever you desire. Perfect tranquility within consists in the good ordering of the mind, the realm of your own.
– Marcus Aurelius
Traders think that they have to trade. After all, if they don’t trade, they are not traders.
Wrong, wrong, wrong.
One of the most powerful weapon of a trader is the ability to stop trading.
To improve your trading, withdraw from the market under the following circumstances.
- You are mentally fatigued.
- You cannot find an edge in the current market.
- Your trading connection is unreliable. (For e.g. when travelling in less developed areas)
Withdrawing yourself from the market is not just an option. It is a powerful one that distinguishes the best traders.
#7: Know Your Game
If a man knows not to which port he sails, no wind is favorable.
– Seneca
A trader does not take random trades. A trader looks for specific market conditions that he is able to take advantage of.
Do you know what you are looking for?
You cannot surf the market waves if you don’t.
#8: Luck in Trading
Luck is what happens when preparation meets opportunity.
– Seneca
Ever thought of why your trading buddy is always luckier than you? Perhaps he is just more prepared than you.
Gamblers depend on pure luck. Traders prepare for an opportunity.
#9: Time Off the Market
Only time can heal what reason cannot.
– Seneca
“Order Rejected. Margin Exhausted”
You realize that your trading account is ruined. You cannot trade anymore. You recall your unimaginable lack of discipline. You had no idea why you took that many rogue trades. A humbling experience.
You keep searching for a reason to explain this disastrous outcome. You think that it will help you regain confidence.
You should find the reasons so that you won’t ruin your account again. However, reason alone might not help you regain your confidence as a trader.
In that case, taking time off the market is the best course of action. Rest and recover. Then, return to the market with the right mindset.
#10: Better, Not More
It is quality rather than quantity that matters.
– Seneca
Cut the link between the number of trades and your trading profits. Ignore the link between the time you spend trading and your trading results.
Your trade quality is what matters. This is the point I was trying to make in these two articles.
- How To Increase Your Trading Profits by 3729% And Cut Commissions by 80%
- Take Only The Best Day Trading Setups
Inspired? There’s more you can learn from the Stoics.
Start with these books.
Very good text
Glad you like it!