Monday, July 1, 2013

Notes of a Warrior - 3

For every trader, the markets are his battlefield, and he is the warrior. He must remember the five golden rules of combat, set down by Chuan Tzu, three thousand years ago:

  1. Faith: Before going into battle, you must believe in the reasons for the fight.
  2. Companions: Choose your allies and learn to fight in company, for no one ever won a war single-handed. (This indicates that a trader cannot win his battle alone with his sheer intuition and mind made beliefs & perceptions. His company may include books, theories, expert views, combined research and so on)
  3. Time: A battle in winter is different from a battle in summer; a good warrior is careful to select the right moment to begin a fight.
  4. Space: One does not fight in the same way in a mountain pass as one would on a plain. Think about your surroundings and how best to move around in them.
  5. Strategy: The best warrior is the one who plans his fight.

1 comment:

Rajesh Alawadhi said...

Dear Sir,
Whether trading or fighting a war,the principles of war written by Chuan Tzu are equally applicable.The common aspects of war and trading are the need to survive to fight another day.The first principle of war described by him is 'Selection and maintenance of Aim'. Please note the emphasis put by him on maintaining the aim.
Traders need not only make an aim but also learn to maintain it.We cant just rely on others to spoon feed us by hot tips.A trader needs to have her aim right and should have a sets of objectives to achieve that Aim,the first one being to preserve her capital.Every time a trade is taken and followed up,it should sequentially fulfill the criterion laid down by those objectives. The only question to be asked is whether this action of mine taking me to my Aim? If the answer is no then punch a market order and get out.Lets live another day and fight again.